GPG
Automotive Telematics and
Multimedia in the United States
Electronic toll collection Car navigation
Traffic management and routeguidance On-board internet and
Internet and e-mail access “Mobile office” Theft-tracking Emergency call
On-board collision-warning Interactive vehicle diagnostics Value-added content services Nav Systems
Reservations Entertainment Bundled systems Communications Video games DVDs Integrated systems
Electronic toll collection Car navigation
Traffic management
G LOBAL P OLICY G ROUP

GPG
Automotive Telematics and
Multimedia in the United States
Outline of Presentation
• Defining Telematics
• Passenger Car Telematics Market Overview
• Commercial Vehicle Telematics Market
Overview
• Recent Developments: Emerging Drivers of
Growth in the Passenger Market
• Future Trends in Passenger Car Telematics
• Future Trends in Commercial Vehicle
Telematics

GPG
Automotive Telematics and
Multimedia in the United States

GPG Defining Telematics
the convergence of wireless communications, location technology, and in-vehicle electronics which is being used to integrate the automobile into the information age

GPG
Telematics Building Blocks:
Technologies
Location
Technology
Voice-recognition
Technology
Communications
Technology
Map
Databases Integrated Telematics Systems
Navigation
Systems
Mayday
Systems
Car
PCs
Audio/
Video
Systems
Interior
Systems
Wireless
Phones
Networking and Vehicle
Interface
Technology

GPG
Telematics Building Blocks:
Applications and Services
Services available using telematics devices:
Emergency call or mayday services
Device-to-device communications
Interactive on-board entertainment
Navigation and route guidance services
Remote vehicle access and diagnostics
Person-toperson communications
E-commerce applications
Interactive valueadded services
Commercial fleet management
Remote vehicle theft tracking

GPG
Automotive Telematics and
Multimedia in the United States

GPG
The U.S. Passenger Car Market:
Current Device Options
• Autonomous navigation systems
• Integrated multimedia systems
• On-board personal computers
• Rear-seat entertainment systems
• Installed wireless phones
• Can be integrated with mayday service
 Handheld wireless phones and PDAs
• Not telematics devices
• Could affect telematics demand
• Similar technologies/functions, but portable
• Wireless integration soon possible

GPG
The U.S. Passenger Car Market:
Current Service Options
• OEM mayday or emergency call services
• GM/Saab OnStar, Ford/Lincoln RESCU,
Mercedes TeleAid, Jaguar Assist, etc.
• Simple interface, connects to human voice
• Fee- or subscription-based
• Range of services (mayday, concierge, etc.)
• Independent information and emergency call services
• ATX, Cross Country Group
• Similar services, fees, etc., to OEM systems
• Often serve as call centers for OEM systems

GPG
The U.S. Passenger Car Market:
Key Telematics Suppliers
Automotive networking and interface firms
Satellite radio firms
Automotive audio firms
Dot.coms Communications technology firms
Automotive
Telematics
Location technology firms
Call center firms
Nav system producers Automotive interior firms
Automotive electronics firms
Voice recognition technology firms
Mapping software firms

GPG
Automotive Telematics and
Multimedia in the United States

GPG
The U.S. Telematics Market:
Telematics Devices for Tractors
• On-board integrated telematics systems
• On-board computer, GPS, wireless communications, interface with tractor data bus
• Driver interface in cab for data and voice communications with dispatcher
• Screen for incoming text messages with keyboard or touchscreen for sending messages

GPG
The U.S. Telematics Market:
Telematics Devices for Trailers
• On-board integrated tracking systems with
GPS receiver/antenna, wireless communications, and battery/charger
• On-board sensor systems to allow monitoring of whether trailer is loaded, doors open, temperature, etc.
• Sensor system often integrated with tracking system to send real-time information to the fleet office

GPG
The U.S. Telematics Market:
Commercial Vehicle Services
• Communications
• Tractor and trailer location
• Routing/dispatch/ETA information
• Electronic driver logs
• Reporting
• Billing/accounting
• Electronic customer relations management
• Remote tractor/trailer monitoring/diagnostics
• Theft monitoring
• Driver performance monitoring
• Fleet management, cost, productivity assessments

GPG
The U.S. Telematics Market:
Fleet Service/System Providers
•
Communications/information service providers
• American Mobile, Qualcomm/OmniTRACS,
ARINC/Dominium, HighwayMaster, Orbcomm
•
Communications/information systems providers
• Cadec, XATA, Eaton
•
Internet-based communications/information services
• @Road, Qwiktrack
•
Truck-stop kiosk/hook-up internet-based communications/information services
• DriverNet.com, PNV

GPG
Automotive Telematics and
Multimedia in the United States

GPG
Driver #1:
Volume
• More telematics and multimedia devices as
OE options on MY2000 cars and light trucks
• Primarily on luxury models and minivans
• Some telematics and multimedia devices are standard equipment in
MY2000
• Only on luxury models

GPG
Driver #1:
Volume
• More OE telematics services in MY2000
• Particularly emergency-response services
• Some (OnStar) expanding beyond luxury models
• OnStar available on 29 MY2000 GM models
• Rely on simple interface, human contact
• More OEMs providing telematics service interface as standard equipment
• Revenues derived from service fees or subscription

GPG
Driver #1:
Volume
• Expanding range of products is essential to market’s growth
• Increasing consumer awareness of telematics
• Availability in rental cars, increased advertising (especially OnStar and Mercedes)
• Telematics systems in hands of early acquirers and other trend-setters
• High satisfaction and intention to make second purchase among telematics users
• Higher volumes reduce prices, encourage innovation and integration

GPG
Driver #2:
Proliferating Industry Alliances
Automotive electronics firms
Voice technology firms
Communications technology firms
Computer software firms
Mapping software firms
OEMs
Automotive interior firms
Telematics suppliers
Call center providers
Nav system producers
Telecom service providers
Location technology firms
Networking technology firms
“Content” providers
OEMs
Telecom equipment providers

GPG
Driver #2:
Proliferating Industry Alliances
• Telematics applications depend on diverse technologies
• Beyond scope of one individual company
• Beyond scope of automotive OEMs
• Beyond scope of traditional automotive suppliers
• Beyond scope of telecom, consumer electronics,
IT suppliers
• Telematics services require diverse types of content, customer relations, etc.
• Alliances essential to meeting needs for diverse technologies and skills

GPG
Driver #3:
Movement on Standards
• Auto and electronics firms cooperate on standards
In-vehicle Telematics
Standards
TSC AMI-C
IDB
Forum
SAE
Standardizing interfaces to promote “plugand-play”
Standardizing open networks through
ITS Data Bus

GPG
Driver #4:
Benign or Supportive Public Sector
• Regulations have helped create market
• E-911 regulation provided invaluable boost to
GPS location technology
• EPA and CARB regulations helped drive OBD-I and OBD-II development
• Federal and state governments actively promoting ITS research and deployment
• Safety concerns on hold so far, but threaten
• Industry adopting some self-regulation
• NHTSA focus to date on cell phones
• States and localities also concerned

GPG
Driver #5:
Telematics and E-commerce
• Many OEMs view telematics services as part of web that extends customer relationship
• Envision wide-ranging revenues from service fees, vehicle maintenance, advertising, etc.
• Simple interface as standard equipment
• Contrast with device-led growth in Japan
Internet content
Internet portal
Satellite
Radio
OEM
Call center
Service
Providers

GPG
Recent Developments Drive
Projections of Growth
Subscribers to Telematics Services
12
10
8
7.98
11.17
6
4.96
4
2.54
2
0.01 0.06
0.2
0.82
0
1997 1998 1999 2000 2001 2002 2003 2004
Source: The Strategis Group

GPG
Automotive Telematics and
Multimedia in the United States

GPG
Key Features of Next-Generation
Telematics Devices
• Simple interface
• Technological capabilities must be balanced by safety concerns and consumer interests
• Voice recognition and text-to-voice
• May be key to safety while car is moving
• Systems may limit some functions to parked car
• “Plug and play”
• Consumer will be able to install next-generation telematics and multimedia systems
• Overcomes disparity in design and life cycles

GPG
Key Features of Next-Generation
Telematics Devices
• “Node on the internet”
• Connect vehicle to internet content
• Safety concerns must be addressed
• Real-time features
• Real-time traffic key to growth in nav systems
• Move away from limited coverage of autonomous CD- and DVD-based systems
• Integration of functions
• Single interface for wide range of applications
• Communications (data and voice), navigation, audio, vehicle controls

GPG
Next-Generation Telematics:
Is Integration the Killer Application?
• Everyone hopes for a single “killer app”
• Navigation systems key in Japan
• Killer application in U.S. could be integration
• Integration of interface for voice/data communications, vehicle controls, vehicle diagnostics, location technology, etc.
• Integration can ease driver distraction
• Integration driving cross-sectoral alliances
• Risk: Integrated devices can easily become outdated as technology rapidly changes
• Does the answer lie in services, not devices?

GPG
Key Features of Next-Generation
Telematics Services
• Voice/human contact essential
• Call centers will not be replaced by internet
• Particularly essential to mayday services
• Most important to older buyers
• Location-based content to increase
• Nationwide coverage essential
• Real-time traffic, weather, road status
• Location-based concierge services and POIs
• Location-specific targeted advertising

GPG
Leading Areas of Consumer Interest in Telematics Services
Remote Door Unlock
Routing Assistance
Remote Diagnostics
28%
31%
31%
Lost & Found
Stolen Vehicle Tracking
Vehicle Alarm Notification
Severe Impact Notification
Airbag Notification
Roadside Assistance
24%
25%
41%
38%
56%
61%
Emergency Response
Source: ATX Technologies
61%
0% 10% 20% 30% 40% 50% 60% 70%

GPG
Potential Roadblock #1:
Price
• OE telematics devices still expensive
• Installed nav systems cost $1800-$2000
• Often bundled in luxury packages costing anywhere from $2500 to $7000
• Aftermarket systems also expensive
 Device prices must come down
• Telematics services usually start at
$200/year for basic package
 Service prices less an issue – provided interface is standard equipment

GPG
Potential Roadblock #2:
Competition from Portable Devices
Portable
Cell phones
Smart Phones
Laptops
PDAs
Nav Systems
Driving
Technology
Bluetooth
Vehicle
Portable
Dockable Cell phones
Installed
Mayday Systems
Nav systems
Audio/Video
Systems
AutoPC

GPG
Potential Roadblock #3:
Privacy
• Privacy issues long raised about Internet
• Ability of Web sites to track individual preferences without permission raises concerns
• Telematics compounds concerns through vehicle tracking, remote monitoring, etc.
• Concerns already appear in trucking industry
• Consumer concerns slow ITS deployment
• Consumer concerns likely to grow
• Telematics service revenues depend on location-specific advertising, selling location and purchase information, etc.

GPG
Potential Roadblock #4:
Infrastructure
• Telematics infrastructure poorly developed:
• Multiple wireless communication standards
• 3G may resolve some of this problem
• What about 4G?
• Traffic information is inconsistent
• Traffic Data Forum aims to address issue
• Poorly developed public ITS infrastructure
• National ITS Architecture could address interoperability issues
• ITS Deployment funding increasing
• Unclear support for IVI research

GPG
Potential Roadblock #5:
A Proliferation of Standards
Device-to-Device
Connection Standards
Communication
Standards
IrDA
Bluetooth
In-vehicle Telematics
Standards
3GPP
WAP
TSC AMI-C
IDB
Forum
SAE
Traffic
Data
Forum
ITS
Standards
Infrastructure Standards
Safety
Standards?

GPG
Potential Roadblock #6:
Safety
• Regulators target cell-phone use in cars
• NHTSA recently issued public warning
• States and localities consider bans
• NHTSA now targeting in-vehicle telematics
• NHTSA “forum” and public hearing assess industry efforts, need for federal action
• Ongoing driver-distraction studies seek data
• In-car internet and e-mail of particular concern
• Hands-free does not solve distraction problem
• NHTSA open to industry self-regulation
• Emergence of groups modeled on MADD?

GPG
Automotive Telematics and
Multimedia in the United States

GPG
Long-Haul Trucking to Remain Key
Telematics Market
• Key customers in long-haul trucking sector
• Larger for-hire fleets have resources and needs
• Evolving technology offers growth opportunities
• Sector dominated by proprietary systems and well-entrenched national providers
• Qualcomm, HighwayMaster, American Mobile
• Developing new products and services to take advantage of new technologies
• Trailer-tracking offers new growth area
• Demand driven by concerns about theft, lost trailers, efficient fleet-management, etc.

GPG
Commercial Vehicle Telematics:
Future Trends
• Open data bus could offer new opportunities
• IDB Forum has held discussions with heavytruck standards groups
• Adoption of IDB architecture could open door to new services and devices
• Multimedia, in-cab computer, infotainment
• Truck makers could become more active
• Portable devices would appeal to fleets that rely on rental units
• “Turnkey” solutions would appeal to smaller
LTL fleets and short-haul fleets

GPG
Commercial Vehicle Telematics:
Future Trends
• Growth in location-based wireless fleetmanagement services
• Communications, asset tracking, remote diagnostics, theft monitoring, etc.
• Integrates electronic fleet-management and
CRM functions with the Web
• Integration with “virtual” marketplaces
• Existing suppliers, communications, and software firms developing new products
• Smaller fleets prime market for new internetbased technology and services

GPG
Commercial Vehicle Telematics:
Privacy and Safety Pose Threats
• Privacy issue is a major potential roadblock
• Fleets use data for performance reviews, incentive programs, etc.
• Truckers angered by close monitoring of performance, driving techniques, etc.
• Drivers and unions oppose tracking of trucks
• Fears of “big brother”
• DOT mandate of electronic recorders sparks backlash
• NHTSA and FMCSA concerned about safety of trucking telematics systems

GPG
Commercial Vehicle Telematics:
A More Mature Market
• Unlike passenger market, trucking sector has existing telematics infrastructure
• Long-haul market dominated by Qualcomm, etc.
• Heavy investment to date make it hard for fleets to move to more open systems
 Truck makers play little role to date
• Smaller fleets offer best target
• Internet-based services appealing due to low start-up costs
• Truck-stop services target individual truckers
• Fast-growing short-haul sector also key

GPG
Automotive Telematics and
Multimedia in the United States

GPG
Summing Up:
Keys to the U.S. Telematics Market
• Development of integrated devices with simple interfaces that address safety concerns – at an affordable price
• Need to provide more than portable devices
• Standardization is key to meeting goals and offering latest technology in the car
• Simplicity and safety essential in vehicles, even at expense of “gee-whiz” technology
• Industry must impose limits – or regulators will
• Risk of public backlash if safety not addressed

GPG
Summing Up:
Keys to the U.S. Telematics Market
• Development of targeted services delivered safely with low-priced (or free) interface
• Need to compete with other similar services
• Potential competition from telcos, etc.
• Consumers do not want multiple internet accounts, e-mail addresses, phone accounts/numbers
• OEM-Internet alliances may be answer
• Privacy could become increasingly important
• Key question: Why should the consumer pay an automaker for these services?

GPG
Automotive OEMs and Telematics:
Competing in an Open Market
• OEM service-focused strategy endangered by open access, portable devices
• Europeans see handheld devices as key
• Safety/roadside aid services clearly appeal
• Voice contact essential in U.S. market
• Key test: Renewal rate for OnStar
• Costs of delivering such services will escalate as subscriber base grows
• OEMs must get consumers to buy broader range of services from them