An interesting piece of news emerged in February about a partnership between AT&T (NYSE: T) and General Motors (NYSE: GM). The companies announced that they’re working together to incorporate wireless service into GM’s cars. Accordingly, the first set of cars that possess wireless service should be on sale in 2014. Notably, the following brands used in the U.S. and Canada should possess this new feature: Chevrolet, Buick, GMC and Cadillac. According to AT&T, cutting edge 4G LTE technologies are to be employed in GM auto products. Before this deal was announced, AT&T had completed deals with Nissan Motor Co. Ltd (PINK: NSANY) and Ford Motor Company (NYSE: F) to provide wireless services for their respective auto products.
This is an entirely new market, not only for AT&T, but also for the entire telecommunications world. This is also a potential market for app makers, since mobile connection will be useless without functionalities, which is where apps come into the picture. However, AT&T is obviously in the driving seat of this new market at the moment. AT&T’s spokesperson said that the company views autos as wireless devices, big smartphones on four wheels. That sounds smart. This development would obviously favor AT&T. Note that users of these cars will need a separate mobile internet plan, which means that the benefits are potentially long-term.
Since AT&T is not the only company that would benefit from this new market, I thought it’d be great to point out a number of companies that could benefit from this new market
Netflix (NASDAQ: NFLX)
Netflix is a leading internet television network, with market capitalization of about $10 billion. Here is how it could tap into this new market. 4G LTE offers fast enough Internet speed for users to do just about anything they’d love to do. So with internet access in autos, parents can keep their kids busy watching whatever suits them on the Internet, which is where Netflix comes in.
Peregrine Semiconductor (NASDAQ: PSMI), Audience, Inc. (NASDAQ: ADNC), Oplink Communications, Inc. (NASDAQ: OPLK)
Here is why I included these stocks. In the news item that contains the announcement, it was noted that offering Internet connections opens up services like navigation and remote diagnostic capabilities. This will help car owners get the most out of their autos. It could also be instrumental to insurance companies to track how their customers use their insured autos. It also offers some sort of additional security for cars. Companies in the Semiconductor – Integrated Circuits industry, the industry that these stocks belong to, offer navigation and remote diagnostic capabilities. Therefore, any of these small-cap companies that taps into this potential opening would benefit.