Automotive telematics applications will influence most auto electronics, spawning
“an e-Vehicle wonderland” by 2004, and a wide variety of powerful players
will engage on the telematics battlefield, according to a new global study by
Roland Berger Strategy Consultants, a leading strategy consulting firm in the
industry.
The study predicted that automotive telematics subscribers in the United States
would grow from about 820,000 today to more than 11 million subscribers by 2004,
but noted that the perfection of the human/machine interface in vehicles is
crucial to that growth. It concluded that banking and shopping from the car
would account for the greatest share of applications, in addition to the obvious
voice communications use of mobile telephones.
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The new report, available in November 2000 from Roland Berger, is an outgrowth
of a previous Roland Berger study of the overall automotive electronics market
worldwide, released last February. “Our earlier study predicted that automotive
electronics applications would grow much faster than the automotive market generally.
That dramatic growth was — in effect — the first electronics revolution in
autos, and the surge in telematics is the second revolution,” says Michael
M. Heidingsfelder, partner and executive vice president of Roland Berger of
the company’s Detroit office.
“Now it’s becoming clear that telematics will lead the electronics systems
growth parade, and that consumer demand will drive the creation of an incredible
array of e-Vehicle features,” Mr. Heidingsfelder says.
“Our study shows that telematics will influence powertrain, chassis, safety,
security, infotainment and interface display systems. About the only systems
not touched by telematics will be body electronics (such as window lifters or
seat memory), and it’s not too great a leap to include many of those eventually.”
According to the global Roland Berger study, the e-Vehicle wonderland of tomorrow
will provide a broad range of services to the driver and passenger such as:
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By GlobalData- mobile office features like e-mail, Internet access and telephone
- mobile commerce features such as shopping and banking
- traffic and navigation information including dynamic navigation
- information services
- emergency and safety features such as remote diagnostics.
Audio, TV/video and computer games, and — down the road — intelligent driving
features such as braking by GPS (global positioning system), are candidate functions
as well. Telematics is a relatively new term unheard of until a year or so ago.
According to Roland Berger, it is a blending of the words telecommunications
and informatics, referring to the science of obtaining and transmitting information
and deriving from “Informatik,” the German word for computer science.
Recent transportation studies have established that average time spent in vehicles
— as both driver and passenger — totals some 540 hours per year in the United
States and 270 hours per year in Europe, representing (in the U.S.) some nine
percent of day-time available (compared with 40 percent at the workplace and
35 percent at home and 12 percent in shopping and recreation, not including
6 hours of sleep per day).
“So the logical consequence of this extensive in-vehicle dwelling time
is a high interest in mobile services,” says Mr. Heidingsfelder.
“That logic is strengthened by the trend toward the ubiquitous computer.
Clearly, many consumers want the same computing flexibility in their vehicles
that they already have in the office and at home, and this requires the intelligent
devices to be mobile. Shopping and working while driving saves time, and the
mobile office turns a journey into productive time,” Mr. Heidingsfelder says.
“That’s why the U.S. Big Three automakers as well as the European and
Japanese OEMs have made telematics development a major priority, with GM’s burgeoning
OnStar system, Ford’s RESCU and Wingcast and DaimlerChrysler’s Tele Aid. The
GM and Daimler systems are fixed in-vehicle installations for now, while the
Ford system uses a portable wireless handset, so the battle is on for the best
configuration,” he says.
All the systems feature navigation and emergency assistance, and promise escalating
levels of service and features in the years ahead. There are partnering agreements
with the likes of General Magic, AOL, Delphi, Motorola, Ericsson, Qualcomm,
Verizon, Sprint PCS, Yahoo and Sirius Satellite Radio.
“Each of the big auto companies is definitely focused on using telematics
applications for brand differentiation. GM already has attracted other users
to its OnStar system — Honda and Toyota as well as affiliates Suzuki, Isuzu
and Fiat,” says Heidingsfelder.
However, the size of the telematics market and its rate of growth will be strongly
affected by legislation and regulations affecting cell phone use in moving vehicles,
the study noted. By mid-2005, for example, estimates of the size of the U.S.
market range from about $3 billion up to $13.4 billion — depending on the effects
of legislative activity and industry self-regulation to reduce accidents caused
by distractions (today about 25 percent of crashes).
For example, in the United States, Federal safety regulators have launched
a major investigation into cell phone usage while driving. In Europe, 95 percent
of countries enforce hands-free use of cell phones, and in Portugal, drivers
are forbidden to use car phones at all while driving. In early October, Suffolk
County, N.Y., just minutes from New York City, banned talking on cell phones
in moving autos, with a fine of $150 for violators.
In order to protect the telematics market, the OEMs and suppliers must work
quickly to perfect the critical human-machine interface, according to Mr. Heidingsfelder.
That would include reducing the dwell time for use of in-car telematics functions
— such as suggested by proposed SAE standard J2364, under which completing
tasks would require no more than 15 seconds.
The target of the interface must be “hands on the wheel and eyes on the
road,” says Heidingsfelder. “Anything less will not be acceptable and
will not prevent the government from restricting the extensive usage of mobile
communication in vehicles.”
To enable the e-Vehicle and a “car portal” through which myriad features
will be available, the study says, four technologies must converge:
1. A sharp increase in bandwidth for mobile data communication (surpassing
2,000 kilobits per second with the UMTS protocol by the middle of the decade)
2. Maturity of systems for voice recognition and text-voice conversion
3. Smart human-machine-interface-logic to guide the driver quickly and efficiently
through the different menus and features
4. Global positioning system (GPS).
Also according to the Roland Berger study:
A central, integrated instrument panel will be developed that is customizable
like a computer screen and can display information according to the needs and
preferences of the driver.
Human factors and ergonomic design must be addressed, recognizing human physical
characteristics, capabilities and limitations, and achieving ease of use, comfort,
convenience, health and safety.
Artificial intelligence will come into play, moving the interface beyond specific
commands toward a more interactive relationship.
Key questions in the telematics arena — and so not finally answered — include
which interface system or combination of systems will be employed — such as
fixed installations, personal digital assistants (PDAs), and/or so-called mobile
phone/smart phone systems.
Further questions include who will supply information to the vehicle, at what
level, and by what network, and once information is onboard the vehicle, how
it will be shared by various systems — through multiplexing devices or through
wireless connectivity such as Bluetooth.
For automotive suppliers, the main competitors — as well as partners — are
the OEMs and the telecommunications companies, not to mention the content providers
because OEMs often ask for fully integrated systems, the study says. The right
partnering strategy is the key in telematics to be flexible and fast enough
to meet the OEMs’ and consumers’ demands and to utilize the strength of all
involved partners.
The OEMs’ objectives are to differentiate the brands, tap new sales potential
and safeguard and/or expand their customer base. OEMs, of course, own the vehicle
brand, have access to vehicle data, can integrate terminals in the vehicle at
the manufacturing plant, and have an existing sales and service network and
a large customer base already in place.
The telecommunications companies want to set up portals and set standards for
them, maximize new sales potential and penetrate target groups of new vehicle
buyers. They already have established portals and online customer relationships,
have a time and experience lead in portal concepts and likely have greater competence
in information technology and telecommunications.
But in addition to the OEMs, the Telcos, and traditional automotive suppliers,
a wide variety of other powerful players are in the fray, including PC manufacturers,
content and service providers, wireless equipment makers, PDA manufacturers,
entertainment systems producers, software providers and even new car dealers,
according to the study.
“The competition is moving ahead rapidly,” says Mr. Heidingsfelder, “and
OEMs and suppliers have to position themselves to profitably participate in
the telematics business since telematics affect all players in the automotive
arena. “With 30 offices in 21 countries, Roland Berger is the world’s leading
strategy consulting firm of European origin, providing strategy and implementation
support for clients in the automotive, aerospace, engineered products, consumer
goods, pharmaceutical, financial services, infocom and other industries. A world
leader in e-commerce consulting, Roland Berger works with blue chips and start-ups
to optimize their strategy, marketing, technology, operations and management
in the Internet economy.
