The telematics market has witnessed a surge in interest as users realize the convenience of using everyday tools such as the Internet and electronic services on the move. The improved market prospects have encouraged technological advances in telematics, and now, users can connect their location-based service (LBS) mobile phone to the vehicle and access services like the Internet.
New analysis from Frost & Sullivan, Strategic Analysis of the Telematics and Location-based Applications and Services Market in North America, finds that telematics can help users access various services by streaming large amounts of data into the vehicle through 3G or 4G networks.
With vehicle manufacturers introducing more applications requiring real-time data, telematics will assume greater importance in supporting the real-time wireless communication between the on-board device and the off-board server.
"Automakers should have telematics as a standard feature in all its models because it utilizes real-time diagnostics and can save millions of dollars in warranty and recall costs," says Frost & Sullivan Senior Research Analyst Sathyanarayana K. "Automakers have to partner with wireless carriers and educate their global positioning system (GPS)-equipped phone subscribers to use their phones in cars."
However, automakers and system suppliers could face issues of obsolescence and mismatch between automobile and consumer electronics products. They could alleviate these problems largely by developing a standards-based, flexible, and open architecture platform to keep the product relevant for a longer period.
Telematics service providers (TSPs) also need to expand their subscriber base to tide over the current lean phase. For instance, OnStar has rescinded its earlier decision to offer its services only to GM vehicles, despite GM's recent announcement of offering telematics as standard in all its vehicles. It has decided to extend its telematics services to other automakers to enlarge its subscriber base and stay afloat in the market. A wider subscriber base is vital as most TSPs' operating costs remain fixed, which means their per-subscriber costs will increase if they lose subscribers.
"Other TSPs may increase the renewal rates to offset free (new) subscriber losses by offering every-day use services such as turn-by-turn navigation, real-time traffic as well as mobile and portable device integration," notes Sathyanarayana. "They are also considering replacing certain operator-driven services by automated services."
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