What does it say when a company traditionally ensconced in audio and data services makes a play to acquire full-fledge connected car services? Not just that in-vehicle infotainment remains serious business, but that we could be seeing the foundation of perhaps a more connected lifestyle ahead.

This week’s announcement from Sirius XM that it has entered into a definitive agreement to acquire the connected vehicle services business of Agero, Inc., for $530 million in cash, might seem like just another round in the acquisition merry-go-round, but I think it opens the door to examining how cars will connect to more parts of our lives in the years ahead.

On the surface, I call it a no-brainer for Sirius XM to make this strategic move into in-vehicle services. It already has a rather firmly established footprint into vehicles from every major carmaker, with the company saying its audio entertainment and data services are currently available in more than 50 million vehicles. 

No doubt the purchase of connected-vehicle services of Agero, which includes safety, security, and convenience services, extends that Sirius XM footprint to such brands as Acura, BMW, Honda, Hyundai, Infiniti, Lexus, Nissan, and Toyota (Agero says it works with 70% of top automakers in the United States). But one interesting aspect that jumped out at me was the fact Agero also works with nearly all the top automotive insurance carriers in the United States. This opens the door for some pretty interesting services, perhaps related to UBI (usage-based insurance) or driver-safety programs.

Another interesting little nuance that could still be under wraps is how Sirius XM may have some bigger plans for the home. Agero seems to already be thinking that the car is the center point of our daily lives, and this interesting video from the company depicts a scenario in which data flows seamlessly through all aspects of our lives, from home to car to even retail via POS (point-of-sale) transactions. Check it out. To that point, Sirius XM is most commonly associated with the car, but offers products for the home and even on-the-go, so maybe this idea isn’t too far off base.

The analysts are buzzing about the deal. In a report from Strategy Analytics, analyst Roger Lanctot raises the point about a challenge he sees for Sirius XM to leverage its content and customer relationship assets to build a new LTE-based value proposition capable of transitioning to a global platform.
In a statement, Jim Meyer, CEO of Sirius XM, states the transaction accelerates his company’s development in architecture supporting connected vehicle services, as well as the ability to provide services over both satellite and cellular networks.

Both statements address network considerations and opportunities related to the deal. While this is strictly a telematics deal on the surface, there is no telling what could come in the future. I like when companies have bigger visions for this connected world, and this deal certainly caught my attention in that regard.

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