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ed carE X E C U T I V E

S U M M A R Y

Expanding Online Access – on the Road
LTE Connected Car appeals to younger United States consumers
Along with always-on connection to the Internet, the LTE Connected Car service offers an array of entertainment, traffic, navigation, car maintenance and safety features.

Introduction
In August 2009, Alcatel-Lucent Market Advantage conductedend-user research in the United States to assess demand for the LTE Connected Car service. The LTE Connected Car is a solution concept of the ng Connect Program. Our study focused on the following key objectives: • Determine the appeal of the LTE Connected Car concept • Evaluate interest in individual applications • Measure consumers’ willingness to pay

Among premium features, consumers are mostwilling to pay for Augmented GPS and Maintenance Tracking.

Key research findings
The LTE Connected Car has the highest appeal for consumers under 35 years of age, and navigation is the most desirable feature overall. When considering these exciting new features, consumers across all segments show the greatest willingness to pay for the Augmented GPS and Maintenance Tracking applications. Theirleading concerns include privacy issues and systemic failure.
Figure 1. The under-35 age group shows the strongest interest in LTE Connected Car

How appealing is the concept of the LTE Connected Car?
5 - Very appealing (580) 4 (583) 3 (603) 2 (224) 1 - Not at all appealing (168)

27% 27%

28%

31%

32% 28% 27% 27% 27% 22% 22% 15% 12% 13% 28%

10% 8% 5% 4% 7%

Total

Under 35

35to 50

51 and Above

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Expanding Online Access – on the Road | Executive Summary

LTE CONNECTED CAR CONCEPT
This service package provides always-on access to the Internet, along with entertainment and real-time navigation systems. Standard features include: • Access to social and communication information, as well as streamed radio, TV and video content • Live updated information abouttraffic and locations of interest • Accident and emergency assistance, along with stolen vehicle recovery systems Enhanced features include: • • • • • • • • • Screens in front and rear of the vehicle Wi-Fi access for portable devices Device integration for mobile phones, media players, gaming and computers Live map data Video and audio services, such as on-demand movies and access to TV andInternet video Location-based services, including Google Maps Communication and messaging service access Remote vehicle diagnostics, maintenance tracking and notifications systems Natural language voice interaction for safety

Willingness to pay The average amount respondents would pay for the complete LTE Connected Car service is shown in Figure 2, broken out by consumer age and preferred paymentoption. The majority prefer to pay a monthly stand-alone fee, while close to 30 percent would rather bundle the payment with their existing mobile subscription.

Figure 2. How much consumers would spend on the LTE Connected Car package

LTE Connected Car monthly stand-alone fee
$69.93 $65.54 $69.40 $55.12

Total

Under 35 Mean

35 to 50

51 and above

(Base: 885. Median: $29.)

Add onto monthly mobile subscription
$30.99 $24.92

Add on to monthly bundled subscription
$37.95 $38.14 $31.50 $44.94

$29.11

$30.37

Total

Under 35 Mean

35 to 50

51 and above

Total

Under 35 Mean

35 to 50

51 and above

(Base: 445. Median: $20.)

(Base: 258. Median: $25.)

Expanding Online Access – on the Road | Executive Summary

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Leading applications AmongLTE Connected Car features, consumers are most willing to pay for Augmented GPS. Figure 3 shows the optimal monthly price point for consumers’ five favorite applications.
Figure 3. Top five applications in order of willingness to pay
LTE CONNECTED CAR APPLICATION OPTIMAL MONTHLY PRICE POINT

1. Augmented GPS 2. Maintenance, Tracking and Notification 3. Advanced Voice Features 4. On-Line...