ABI: Future of Consumer Telematics Remains Bright for Providers Offering Flexible Solutions
August 5, 2008 // Published as a news service by IHS
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Despite the automotive industry being severely impacted 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.
According to ABI Research, both companies plan to bring Internet access or Wi-Fi (IEEE 802.11x) connectivity to cars in the U.S. 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," said ABI Research principal analyst Dominique Bonte.
"Applications that contribute to cost savings will become more important in the future."
The most obvious cost-savings application is fuel-consumption monitoring and reporting, analysts said.
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 Nissan 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%.
Yet, not every application is successful. An example of this is the decision by Norwich Union to pull the plug on its "Pay As You Drive" insurance offering. Analysts said 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. 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, analysts said.
"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," Bonte said.
Wind River Systems and Intel recently announced the creation of an open-source Linux platform for automotive infotainment applications guaranteeing hardware and software interoperability. Analysts said 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.
Source: ABI Research.