Telematics market on verge of dramatic shift

The consumer telematics industry is poised for a dramatic shift this year, according to the findings of a new report from Allied Business Intelligence.  According to the report's findings, the aggregate global market for telematics is expected to grow to over $12.3 billion by 2007 from $2.2 billion for 2001.

As an indication of how fast this new technology and market is growing, the first directory of telematics companies will go on sale this week at the Telematics 2002 Conference in Detroit. The directory of 250 key telematics companies was compiled by the industry magazine Telematics Update.

"The 2003 model year will serve as the platform for U.S. OEMs to delve into new, uncharted waters in telematics by initiating new strategies," said Frank Viquez, senior automotive analyst and the author of the report issued by Allied Business Intelligence. "This includes employing wireless networking technologies like Bluetooth, relinquishing service development to wireless carriers, utilizing new distribution channels, and exploiting new wireless links such as satellite and terrestrial digital radio."

Launch soon

Viquez said automakers will soon launch telematics services which will incorporate new business models and hardware offerings atop the two which currently exist in the U.S. today. Those two products are  OnStar's off-the-shelf offering and a private label solution from ATX. DaimlerChrysler's U-Connect service will feature Bluetooth-enabled hardware, and telematics services from AT&T Wireless.

At the same time, Wingcast's service will launch in some Ford and Infiniti vehicles as a factory-installed option, or through aftermarket consumer electronics channels in partnership with Directed Electronics, according to the ABI report. Consumers will have the choice of an embedded factory-installed device offering seamless telematics services in or out of the vehicle, or an aftermarket Wingcast AVL (automatic vehicle location) solution which will share many of the same basic safety and security services of the embedded product.

In Europe and Asia, several OEMs are forming telematics partnerships to dilute their risk, as they deploy restructuring programs and focus on core competencies. Glimpses into OnStar and Wingcast's overseas telematics strategies for these regions are also coming to light.

Status and potential

The report, "The Digital Car: Dynamic Player Roles and Business Models in the Telematics Value Chain" discusses shifting OEM strategies and the status of and potential for telematics systems. In addition to providing analyses of key market players, the report details emerging, market-driving applications and technologies, and outlines the market potential for telematics hardware, subscribers, and revenues segmented on a geographic basis. 

Allied Business Intelligence is an Oyster Bay, NY-based technology research think tank that publishes research and technology intelligence on the wireless, automotive, electronics, residential and energy industries.

Vincent Lau, sales manager for the Telematics Update magazine, said the new industry directory is available online as a database tool and in printed format. Subscribers will receive monthly updates. The directory is to be launched by Telematics Update Magazine at the start of the annual Telematics conference in Detroit May 15-16, alongside the Auto Interiors Expo in the Cobo Center.