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Telematics and the future of cars

By: Precksha Saksena

Date: 2008-04-06

Editor's note: If you don�t know what telematics is, look it up now. It's shaping your future, and automotive telematics is shaping cars of the future. Next month (May 20 � 22) Precksha Saksena is organizing the 2008 version of Telematic Update's annual Telematics Detroit Conference and Exhibition at the Rock Financial Showplace in Novi, just outside the city. �Months of research,� she says, �have led to the realisation that the telematics industry may have gone full circle, and is now able to sustain a profitable business case for the basic telematics services that failed to take off in 2001.�

It�s not uncommon to have two schools of thought on most things, but in the telematics landscape there has never been a more obvious divergence than the one coming into play now. Exciting yet challenging times lie ahead for this industry, and it's time for us to sit up and take notice!

Some telematics researchers and analysts believe that the North American market will see a resurrection of pure telematics. Before discussing this further, let�s clarify what the industry gurus mean by "pure telematics".

Pure telematics is deeply embedded hardware or software and telecommunications for the purpose of providing and facilitating applications that serve the car and its occupants. Telematics enables safety, security, monitoring of vehicle health, remote diagnostics and emissions compliance. For the occupants, embedded systems can be used to provide dynamic location-based services such as navigation, traffic information, and a suite of driver's services based on 2-way connectivity.

The reason for re-iterating this oft-heard definition is because the latest survey findings suggest that consumers are finally being won over by the myriad services offered by telematics. According to several research houses that have been tracking sales of telematics devices over the past six years, there has never been a better take-up of telematics devices than now. If this growth rate continues, a decade from now every vehicle will have pure telematics.

The icing on the cake is not just a pure telematics renaissance; it's another concept altogether. It's the idea of bringing the Internet to the car, and while this is neither new nor earth shattering, it's something that didn't work in the past decade because the automakers didn't have a sustainable and intelligent business model to implement it.

The automakers are now working with web companies, devising ways of connecting this technology intelligently and cost-effectively in order to integrate the car into the connected world. The premium automakers are working towards making telematics the core of the connected vehicle, and ensuring that the business model is robust and fool-proof this time around.

Why now? Are the Original Equipment Manufacturers (OEMs) only able to provide the services now because of the new partnerships they created, away from over-controlling service providers? Maybe. But the competition from connected mobile devices has clearly acted as a very powerful catalyst.

Personal Navigation Devices (PNDs) and smartphones are grabbing consumers' fancy, and navigation systems are on a lot of Christmas wish lists. So much so, there were rumors that the pre-Christmas shopping frenzy had cleaned out some top PND retail outlets, despite their being well stocked.

The mobile navigation market is highly challenging. In fact, venture capitalists and investment banks suggest the market is becoming more mature even as I write this.

Companies say that cutthroat competition and falling prices are eating into margins, and services are the only way out.

Even PND manufacturers, who are heavily reliant on sales, are aiming towards delivering their brand of navigation as a service product. As more devices have navigation capabilities, it won't be about the hardware but about the service, and something that provides two-way communication and lends itself to the consumer' lifestyle.

Even automakers are realising that it's not the hardware but the suite of services that will help them win the day. The wireless mobile and wireless automotive communities are fighting tooth and nail to win consumers' hearts and minds.

The battle between pure telematics and Location-Based-Services through mobile devices is becoming even more brutal and intriguing. There is no place on the fence. Pick your side now!

Precksha Saksena is organising Telematics Update�s flagship conference, Telematics Detroit 2008, May 21 -22, The Rock Financial Showplace, Novi, MI. She can be contacted at

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