International Telecommunication Union
Telematics – Realizing the
Opportunities
Michael Dornan
Automotive Analyst - Europe
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“The Fully Networked Car, A Workshop on ICT in Vehicles”
ITU- T Geneva, 2-4 March 2005
The Market is Growing
ITU-T
“How much has the telematics part of your business grown in the
past 12 months?”
% of respondents
19
More than doubled
11
Significant growth (>40%)
16
Strong growth (>20%)
15
Steady growth (>10%)
12
Little growth (<10%)
24
Stayed the same
Reduced
3
Base: Telematics Industry Survey - End 2004
© 2005
GartnerG2
The Fully Networked Car, A Workshop on ICT in Vehicles
ITU-T Geneva, 2-4 March 2005
2
Industry’s View of Telematics
Opportunity
ITU-T
Potential of Telematics
Increasing Opportunity
on a scale from Low to High (1 to 5)
Commercial Aftermarket
3.57
Portable Telematics
3.41
Commercial New Vehicles
3.80
2.97
2.89
ITS/Vehicle Infrastructure 2.84
Opportunity rating for 2005
3.15
© 2005
GartnerG2
3.81
3.14
Consumer Aftermarket
Public/Government
3.74
3.34
Consumer New Vehicles
3.75
3.47
3.27
3.24
Opportunity rating for 2006-7
3.59
The Fully Networked Car, A Workshop on ICT in Vehicles
ITU-T Geneva, 2-4 March 2005
3
Gartner Hype Cycle - Telematics
ITU-T
Key: Time to “Plateau”
In-Car Digital/
Satellite Radio
Visibility
Advanced
Collision
Avoidance
Systems
Public
Telematics
In-Car HandsFree Input
Technology
Trigger
<2 years
X-by-wire
Technologies
Remote
Diagnostics
Consumer
Telematics
Peak of
Inflated
Expectations
2–5 years
5–10 years
Flop?
>10 years
Soon obsolete
Commercial
Telematics
Bluetooth in
Automotive
MOST
(Media Oriented
Systems Transport)
Trough of
Disillusionment
Slope of
Enlightenment
Plateau of
Productivity
Maturity
© 2005
GartnerG2
The Fully Networked Car, A Workshop on ICT in Vehicles
ITU-T Geneva, 2-4 March 2005
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Telematics Hype Curve - Consumer
Segment
Consumer
ITU-T
Visibility
High
Demand
Non-automotive content and
app. providers see telematics as
a new channel opportunity
High
Wingcast dissolution
Reduced investment activity
Search for new “second-tier”
telematics market
opportunities/segments
New telematics service
providers enter the market
Growing interest &
investments from
automakers, suppliers &
technology providers
Growing market
consolidation and
company closures
Development of
apps. that meet
customers’ needs
Integration of
telematics services
into broader,
mobile service
offerings
Realization of
true potential
of telematics
OnStar launch
Advent of the
Internet and mobile
computing
Low
Low
Technology
Trigger
1994-2000
Low
© 2005
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Peak of
Inflated
Expectations
Trough of
Disillusionment
Slope of
Enlightenment
Plateau
2001
2002-2003
2004-2006
2007-2012
We are here !
The Fully Networked Car, A Workshop on ICT in Vehicles
ITU-T Geneva, 2-4 March 2005
Maturity High
5
What’s Holding Telematics Back?
Importance
ITU-T
© 2005
GartnerG2
How important do you think the following factors are for accelerating
market adoption for telematics solutions in all market segments in Europe?
Cost reductions in technology hardware and software
Flexible Pricing Options (e.g. choice pay-per-use or subscription)
Telematics embedded onto new models of vehicles
Better education on benefits for target customers
Partnerships/JVs between vehicle makers and TSPs
Consumer focussed telematics promotions by Dealerships
Establishment of industry consortiums (e.g. create open platforms)
Telematics offerings accessible outside the vehicle (e.g home, office)
Government Regulations (e.g. restriction on in-car phone use)
Market rollout of telematics solutions by Network Carriers
Commitment to telematics by Software Companies
Widespread adoption of Bluetooth
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ITU-T Geneva, 2-4 March 2005
6
Industry’s Next Moves
ITU-T
“Please rate the importance of the factors listed below in increasing your
company`s business opportunities in the telematics market in the next 13
to 36 months.”
Consumer
Market
Commercial
Market
Public/
Government
Portable
Telematics
ITS/Vehicle
Infrast’ure
1st
New
Customers
New
Customers
Build
Awareness
New
Customers
New
Customers
2nd
Customer
Needs
Customer
Needs
New
Customers
Build
Partnerships
Reduce Costs
3rd
Create New
Offerings
Build
Awareness
Customer
Needs
Build
Awareness
Build
Partnerships
4th
Improve
Offerings
Build
Partnerships
Create New
Offerings
Improve
Offerings
Customer
Needs
5th
Reduce Costs
Reduce Costs
Build
Partnerships
Existing
Customers
Existing
Customers
© 2005
GartnerG2
The Fully Networked Car, A Workshop on ICT in Vehicles
ITU-T Geneva, 2-4 March 2005
7
Consumer Telematics Segmentation
ITU-T
Company Car
Private New Car
Company Car
Choosers
Professionals and
Managers that drive
company cars.
Nearly-New Car
Premium New Car
Owners
Private owners,
premium new cars.
New Car Families
Mainstream new car
owners with kids.
Older-Used Car
Nearly New Car
Families
Nearly new car owners
with kids.
Younger Nearly New
Car Owners
Young New Car
Nearly new car owners
Owners
Company Car
Users
<45, no kids.
Mainstream new car
owners < 45, no kids. Older Nearly New Car
Sales and other
occupations that drive
Buyers
Older New Car
company cars.
Owners
Mainstream new car Nearly new car owners
45+, no kids.
owners 45+, no kids.
Addressable
© 2005
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Budget Buyers
Owners of vehicles
aged over 3 years
when bought.
Non-Addressable
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ITU-T Geneva, 2-4 March 2005
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Consumer Telematics Segmentation
- Summary
ITU-T
Company Car Choosers
nnnn
llll
uuu
Company Car
nnnn
lll
uu
Premium New Car
Nearly New Car Families
nnnn
lllll
uuuuu
nnnnn
ll
uuuu
New Car Families
nnn
llll
u
Users
Younger Nearly
Car Owners
Young New Car
nnnn
ll
u
Older New Car
New
nn
llll
uuu
Older Nearly New
Buyers
n
ll
uu
Overall interest in Telematics …………………..
Willingness to Pay for Telematics Hardware …
Willingness to Pay ongoing usage charges ….
© 2005
GartnerG2
Budget Buyers
n
lll
uuuu
Car
n
l
uu
nnnnn
High...
lllll
High...
uuuuu High...
The Fully Networked Car, A Workshop on ICT in Vehicles
ITU-T Geneva, 2-4 March 2005
n Low
l Low
u Low
9
Interest in Telematics Services
ITU-T
“How interested would you personally be in each of these services?”
% of respondents saying VERY INTERESTED
Remote immobilisation and tracking
if car was stolen
45
Emergency services notified
in
event of an accident
44
Insurance premium based
on
my driving patterns
Automated breakdown
33
recovery
service
26
Instant access to
local
traffic information
25
Access to location specific
information (e.g. local hotels)
9
Base: All car drivers, UK
© 2005
GartnerG2
The Fully Networked Car, A Workshop on ICT in Vehicles
ITU-T Geneva, 2-4 March 2005
10
Car Manufacturer’s Need
Move Quickly
ITU-T
To
“Who would you personally consider as a provider of this system and services
for your vehicle?”
Other Possible Providers…
The Car Manufacturer
(Not a Third-Party)
Car Dealership
(No.2 in Germany)
24
Insurance Company
(No.2 in France)
Another Provider
(Not the Car
Manufacturer)
Would Consider Both
(Manufacturer or a
Third-Party)
43
33
Breakdown Provider
(No.2 in UK)
Police/Government
Retailers
Auto Electronics Fitters
Mobile Phone Companies,
Etc.
Base: All car drivers, Germany
© 2005
GartnerG2
The Fully Networked Car, A Workshop on ICT in Vehicles
ITU-T Geneva, 2-4 March 2005
11
Some Closing Thoughts
ITU-T
§ In ALL markets, start simple, then grow.
§ Segmentation is Crucial in All Market Segments. One
Size will NEVER fit all.
§ European Consumer Private New Car Market – Selling
Technology to Over 45s.
§ eCall Legislation Will Provide Visibility and a Trojan
Horse Opportunity.
§ Commercial Opportunity - Increasingly Seen as
Aftermarket (Greater Flexibility).
§ Think End-User, NOT Technology.
© 2005
GartnerG2
The Fully Networked Car, A Workshop on ICT in Vehicles
ITU-T Geneva, 2-4 March 2005
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For More Information
ITU-T
Michael Dornan
Automotive Analyst
+44 1784 267910
michael.dornan@gartner.com
gartnerG2.com
The Fully Networked Car, A Workshop on ICT in Vehicles
ITU-T Geneva, 2-4 March 2005
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