Is pure telematics on the way back?

Precksha Saksena of Telematics Update explains how months of research have led to the realisation that Telematics may have gone full circle and is now able to sustain business case for basic services that failed to take off in 2001.

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

Some telematics researchers and analysts believe that there is going to be a resurrection of pure telematics in the North American market. Before discussing this further I will take a moment to explain 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 for serving the car and the passenger. On the car side telematics enables safety, security, monitoring the health of the vehicle, remote diagnostics and emissions compliance; and on the passenger side embedded systems can be used to provide dynamic location based services such as navigation, traffic information as well as a suite of passenger services based on two-way connectivity.

The reason I’m 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. Several research organisations have been tracking the sales of telematics devices and have stated that in the past six years there has never been a better up-take of telematics devices than now. If these numbers continue to increase till 2012 then the rate of growth will be very robust and a decade from now every vehicle will have pure telematics.
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Internet in the car
The icing on the cake is not just the re-birth of pure telematics, but, it is another concept all together. It is the idea of bringing Internet to the car. I’m well aware that this is not something new or earth shattering, but it is something that did not work in the past decade because the automakers did not have a sustainable and intelligent business model to implement it. Now automakers are working with the web companies and are sure to integrate the car into the connected world. They are devising ways of connecting this technology intelligently and cost-effectively in the car. The premium automakers are working towards making telematics the core of the connected vehicle and are ensuring that the business model is robust and fool-proof this time around.

Why now? Are the automakers only able to provide the services now because of the new partnerships they have created? Maybe, but clearly the competition from the connected mobile devices has acted as a very powerful catalyst.

A challenging market
PNDs and smartphones are grabbing consumers’ fancy faster than quick-silver. Navigation systems seem to be on most people’s wish-lists. So much so there were rumors that some top PND retail outlets were sucked dry despite being well-stocked because of the pre-Christmas shopping frenzy that had descended upon major US cities.

The market for mobile navigation is highly challenging. In fact, venture capitalists and investment banks suggest the market is becoming more mature even as I write this. Companies say competition is cut-throat, prices are falling, which cuts into margins, and so services are the only way out. In fact even PND manufactures that are so heavily reliant on sales are aiming towards delivering their brand of navigation as a service product. As more devices have the capability to provide navigation, it will not be about the hardware but about the service and something that provides two-way communication and lends itself to the consumers’ lifestyle.

Even automakers are realising that it is 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 LBS through mobile devices is getting 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 Precksha@telematicsupdate.com