While some analysts have predicted a dismal start to 2008 for many market sectors, the vehicle telematics industry has entered the New Year with renewed vigor. According to Steve Millstein, president and CEO of ATX Group, an independent telematics service provider to the automotive industry, telematics services are expanding into China, multiple telematics providers are serving the same vehicle with different applications and vehicle owners are choosing telematics for the experience it brings to the daily drive — rather than as a simple precaution against potential emergencies. "Telematics has finally become legitimatized in the marketplace," says Millstein in his annual State of the Telematics Industry address, which is now available on the ATX Web site. ATX is an industry pioneer, having launched the first consumer vehicle telematics program in 1996 with Ford Motor Company and Motorola. After several years of trepidation by automobile manufacturers to invest in an area with promising but unsubstantiated returns, an uncertain regulatory landscape and little consumer awareness of benefits, telematics is again growing — in terms of OEMs, vehicle owners, geographic regions, competitors, differing business models and the types of devices connected to services. Now, the state of the telematics industry has never been better, Millstein says, with virtually every automobile manufacturer in North America beginning to deploy programs, including some planning programs that are global in scope. A number of new options for connecting to telematics, such as personal navigation devices, are developing. The result is the emergence of "T3" telematics — the industry's third generation — which will become a radical departure from the traditional subscriber-based, event-driven response services. Among the key industry trends Millstein foresees in 2008:
"The degree of interest throughout the automotive industry since our announcement last summer on entering the Chinese market has been absolutely remarkable. Companies are rushing to be among the first to bring telematics to China," Millstein says. "You will see telematics on cars in China within the next year. And that, in turn, is ratcheting up serious interest in similar deployments in the Indian and Latin American markets, thereby forcing automakers to formulate a global telematics strategy." Millstein said that the global platform emerging will require flexibility in terms of applications but at this early stage it appears both vehicle theft recovery and automatic collision notification will be the initial, universal applications. "The buildout of telematics in North America, coupled with the expansion throughout Asia, will force a serious a re-examination of the current situation in Europe, where telematics deployment has been stalled for more than a half decade,"he adds. "There's a new global paradigm. European governments and the automotive and telematics industries must band together to leverage this opportunity to accelerate deployment of the basic safety applications of first- generation telematics."
ATX recently participated in the validation of BMW's new, flexible in-vehicle protocol platform that opens their vehicles to multiple sources of telematics applications. "We support this approach because this allows BMW the flexibility to tap the best-of-class specialties offered by the entire field of telematics service providers, while ensuring that legacy vehicles will always be able to access new services without having to replace any in-vehicle components," Millstein says. He also sees such flexibility critical in achieving cross-border connectivity as part of a global telematics platform.
Consumers' expectations will demand that their vehicles be able to connect seamlessly with the smart phones, digital music players and other devices they bring along for the ride, according to Millstein. "Your car's a node on the network. Telematics providers deliver the optimal connection for the multi-modal car. This ranges from determining least-cost-routing for the signal itself to helping all the devices in a vehicle to work together," he says. "In telematics' future, the application will determine which way is best. Drivers are interested in getting things done using familiar commands and interfaces."
As telematics increasingly becomes the gateway to the vehicle's network accessibility, Millstein asserts that telematics programs must become the firewall for the OEM's vehicle operating systems and the data protection manager for vehicle owners managing the content and interfaces allowed into their vehicle.
The transition from T1 generation voice services to T2 data-centric services will continue as current programs advance to even more sophisticated use of remote diagnostic and crash data. "You will also see the emergence of data that is more customer-centric and designed to personalize the drive," Millstein says. "However, with this will come the increased potential for mobile spam, which could have an extremely adverse effect on the industry if it emerges."
"Ford's and Microsoft's Sync system, which connects carried-in devices to in-car entertainment systems using Bluetooth wireless, is consistent with where we see the market going. It allows drivers to personalize their vehicles and integrates the vehicle — including the information that comes into it, as well as the interface — with the owner's lifestyle," Millstein said. "Telematics will give such systems like Sync much greater connectivity through multi-modal bandwidth to off-board applications. "At this point, Sync is an entertainment unit positioned on the car's CANBUS network, but with strict firewall control between it and any other in-car system. When safety and security and both crash and vehicle data applications are added, we believe Ford will eventually transition to an extremely low-cost embedded telematics system. We think the data will be too valuable to ignore and that inevitably this will be what the market will require."
Telematics is beginning to enable drivers to communicate with other drivers indirectly as they drive with specific drive- and location-based information. "For example, it's possible that BMW's 7 Series customers, who are all part of the same network, will receive digitized data on deteriorating localized weather conditions based on real-time feedback from other 7 Series drivers. That data will merge seamlessly with other geo-coded streams so that the driver receives it on a need-to-know, just-in time basis."
"Automakers will continue to look off-board for future functionality that telematics providers deliver. Using thin client content, the provider becomes much more ingrained in the daily drive than what can be provided through on-board systems," Millstein concludes. As part of the transition to the new T3 generation of services, infrastructure and connectivity, Millstein emphasized that the telematics industry and the automakers it serves must understand that telematics must continue to be driver- and owner-focused. "It can't be structured around new technology, a new protocol, or a new revenue model; all have to be built around the needs and preferences of the individual driver and how they interface with his or her vehicle,"Millstein says. For more information about ATX, visit the company's Web site. |
