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Automotive Telematics and Multimedia in the United States

Automotive Telematics and Multimedia in the United States.

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Automotive Telematics and Multimedia in the United States

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  1. Automotive Telematics and Multimedia in the United States Electronic toll collection Car navigation Traffic management and route-guidance On-board internet and Internet and e-mail access “Mobile office” Theft-tracking Emergency call On-board collision-warning Interactive vehicle diagnostics Value-added content services Nav Systems Reservations Entertainment Bundled systems Communications Video games DVDs Integrated systems Electronic toll collection Car navigation Traffic management GLOBAL POLICY GROUP

  2. Automotive Telematics and Multimedia in the United States Outline of Presentation • Defining Telematics • Passenger Car Telematics Market Overview • Commercial Vehicle Telematics Market Overview • Recent Developments: Emerging Drivers of Growth in the Passenger Market • Future Trends in Passenger Car Telematics • Future Trends in Commercial Vehicle Telematics

  3. Automotive Telematics and Multimedia in the United States Defining Telematics

  4. Defining Telematics the convergence of wireless communications, location technology, and in-vehicle electronics which is being used to integrate the automobile into the information age telematics

  5. Location Technology Voice-recognition Technology Communications Technology Map Databases Networking and Vehicle Interface Technology Integrated Telematics Systems Navigation Systems Mayday Systems Car PCs Audio/ Video Systems Wireless Phones Interior Systems Telematics Building Blocks:Technologies

  6. Emergency call or mayday services Navigation and route guidance services E-commerce applications Interactive value-added services Remote vehicle access and diagnostics Device-to-device communications Commercial fleet management Interactive on-board entertainment Person-to-person communications Remote vehicle theft tracking Telematics Building Blocks:Applications and Services Services available using telematics devices:

  7. Automotive Telematics and Multimedia in the United States Passenger Car Telematics Market Overview

  8. The U.S. Passenger Car Market:Current Device Options • Autonomous navigation systems • Integrated multimedia systems • On-board personal computers • Rear-seat entertainment systems • Installed wireless phones • Can be integrated with mayday service • Handheld wireless phones and PDAs • Not telematics devices • Could affect telematics demand • Similar technologies/functions, but portable • Wireless integration soon possible

  9. The U.S. Passenger Car Market:Current Service Options • OEM mayday or emergency call services • GM/Saab OnStar, Ford/Lincoln RESCU, Mercedes TeleAid, Jaguar Assist, etc. • Simple interface, connects to human voice • Fee- or subscription-based • Range of services (mayday, concierge, etc.) • Independent information and emergency call services • ATX, Cross Country Group • Similar services, fees, etc., to OEM systems • Often serve as call centers for OEM systems

  10. Dot.coms Communications technology firms Nav system producers Satellite radio firms Automotive audio firms Automotive electronics firms Voice recognition technology firms Location technology firms Automotive networking and interface firms Automotive interior firms Call center firms Mapping software firms The U.S. Passenger Car Market:Key Telematics Suppliers Automotive Telematics

  11. Automotive Telematics and Multimedia in the United States Commercial Vehicle Telematics Market Overview

  12. The U.S. Telematics Market:Telematics Devices for Tractors • On-board integrated telematics systems • On-board computer, GPS, wireless communications, interface with tractor data bus • Driver interface in cab for data and voice communications with dispatcher • Screen for incoming text messages with keyboard or touchscreen for sending messages

  13. The U.S. Telematics Market:Telematics Devices for Trailers • On-board integrated tracking systems with GPS receiver/antenna, wireless communications, and battery/charger • On-board sensor systems to allow monitoring of whether trailer is loaded, doors open, temperature, etc. • Sensor system often integrated with tracking system to send real-time information to the fleet office

  14. The U.S. Telematics Market: Commercial Vehicle Services • Communications • Tractor and trailer location • Routing/dispatch/ETA information • Electronic driver logs • Reporting • Billing/accounting • Electronic customer relations management • Remote tractor/trailer monitoring/diagnostics • Theft monitoring • Driver performance monitoring • Fleet management, cost, productivity assessments

  15. The U.S. Telematics Market:Fleet Service/System Providers • Communications/information service providers • American Mobile, Qualcomm/OmniTRACS, ARINC/Dominium, HighwayMaster, Orbcomm • Communications/information systems providers • Cadec, XATA, Eaton • Internet-based communications/information services • @Road, Qwiktrack • Truck-stop kiosk/hook-up internet-based communications/information services • DriverNet.com, PNV

  16. Automotive Telematics and Multimedia in the United States Recent Developments:Emerging Drivers of Growth in the Passenger Market

  17. Driver #1:Volume • More telematics and multimediadevices as OE options on MY2000 cars and light trucks • Primarily on luxury models and minivans • Some telematics and multimedia devices are standard equipment in MY2000 • Only on luxury models

  18. Driver #1:Volume • More OE telematics services in MY2000 • Particularly emergency-response services • Some (OnStar) expanding beyond luxury models • OnStar available on 29 MY2000 GM models • Rely on simple interface, human contact • More OEMs providing telematics service interface as standard equipment • Revenues derived from service fees or subscription

  19. Driver #1:Volume • Expanding range of products is essential to market’s growth • Increasing consumer awareness of telematics • Availability in rental cars, increased advertising (especially OnStar and Mercedes) • Telematics systems in hands of early acquirers and other trend-setters • High satisfaction and intention to make second purchase among telematics users • Higher volumes reduce prices, encourage innovation and integration

  20. Mapping software firms Computer software firms Nav system producers Automotive electronics firms OEMs Automotive interior firms Voice technology firms Telecom service providers Telematics suppliers Call center providers Communications technology firms OEMs Networking technology firms Telecom equipment providers Location technology firms “Content” providers Driver #2:Proliferating Industry Alliances

  21. Driver #2:Proliferating Industry Alliances • Telematics applications depend on diverse technologies • Beyond scope of one individual company • Beyond scope of automotive OEMs • Beyond scope of traditional automotive suppliers • Beyond scope of telecom, consumer electronics, IT suppliers • Telematics services require diverse types of content, customer relations, etc. • Alliances essential to meeting needs for diverse technologies and skills

  22. Standardizing interfaces to promote “plug-and-play” In-vehicle Telematics Standards TSC AMI-C SAE IDB Forum Standardizing open networks through ITS Data Bus Driver #3:Movement on Standards • Auto and electronics firms cooperate on standards

  23. Driver #4:Benign or Supportive Public Sector • Regulations have helped create market • E-911 regulation provided invaluable boost to GPS location technology • EPA and CARB regulations helped drive OBD-I and OBD-II development • Federal and state governments actively promoting ITS research and deployment • Safety concerns on hold so far, but threaten • Industry adopting some self-regulation • NHTSA focus to date on cell phones • States and localities also concerned

  24. Call center Internet content Internet portal OEM Satellite Radio Service Providers Driver #5:Telematics and E-commerce • Many OEMs view telematics services as part of web that extends customer relationship • Envision wide-ranging revenues from service fees, vehicle maintenance, advertising, etc. • Simple interface as standard equipment • Contrast with device-led growth in Japan

  25. Recent Developments Drive Projections of Growth Subscribers to Telematics Services Source: The Strategis Group

  26. Automotive Telematics and Multimedia in the United States Future Trends in Passenger Car Telematics

  27. Key Features of Next-Generation Telematics Devices • Simple interface • Technological capabilities must be balanced by safety concerns and consumer interests • Voice recognition and text-to-voice • May be key to safety while car is moving • Systems may limit some functions to parked car • “Plug and play” • Consumer will be able to install next-generation telematics and multimedia systems • Overcomes disparity in design and life cycles

  28. Key Features of Next-Generation Telematics Devices • “Node on the internet” • Connect vehicle to internet content • Safety concerns must be addressed • Real-time features • Real-time traffic key to growth in nav systems • Move away from limited coverage of autonomous CD- and DVD-based systems • Integration of functions • Single interface for wide range of applications • Communications (data and voice), navigation, audio, vehicle controls

  29. Next-Generation Telematics:Is Integration the Killer Application? • Everyone hopes for a single “killer app” • Navigation systems key in Japan • Killer application in U.S. could be integration • Integration of interface for voice/data communications, vehicle controls, vehicle diagnostics, location technology, etc. • Integration can ease driver distraction • Integration driving cross-sectoral alliances • Risk: Integrated devices can easily become outdated as technology rapidly changes • Does the answer lie in services, not devices?

  30. Key Features of Next-Generation Telematics Services • Voice/human contact essential • Call centers will not be replaced by internet • Particularly essential to mayday services • Most important to older buyers • Location-based content to increase • Nationwide coverage essential • Real-time traffic, weather, road status • Location-based concierge services and POIs • Location-specific targeted advertising

  31. Leading Areas of Consumer Interest in Telematics Services Source: ATX Technologies

  32. Potential Roadblock #1:Price • OE telematics devices still expensive • Installed nav systems cost $1800-$2000 • Often bundled in luxury packages costing anywhere from $2500 to $7000 • Aftermarket systems also expensive • Device prices must come down • Telematics services usually start at $200/year for basic package • Service prices less an issue – provided interface is standard equipment

  33. Portable Vehicle Portable Bluetooth Cell phones Smart Phones Laptops PDAs Nav Systems IDB Bus Dockable Cell phones Mayday Systems Nav systems Audio/Video Systems AutoPC Driving Technology Installed Potential Roadblock #2:Competition from Portable Devices

  34. Potential Roadblock #3:Privacy • Privacy issues long raised about Internet • Ability of Web sites to track individual preferences without permission raises concerns • Telematics compounds concerns through vehicle tracking, remote monitoring, etc. • Concerns already appear in trucking industry • Consumer concerns slow ITS deployment • Consumer concerns likely to grow • Telematics service revenues depend on location-specific advertising, selling location and purchase information, etc.

  35. Potential Roadblock #4:Infrastructure • Telematics infrastructure poorly developed: • Multiple wireless communication standards • 3G may resolve some of this problem • What about 4G? • Traffic information is inconsistent • Traffic Data Forum aims to address issue • Poorly developed public ITS infrastructure • National ITS Architecture could address interoperability issues • ITS Deployment funding increasing • Unclear support for IVI research

  36. Device-to-Device Connection Standards Communication Standards IrDA 3GPP In-vehicle Telematics Standards Bluetooth WAP TSC AMI-C IDB Forum SAE Safety Standards? Traffic Data Forum ITS Standards Infrastructure Standards Potential Roadblock #5:A Proliferation of Standards

  37. Potential Roadblock #6:Safety • Regulators target cell-phone use in cars • NHTSA recently issued public warning • States and localities consider bans • NHTSA now targeting in-vehicle telematics • NHTSA “forum” and public hearing assess industry efforts, need for federal action • Ongoing driver-distraction studies seek data • In-car internet and e-mail of particular concern • Hands-free does not solve distraction problem • NHTSA open to industry self-regulation • Emergence of groups modeled on MADD?

  38. Automotive Telematics and Multimedia in the United States Future Trends in Commercial Vehicle Telematics

  39. Long-Haul Trucking to Remain Key Telematics Market • Key customers in long-haul trucking sector • Larger for-hire fleets have resources and needs • Evolving technology offers growth opportunities • Sector dominated by proprietary systems and well-entrenched national providers • Qualcomm, HighwayMaster, American Mobile • Developing new products and services to take advantage of new technologies • Trailer-tracking offers new growth area • Demand driven by concerns about theft, lost trailers, efficient fleet-management, etc.

  40. Commercial Vehicle Telematics:Future Trends • Open data bus could offer new opportunities • IDB Forum has held discussions with heavy-truck standards groups • Adoption of IDB architecture could open door to new services and devices • Multimedia, in-cab computer, infotainment • Truck makers could become more active • Portable devices would appeal to fleets that rely on rental units • “Turnkey” solutions would appeal to smaller LTL fleets and short-haul fleets

  41. Commercial Vehicle Telematics:Future Trends • Growth in location-based wireless fleet-management services • Communications, asset tracking, remote diagnostics, theft monitoring, etc. • Integrates electronic fleet-management and CRM functions with the Web • Integration with “virtual” marketplaces • Existing suppliers, communications, and software firms developing new products • Smaller fleets prime market for new internet-based technology and services

  42. Commercial Vehicle Telematics:Privacy and Safety Pose Threats • Privacy issue is a major potential roadblock • Fleets use data for performance reviews, incentive programs, etc. • Truckers angered by close monitoring of performance, driving techniques, etc. • Drivers and unions oppose tracking of trucks • Fears of “big brother” • DOT mandate of electronic recorders sparks backlash • NHTSA and FMCSA concerned about safety of trucking telematics systems

  43. Commercial Vehicle Telematics:A More Mature Market • Unlike passenger market, trucking sector has existing telematics infrastructure • Long-haul market dominated by Qualcomm, etc. • Heavy investment to date make it hard for fleets to move to more open systems • Truck makers play little role to date • Smaller fleets offer best target • Internet-based services appealing due to low start-up costs • Truck-stop services target individual truckers • Fast-growing short-haul sector also key

  44. Automotive Telematics and Multimedia in the United States Summing Up

  45. Summing Up:Keys to the U.S. Telematics Market • Development of integrated devices with simple interfaces that address safety concerns – at an affordable price • Need to provide more than portable devices • Standardization is key to meeting goals and offering latest technology in the car • Simplicity and safety essential in vehicles, even at expense of “gee-whiz” technology • Industry must impose limits – or regulators will • Risk of public backlash if safety not addressed

  46. Summing Up:Keys to the U.S. Telematics Market • Development of targeted services delivered safely with low-priced (or free) interface • Need to compete with other similar services • Potential competition from telcos, etc. • Consumers do not want multiple internet accounts, e-mail addresses, phone accounts/numbers • OEM-Internet alliances may be answer • Privacy could become increasingly important • Key question: Why should the consumer pay an automaker for these services?

  47. Automotive OEMs and Telematics:Competing in an Open Market • OEM service-focused strategy endangered by open access, portable devices • Europeans see handheld devices as key • Safety/roadside aid services clearly appeal • Voice contact essential in U.S. market • Key test: Renewal rate for OnStar • Costs of delivering such services will escalate as subscriber base grows • OEMs must get consumers to buy broader range of services from them

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