NASHVILLE -- Automakers’ woes can be an opportunity for the aftermarket in the world of telematics. Financial setbacks and a slower speed to market are some of the problems OEMs face, but the aftermarket is in a unique position to capitalize on this predicament.
“The pressure (OEMS) are under seems to be an open door the aftermarket can walk through,” says Derek Kaufman, president and founder of C3 Network, and the opening speaker at the Automotive Distribution Network’s national convention in Nashville.
Kaufman, an industry telematics expert, also is the author of the "Telematics Primer -- The Aftermarket's Role in the Telematics Future," which was commissioned by the Automotive Aftermarket Industry Association (AAIA).
Telematics, which Kaufman says can be a threat and an opportunity for the aftermarket, is basically a means of two-way communications for automobiles and can include anything from Global Positioning Systems (GPS) to entertainment, vehicle diagnostics, stolen vehicle recovery and safety and security features, among a myriad of other advanced technologies.
Kaufman’s message for the aftermarket, however, is this: “I believe the whole telematics front is an opportunity for the aftermarket.”
About 28 percent of vehicles in the U.S. have telematics devices, says Kaufman, who adds that this number is expected to equal 40 percent by 2012.
Telematics is expected to be a $2.4 billion market in the U.S. alone by 2012, with a $9.3 billion global market expected during the same timeframe.
The aftermarket can get products to market much more quickly than the OEMs can, and with telematics serving as a rapidly changing technology sector, timing is integral. Kaufman cites a Michigan transportation official, who’s quoted as saying the technology itself doesn’t matter as much as the fact that the aftermarket has the ability to get this technology into applications first.
There are many stakeholders in telematics, including everyone from information aggregators and network suppliers to automotive service providers, government and retailers.
A pivotal player in telematics is hand-held smart phones, like the iPhone, and moving forward, cellular phones will become a game-changer in the telematics realm, Kaufman says. With hand-held devices, the vehicle becomes a docking station for entertainment and wireless Internet, among other uses.
Kaufman encourages the industry to take an “open source” approach with hand-held applications, which will allow outside developers to help problem-solve and come up with sophisticated programs.
Open source is a successful model for software development because it relies on a far-reaching network of experts. “If you open source it, anyone can play,” says Kaufman, who adds that with an open source mindset, the best talent is out there (but) they don’t want to be contained within the confines of a company’s four walls.
He also says the industry is in need of a Telematics Consortium to help the aftermarket compete with OEM telematics providers.
“If we can get with a Telematics Consortium, the OEs might be open to new ideas,” suggests Kaufman.
To look down the road at telematics, product developers must first determine what type of vehicles consumers can afford, along with what kind of telematics products they can afford. “If you want to connect with a car, how far away is it?” Kaufman asks. Also, what type of information do drivers want to send and receive?
A telematics “hot button” is digital short range communication (DSRC). Essentially, DSRC can enable drivers to “see” around corners and ascertain if there are accidents or traffic snarls and plan alternate routes accordingly.
A vehicle-to-vehicle system can even help drivers “see” miles ahead of where they physically sit.
GPS is the foundation of telematics development, Kaufman offers. With advanced GPS, vehicles can be located to the accuracy of a license plate’s length, and assisted GPS enables providers to piggyback onto existing systems.
Cellular telephones typically have assisted GPS systems.
A service called Skypatrol allows providers to plan routes and use a feature called “geo-fencing,” which creates a boundary that the vehicle must stay within.
For example, if a parent sets up a “geo-fence” around his or her teen driver, the parent will receive a text message if the teen takes the vehicle outside of this designated area, or if the young driver exceeds a certain speed limit for that matter.
The geo-fence principle also is useful for fleet management and management of sales staff, Kaufman adds.
Skypatrol has a leg up over services like OnStar. Rather than drivers contacting an OnStar operator to have their doors unlocked, Skypatrol enables users to unlock their own doors by remotely using a password-based system.
“Skypatrol is a great example of a U.S. company that has figured it out,” says Kaufman, who encourages the aftermarket to consider “pay-as-you-go” services rather than the current subscription-based model used by some OEMs.
Click here for a video interview with Kaufman.
