Telematics vendors rev up for US$2.6 billion opportunity

Auto industry representatives said Wednesday at a communications conference that although revenues in the telematics sector will more than double by 2010, the industry must work together to promote the use of wireless applications in vehicles.

Telematics, the merger of wireless communications,

vehicle monitoring systems and location devices, last year generated North American revenues of US$1.2 billion that will rise to US$2.6 billion in six years, predicted Inge Matthey, vice-president of Frost & Sullivan’s automotive practice, at Expo Comm Canada in Toronto.

The technology, which requires two-way communication between a vehicle and a service centre, was introduced to North America in 1996, and can assist in massive disasters like terrorist attacks and day-to-day emergencies like truck crashes, hazmat spills and crimes. Telecom carrier Verizon Communications is one of the providers in the field.

Although critics argue drivers may have cell phones or membership in organizations like CAA, the advantage of telematics is it features automatic GPS location services, said Mike Peterson, director of sales, marketing and product development at GM OnStar, a telematics service company.

Among the obstacles to the widespread adoption of telematics, however, is that “”there’s a lot of data out there, but it hasn’t been aggregated and brought to the right people,”” said David Aylward, director of the ComCARE Alliance in Washington, D.C., made up of more than 90 organizations in fields like emergency response, communications, technology and transportation.

This is why he describes the emergency response systems of Canada and the U.S. “”total IT and communications disasters. As two sister countries, we’ve got to get our act together.

“”Real-time information and information-sharing is critical for emergency responders”” because it saves both time and lives,”” he said, adding important data to know in an accident includes a driver’s drug allergies and health conditions.

At the moment, though, law enforcement agencies are the only emergency organizations appropriately using technology and communications.

The car industry is also contributing to the problem by failing to equip most vehicles with these wireless capabilities, explained Matthey. She said customers don’t see the value of the services and therefore usage is low.

Indeed, said Aylward, it wasn’t helpful that GM OnStar debuted ads about its telematics service only last January. These same ads ran in Canada featuring actors with Southern U.S. accents that didn’t resonate with Canadian viewers, he said, emphasizing that providers must start pushing products to consumers.

One way to encourage the regular use of telematics is by creating compelling applications for customers that offset the fact telematics providers are losing their major application, personal calling, to Bluetooth-enabled portable devices, Matthey explained.

GM OnStar each month responds to 800 air-bag deployments, 8,000 emergency calls, 16,000 requests for roadside assistance and 800 stolen vehicle requests, said Peterson.

He said GM OnStar is available for most GM vehicles, as well as for automobile manufacturers like Subaru, Saab, Audi, Acura and Volkswagen.

Although telematics focuses on vehicle security and passenger safety, it’s also about offering conveniences and useful information to drivers, said John Fisher, president and CEO of DMTI Spatial Inc. of Markham, Ont.

On the consumer side, real-time traffic reports are being readily distributed, but real-time weather and parking availability are “”starting to come upstream,”” said Fisher. He said people would be willing to pay for services informing them of a better route to take in the event of bad traffic or an accident, but this is a workable plan only if telematics providers can offer comprehensive service coverage.


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