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AT&T Collaborates With Harman to Give Shape to Connected Car

Zacks Equity Research
Updated

AT&T Inc. T recently collaborated with Harman International to give shape to the connected car concept on any existing model manufactured after 1996. The strategic deal would help AT&T to fuel business transformation through edge-to-edge capabilities in order to accommodate the evolving consumer needs.

Harman is the U.S. subsidiary of South Korea-based electronics manufacturing firm, Samsung Electronics. It develops connected products and solutions for automakers, consumers and enterprises worldwide. These include connected car systems, audio and visual products, enterprise automation solutions, and services supporting the Internet of Things (IoT).  

Together with AT&T, Harman has launched Harman Spark, an OBD-II (on-board diagnostics) dongle that adds diagnostics, tracking and LTE data to cars. This device for in-car use only will be exclusively available at AT&T retail stores and online for $79.99. AT&T will offer this service without Wi-Fi at a monthly charge of $5, while plans for Wi-Fi would be made available either on a standalone basis or as supplement to eligible Unlimited and Mobile Share plans.

In addition to a radical transformation of any car into a connected IoT device, Harman Spark offers a rich set of features for a convenient life. It conveys constant surveillance on the car through 'WatchIt' function and alerts the user through the app whenever the car is moved, towed or even bumped.

The app also acts as a virtual mechanic, keeping the user informed about maintenance schedule or any other repairs. Harman Spark further offers automatic roadside assistance in the event of a breakdown, while its Crash Assistance calls the user in an accident. It is particularly helpful for parents and aids in creating geofences that warn when the car leaves a certain area, and provide driving scores to teens who are a little too enthusiastic with the pedals.

With such state-of-the-art connectivity and ease of use, AT&T aims to bring a whole new riding experience. Over the past five years, AT&T has invested around $145 billion in wireless and wireline networks, including capital investments and acquisition of wireless spectrum and operations. Currently, the company’s wireless network covers more than 99% of Americans. Its fiber network is one of the nation’s largest and connects more IoT devices compared to any other provider in North America.

In the past year, shares of AT&T have lost 13.3% compared with 3.3% decline for the industry. It remains to be seen whether the national carrier’s service expansion strategy can help it improve profitability in the course of time.


 

AT&T currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the industry are United States Cellular Corporation USM, Telenav, Inc. TNAV and Verizon Communications Inc. VZ. While United States Cellular sports a Zacks Rank #1 (Strong Buy), Telenav and Verizon carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

United States Cellular has long-term earnings growth expectation of 1%. It surpassed earnings estimates thrice in the trailing four quarters, with an average positive surprise of 303.6%.

Telenav surpassed earnings estimates in each of the trailing four quarters, with an average positive surprise of 3.7%.

Verizon has a long-term earnings growth expectation of 5.9%. It delivered an average positive earnings surprise of 2.1% in the trailing four quarters.

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Verizon Communications Inc. (VZ) : Free Stock Analysis Report
 
AT&T Inc. (T) : Free Stock Analysis Report
 
Telenav, Inc. (TNAV) : Free Stock Analysis Report
 
United States Cellular Corporation (USM) : Free Stock Analysis Report
 
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