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Telematics

"After horses and carriages, modern automobile was at the heart of extending the notion of personal mobility. It is fitting, therefore, that mobile computing should serve communication and information needs in the automobile. Telematics caters to this need. " - Chander Dhawan, Principal Consultant and Managing Editor of MobileInfo.Com site

Telematics is the term used to convey the notion of hands-free, voice-activated cellular telephones, in-car computing, wireless Internet and location-based services in the car. Technology associated with installing computers in the car and private wireless networks has been around for over a decade. Public safety agencies have been doing that since mid 1980s. The term "Mobile Data Terminals (MDT's)" supported by private wireless networks in 400 MHz and 800 MHz bands was initially coined by Motorola in early 1980's for law enforcement application. Qualcomm introduced fleet management applications called VIS and QTracks in mid 1990s that could collect diagnostic information from trucks and also communicate with drivers on the highways through text messaging. This has remained a relatively expensive and niche application until now. 

However, generalized Internet-based computing and location-based services aimed at consumers are relatively new - about one year old. In its current form, Telematics is the convergence of wireless technology, Global Positioning Systems (GPS), onboard electronics and infotainment services. It's the gateway for a virtually unlimited array of in-vehicle wireless services. Major business drivers for this are vehicle differentiation and vehicle safety.

Why Telematics - The Need?
Market research studies indicate that adults in the US average 2 hours a day in their car and will spend over 500 million hours in-car in 2001.  While drivers have access to broadcast information through radio as well as cellular-telephone connectivity, they do not have access to personalized information and contact with their offices during these hours. With the advent of wireless Internet, telematics industry is looking at ways for make drivers safer, give them personalized content on demandand stay connected. 

Functionality - Now and In-Future
In the short term, automobile industry intends to provide value-add services like gathering maintenance information about the vehicle and offer diagnostic information to drivers, besides providing , weather and traffic information. They are initially tying it to driver's safety requirements - maintenance, airbag deployment and related information but medium term objective is to connect to the Internet and then start providing air reservation, cancellation and rebooking services. 

Location-based content is an obvious add-on to this initial service.  Naturally, automobile manufacturers are interested in getting on the wireless Internet wagon.

However, a more exciting future scenario is where you are driving on the highway en-route to the airport and your car has an engine problem. Completely unknown to you, your on-board computer sends a diagnostic alert to the maintenance center of the car manufacturer. There, a service representative discovers an engine timing problem and has a temporary software fix to the problem. The service representative finds the cellular number of the car from its database, calls the driver, advises him/her of the problem, and gets permission to perform the temporary fix on the fly. After providing partial relief to the driver, the service center suggests that the driver should take the car for permanent checkup at the closest service center. Meanwhile, the driver communicates with the airline through his/her computer, gets re-booked on a later flight.  All this happens though a voice interface to the in-car computer mounted on the dashboard. Technology components for all of these functions exists today (in 2001) - only the infrastructure is not in place - that's what Telematics vendors are trying to do.  

Major Initiatives in the Market

  • GM's On-Star initiative - Toyota, Honda and SAAB have joined the initiative. GM hopes to equip one million cars with basic Telematics capability in 2001. Honda will equip Acura's with OnStar's services.

  • Ford Motor Company & Qualcomm (Wingcast) - Ford will add telematics to more expensive models in 2002. Jaguar (a subsidiary of Ford) will provide in-car voice and data services from Sprint PCS in some models.

  • Some Toyota Lexus and Nissan Infiniti models should see telematics features soon.

  • Delphi Automotive, Ericsson and Palm initiative called Communiport Mobile Productivity Center.  This will combine a cellular phone and PDA to give driving instructions on palm V devices. A microphone and voice-recognition capabilities allow drivers to interact with Palm's calendar, to-do lists, memo pad, and e-mail. Using voice commands, you ill be able to make a hands-free cal from Palm's address boo. Portable Communiport will plug into car's battery system directly.

  • Evertrac Fleet Management System for tracking vehicle diagnostic information.

  • Reynolds and Reynolds has introduced a third-party consumer service to most vehicles manufactured after 1995/96 model year when manufacturers started installing in-board diagnostic embedded computers in cars. For the past five years, only service stations operated by major auto manufacturers and equipped with expensive equipment were able to retrieve this information through proprietary interfaces. Now, it can be retrieved by independent service stations by subscribing to services from Reynolds and Reynolds who supplies hardware, software and support for non-company service facilities.  Reynolds and Reynolds supplies supplies CAReader, an automotive wireless diagnostic appliance from Networkcar Inc., a company in which it has 10% equity stake.

  • ATX and CNN interactive have joined hands to offer a service through Mercedes-Benz's TeleAid program that will provide personalized news, weather, stock, sports information for display on in-car screen. 

Current User Interface& Typical Consumer Services Offered 
Implementations vary from one manufacturer to another. However in its first incarnation, the system's typical interface features a multi-button control pad that is integrated into the instrument panel and is accessible by the driver or front-seat passenger. An integrated microphone and use of the vehicle's stereo speaker system ensures hands-free, non-distracting communication - the driver does not have to take his/her eyes off the road to receive information from the OnStar center - one leading Telematics implementation from GM-led consortium. Future interfaces may see more functional interface.

OnStar - GM's version of Telematics Aims at Safety
From safety perspective, the system will automatically place an emergency call if the airbags (front or side) are deployed in a crash. The call is received as a priority at the OnStar center with the vehicle's location and the phone number of local emergency authorities instantly appearing on the advisor's screen.

If the vehicle is stolen, the owner can initiate remote tracking by calling OnStar and providing the correct security code. OnStar will then contact local authorities and locate the vehicle, guiding the police to the vehicle's location.

From mobile office functionality perspective, On-Star will have a virtual Advisor, which will provide voice-activated Internet access for the retrieval of e-mail through the OnStar.com portal.

Concierge Services Help Make Life a Bit Easier
The OnStar system also provides its customers with a 24-hour connection to concierge services like:

  • Navigation and route guidance - OnStar's location database contains five million listings

  • Personal assistance with services such as booking hotel reservations or airline tickets, ordering flowers or 100 other customized services

  • Roadside assistance

  • Directions to the nearest dealership

  • Vehicle location assistance when parked in a crowded lot by flashing the vehicle's lights and activating the horn.

How in-Car Computing is Implemented?
OnStar utilizes the vehicle's electronics, GPS satellite tracking and the existing wireless network to transmit voice and data to the OnStar call center - which is staffed 24 hours a day by experienced advisors. The vehicle's location can be pinpointed to help emergency authorities reach the vehicle in the event of an accident or provide accurate navigation assistance (without having to study an onboard screen display).

How Much Will it Cost Consumers? 
Prices would vary from one manufacturer to another. However, OnStar pricing for SAAB may provide a rough guideline. OnStar's manufacturer suggested Sale Price in Saab vehicles is $895, which includes three months of the Premium Service Plan. After the initial three months, a basic Safety And Security Plan is $16.95 per month and includes airbag deployment notification, vehicle theft tracking and emergency assistance. The comprehensive Premium Service Plan, which includes all of the basic services in the safety and security plan plus route guidance and all concierge services, is $34.95 per month and provides unlimited calls to the OnStar center.

Rule-of-thumb averages for cost are in the $500-$1000 range for the hardware option and $199 to $399 per year for the service. Many  dealers would discount the first year service costs in the base price of the car itself.

Size of the Market
The auto industry and wireless Internet market forecasters see big dollars in this space. Sales of telematics equipment and services are expected to rise from $735 million in 2000 to $5.3 billion in 2005, according to Strategis group. The company expects 11 million in-car subscribers in 2005. Another market research company, Business Intelligence group, is even more optimistic and expects global telematics market to grow to $8 billion in 2005. GM expects to have sold million units in 2000 and 4 million by 2003. Attractive proposition for auto makers is ongoing revenue by selling Internet-based services. 

Another recent study by Telematics Research Group shows the number of telematics-enabled autos in use will have grown from four per 1000 people to 200 per 1000. By 2006, it expects more than 30 million telematics-enabled vehicles in the world. by 2006, 30% of all new vehicles in USA will include telematics systems.

Auto Manufacturers are in Driver's Seat: Telematics market is well structured, well-organized because major auto manufacturers are driving the initiative. The market is not splintered among several hundred startups like the wireless Internet market is. Auto manufacturers know how to market to consumers and are offering incremental services. 

Issues in Telematics

  • Voice-activated Interface - a must; Since car manufacturers are safety conscious for some time and do not want to face law suits, they are insisting on voice-activated interface.  This is very wise and responsible, we think.

  • Safety-features first, then exotic Internet : Based on consumer surveys and manufacturer's own understanding of consumer preferences, they are emphasizing driver safety features The will come location-based route guidance (directions) and m-commerce services. Then Telematics will become convenience offering, rather than a safety offering.

  • Ownership of the customer - it appears that customer clearly belongs to auto manufacturers. In the mobile commerce space, wireless network carriers, wireless portals and content providers are all fighting for the crown. 

Vendors in Telematics

  • GM's On-Star initiative - See See Major Initiatives earlier.

  • Ford Motor Company & Qualcomm (Wingcast) -  See Major Initiatives earlier

  • Delphi Automotive  - See Major Initiatives earlier

  • Evertrac Fleet Management System - For tracking vehicle diagnostic information.

  • Reynolds and Reynolds Third-party consumer service  - See Major Initiatives earlier

  • Motorola - providing basic hardware components. Nokia and Siemens are doing the same in a minor way. Motorola is also planning to offer iRadio ,a private-labeled information system that will allow weather, traffic, voicemail, e-mail, stock information.

  • Acunia NV - Telematics OTF (Open Telematics Framework) - Oracle has partnered with Acunia.

  • Veritek - Telematics for fleet and rental market

  • Alpine - Traditional After-market auto audio supplier now offers Mobile MayDay (help for emergency) service - kind of Telematics service

  • Clarion - AutoPC as car radio - expensive

  • CNN Interactive

  • InfoSpace - an information portal

  • InfoMove - Content aggregator 

  • Etak - navigational maps

  • NavTech - provides navigational database for directions 

  • Nexiq - Commercioal vehicle diagnostic information collection expertise

  • Lernout &Hauspie's Automatic Speech Recognition software is installed in hands-free auto phones

  • Visteon - Supplies navigation, entertainment, communication, in-car computing and audio hardware to car manufacturers

  • Skynet Telematics, a UK-based company involved in development, marketing and distribution of integrated modular automotive Telematics systems and the provision of monitoring services to users of these products. SKAMP is a branded product that spans GSM, GPS, SMS and a remotely-activated device.

Resources:

  • Telematics Report by ARC Group, click here to download this report (MS Word format).

Features of this report include:

  • Analysis of key players throughout the automotive and freight telematics value chain

  • Evolution of the value chain and markets to 2005

  • Assessment of the impact of 2.5G and 3G enabling technologies on future service provision

  • Detailed forecasts and analysis of market potential for the private vehicle, freight, fleet, public safety/public transport, and logistics telematics segments

  • Valuable insights into player activities, including the crucial role of mergers, start-ups, alliances and joint ventures.

Acknowledgement : Some content of this page based on information in mbizcentral magazine.

 


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