Automotive Industry Trends
April 2005
The Expanding Use of Telematics
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Telematics — the emergent technology that will turn vehicles into mobile nexus points of communication, information, and entertainment — is taking its next great leap forward.
In the opening stages of its development, Telematics was limited to safety, security, and navigation. It was first made possible during a confluence of events in the 1980s. In those years, the wireless age dawned, the U.S. Department of Defense approved the Global Positioning System (GPS) for civilian use, and the Internet became the most extensive superhighway in the world.
By the mid-1990s, car manufacturers had found a way to capitalize on those developments. The first applications of Telematics were fleet-vehicle locators for trucking companies and optional emergency-response systems for luxury car brands such as Cadillac and Mercedes. Over the last decade, this mode of Telematics has grown in fits and starts, with some early services, like Ford’s Wingcast, being scrapped and others becoming standard equipment, like DaimlerChrysler’s Tele-Aid. With thousands of service requests logged in its call center every day, OnStar, an emergency-service subsidiary of General Motors, is an example of today’s robust Telematics.
Telematics works through an embedded “brain” called the Telematics Communications Unit, or TCU, the central platform of the system. All of the other technologies are deeply integrated into it. When a driver’s car breaks down in the middle of the Arizona desert, she pushes a button on her dashboard, sending a signal to the TCU. In turn, the TCU uses a cellular connection to contact the service provider’s call center, and in moments, help is on the way. Another driver can summon help from his service provider, who can pinpoint his location by communicating with the car’s GPS receiver. Using signals from one of the 24 satellites that orbit the Earth for triangulation, the receiver accurately calculates its own longitude, latitude, and altitude. The service provider then directs the driver to his destination.
The next hot trend for Telematics is complete integration of entertainment into society’s increasingly mobile existence. Drivers will control a cluster of entertainment devices, including satellite radio, wireless Internet, a PDA interface, music from CDs or MP3 players, and high-quality video data. Passengers in the back seat will choose from an array of possibilities—films on DVDs, music, and integrated video games with additional data downloaded through the onboard wireless Internet connection. Whether in preproduction or for the aftermarket, the enthusiasm of consumers for in-vehicle entertainment seems boundless.
Industry analysts have pulled back a bit from their previously sunny forecasts for safety-and-security Telematics systems. Consumers are willing to pay for these services at a fairly low price point. However, America’s road-savvy drivers seem eager to pay for services, options, and aftermarket devices when they can see and feel an immediate benefit—an enhancement for their mobile lifestyle. They crave newer and better systems to make their cars as useful as their offices and as entertaining as their living rooms. This is the force that will propel Telematics forward into the future.