Report: Telematics could experience second wave of innovations

After experiencing lukewarm initial growth, the North American commercial vehicle telematics market appears poised to experience a second wave of technology innovations, application penetration and market growth. Specifically, multi-modal communication network advancements, reduced costs, and increasing safety and security concerns will drive market growth between 2008 and 2013, according to one published report.

New analysis from Frost & Sullivan, “North American Commercial Vehicle Telematics Markets,” finds that the market earned revenues of over $1.48 billion in 2007 and estimates this to reach $6.47 billion in 2013.

“In recent years, the North American commercial vehicle telematics market has not achieved the spectacular growth rates that many industry observers had projected it to attain,” says Frost & Sullivan Program Manager Sandeep Kar. “The prevalence of several market restraints have decelerated the market’s growth and constricted it to remain in a state of flux. However, this is changing fast as the local-fleet, regional-fleet, and trailer telematics markets experience growth momentum.”

The next level of telematic technologies will integrate telecommunications and focus on operations automation, security, communications, monitoring, prognostics, and mobile resource management applications. However, low awareness of the technology’s benefits, high system costs, and the lack of standardized technology platforms pose major hurdles to the speedy adoption of these systems in the North American market.

To spur growth, market participants need to develop scalable solutions based upon standardized multimodal communication network architectures which feature compatible technologies and communication links that provide maximum applications at optimal overall costs.

The failure of telematics to deliver the desired performance during the initial stages of its development led to the exit and consolidation of market participants. Now sustainable growth appears possible with the correction of fundamentals and the building of supporting structures.

“Since commercial vehicle telematics is currently in the development stage of its lifecycle, it is recommended that service providers aggressively market their value-added services by focusing on their ability to improve the productivity and profitability of local-fleets. This will assist mass-market adoption of the technology, thereby enabling market participants to gain greater economies of scale by increasing their consumer base,” notes Kar.

In short, as North American commercial vehicle operators increasingly seek to enhance operating efficiencies, the convergence of a comprehensive suite of telematics technologies and solutions will likely propel the market’s progression.

For more information, visit www.frost.com.