Consumer Telematics Remains Bright for Providers Offering Flexible Solutions

(Business News & Technology News, 14 Jul 2008)

Despite the automotive industry being severely hit by economic downturn and high fuel prices, the consumer telematics industry continues to see healthy levels of innovation, with BMW and Chrysler leading the way; both plan to bring Internet access or Wi-Fi connectivity to cars in the United States this year.

"While safety and infotainment remain the cornerstones of consumer telematics offerings, the current global economic climate may shift the focus of many telematics service providers," says Dominique Bonte, ABI Research principal analyst. "Applications that contribute to cost savings will become more important in the future."

The most obvious cost-savings application candidate is fuel consumption monitoring and reporting. Nissan's award-winning Eco-drive service, which allows drivers to track individual fuel consumption trends and driving behavior while also comparing fuel-efficiency rankings among CARWINGS members, may well be copied by other telematics providers around the world. Similarly, telematics insurance applications are becoming more popular as they allow drivers to reduce their premiums by up to 30 percent.

Meanwhile casualties are occurring, with the recent dramatic decision by Norwich Union to pull the plug on its Pay As You Drive insurance offering. The company seems to have fallen victim to the inflexibility of its single-application solution designed for one, which, ironically, may have a bright future ahead; and a similar fate may await the European eCall project as well. It is precisely the versatility of consumer telematics enabling it to respond to changing circumstances that should be its major strength.

"Fortunately, several players are starting to understand that flexible solutions can only be achieved through the adoption of global standards and cooperation among all players in the value chain, with the added incentive of possible cost reductions," continues Bonte. Wind River Systems and Intel recently announced the creation of an open-source Linux platform for automotive infotainment applications guaranteeing hardware and software interoperability. ATX Group's dot.car initiative similarly aims at setting global requirements and standards for safe in-vehicle Web browsing while also providing a framework for easy customization.

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