Internet-Connected Cars Dominate Growth in U.S. Wireless Industry

Internet-connected cars and other everyday products have become the fastest-growing part of the U.S. wireless industry, adding more links than mobile phones and tablets combined in the second quarter.

AT&T Inc. dominated revenue in connected devices, with the company connecting cars to its network at twice the pace of tablets, analyst Chetan Sharma said in his quarterly wireless industry report. AT&T should reach 10 million connected car subscriptions soon, he estimated. Verizon Communications Inc. is actively adding connected devices as well.

For carriers, the so-called Internet of Things -- a world in which everything from garage doors to cars to light bulbs connect to the web -- has become a major source of revenue growth at a time when phone-related business has slackened.

Verizon has been a distant second to AT&T in connected cars, but is mounting a big entry in a related area -- connected trucks. Last week, the company agreed to buy Fleetmatics for $2.2 billion, going from No. 2 to eventually No. 1 in the field. According to the company, Verizon has partnerships with Ford Motor Co., General Motors Co., Hino Motors Ltd., Isuzu Motors Ltd., Mack Trucks, and Volvo AB's Class 8 truck unit.

Connected cars can transmit your location to emergency services in case of an accident. They may also be able to wirelessly link to your house to turn on air conditioning or disengage a home security system.

Fewer new phone and tablet subscriptions are being added than in the past, Sharma said. To find growth, Verizon has been expanding into markets such as mobile-content distribution with its recent purchases of AOL Inc. and Yahoo! Inc., while AT&T has been pushing satellite TV with DirecTV and into connected cars.

“IoT is being driven (literally) by connected cars but also the long tail of other devices in medicine, drones, industrial,” Sharma said in an e-mail.