When you extrapolate from current trends in wireless, and try to look past the hype of potential next-generation services, one helpful thing to remember is that social behavior pushes technology, and not the other way around. When people have a choice of available tools and services, they're going to choose the ones that adapt best to what they like to do, rather than change their behavior to fit the tool.
In the context, let's note that Americans spend an awful lot of time in their cars. Hence, telematics.
Telematics is the term used to describe data-capable wireless communications in cars. Under that heading we can include a wide variety of different types of services - from the specific auto-related help systems like OnStar to GPS-based locators and true cellular services that provide traffic info, email and other data useful to people on the move. Or stuck in place with time on their hands.
In an article in Computer Telephony, editors John Jainschigg and Richard Grigonis argue forcefully that telematics are going to be one of the key drivers (pun intended) in pushing m-commerce to the next stage. Some of the barriers to m-commerce, according to their formulation, have been:
- a combination of "social inertias,"
- price-point sensitivities,
- and user interface/application engineering issues.
All of these elements have a different set of variables when applied to telematics - automotive wireless - than traditional wireless.
Take the user interface issue. Already we are moving rapidly to a voice-dialing and hands-free environment in automotive wireless. Speech recognition will become the predominant mode of interaction between a driver and a wireless service or application. And rather than use an IVR-like interface (with a series of numbered prompts and branching-tree options), telematic services are going to migrate rather quickly (I predict) to become more "barge-in"-based and truly interactive. They will also become more location sensitive, with applications tying into the car's GPS systems to provide a truly context-aware interaction.
Price point sensitivities also play out against a different backdrop. The car was the scene of much early adoption in basic cellular, with phones in cars seen as both a status symbol and an emergency backup (and a productivity tool for business people stuck in traffic). In the same vein, value-added revenue generating services (which carriers are dying to supply) appeal to the driver market which sees time spent in a car as lost time. When an application can be shown to enhance the user's productivity (and not just be amusing or entertaining), price sensitivity will probably be less of an issue.
A recent study by Frost and Sullivan looked at the European segment of the telematics industry and valued the market there for systems and services at 1.03 billion Euros in 2000, growing steadily until 2004 when most volume automakers will launch affordable telematics systems across the range, accelerating growth and propelling revenues to a staggering 8.55 billion Euros in 2007.
Wireless players aim to deliver telecommunications connectivity through GSM and ultimately the promise of 3G. The IT players contribute the all important network software and applications expertise. The traditional automotive suppliers have the in-vehicle systems and the ability to integrate it all. But it is the automakers, which have the vehicle for delivering telematics services and the end-user, who have the potential to gain the most.
Hardware systems hold the biggest share of the market at this stage, bringing in around 82% of revenues in 2000. However, F&S predicts this will drop to 42% in 2007 as services take over the dominant position.
Automotive analyst Tif Awan says that "significant growth in the market should create valuable opportunities for all the companies in the telematics value chain. However, there are also numerous challenges for players principally unlocking the value of telematics for end-users in terms of desirable applications and services."
"For example, the safety and security applications favored by US consumers do not appear to have gone down well in Europe where the navigation applications seem to have a higher value proposition."
Frost & Sullivan predicts the current systems used to deliver safety and security applications and these navigation systems will converge into a single modular multifunction unit with multimedia capabilities by 2004.
"In order to release end-user value companies have to unleash the commercial potential of the available and emerging technology," Awan says. "Any technology that does not create superior value for users has a limited future. This is a lesson that was learned from the development of Internet. It is also vital for companies to begin generating greater awareness among drivers."
One reader responds to this article:
The article is headed in the right direction but I think you need to include a reality check.
1) Who is going to win the race as to the technology that can deliver messages to vehicles speeding along at 120 mph (required standard)? Will G-3 or G-4 really be able to stream video at these speeds to vehicles traveling at 60 mph in multiple lanes travelling in opposite directions sometimes less than 10 feet apart? This pinpointing requires millisecond bursts in coded packet form that need to be reassembled after transmission. I'm not saying it can't be done, but even the wizards are having difficulty. In a competitive environment like that of the USA there's bound to be plenty of false claims, false starts, and ultimately a winning technology (yet not necessarily the best technology). This battle is worth analyzing before any predictions are made about telematics.
2) What role will roadside infrastructure play? As you note the American public has shown a willingness to pay for connectivity in the cost of the vehicle (OnStar). However the advertising and sales industry people are chomping at the bit to be able to deliver content to the daily commuter. One method is through the 5.9GHz frequency that the FCC has issued for "transportation data transmission." As short range roadside infrastructure proliferates the need for wide-area broadcast will be minimized (wide-area via fiber to road side to vehicle).
3) The need for a auto industry standard is glaring. However the auto manufacturers are gearing up to be the producer and installer of telematic products on their cars, therefore they will fight to retain propietetary control of the on-board equipment. The manufacturers want a piece of the monthly service fee the public is willing to pay for real time and on-demand communications. OnStar was not a strategic safety device; it is a strategic recurrent expense and steady revenue stream.
--Bill Barlow, bill.barlow@commtrans.org.
