Some of today's luxury car owners may seem to possess an
uncanny sense of direction behind the wheel. But more
likely than not, their navigational prowess is traceable
to a small box hidden within the dashboards of their
cars. Inside, it contains a global positioning unit, a
cellular chipset, and a signal amplifier -- the guts
behind the next revolution of communications technology
The promise of telematics could usher in a future
reality that has been longingly anticipated in one form
or another since the dawn of AM radio. Today, the
Internet makes data time-sensitive in an unparalleled
way by offering infinite updatability. But very soon,
telematics -- which in the simplest sense is a marriage
of computing and mobile telecommunications -- will make
How? New technologies enabling automatic and precise
positioning of mobile phones, coupled with high
bandwidth networks and wireless device innovation,
promise to bring advanced, real-time navigation to end
users. All this will occur relative to the location of a
wireless user -- an unprecedented feat. Rather than
merely supplying the address and perhaps a general map
of one's desired address, for example, the technology
behind telematics will guide the user along the "best"
path to that address from their current location. The
implications of such technology on business, society,
and general culture are colossal.
Will it happen? To a large extent, it already has.
Consider the numbers corresponding to the expected boom
in the global wireless market segment alone -- from an
estimated $5.42 billion in 2002 to $40 billion in 2006.
Of this, the North American automotive telematics market
could rack up nearly a quarter of that $40 billion,
given double-digit growth.
All this is not lost on automotive OEMs, which are
embracing telematics in ways that far exceed their
incorporation of its technologies into luxury cars.
Indeed, telematics promises to change the fundamental
relationship between car companies and their customers
by offering greater levels of safety, security, and
remote interaction than ever before. That, they hope,
will build brand loyalty in equal degrees as drivers
gradually learn of, then utilize, then accept, and
ultimately demand this newfound technology. Not
surprisingly, more than 30 percent of all new vehicles
manufactured in 2005 -- not just luxury cars -- are
expected to have on-board navigation systems. And
location-based services will account for one-half of the
world's wireless subscribers and more than 70 percent of
global Internet users.
KNOWING THE WAY
No one can argue that wireless navigation is not an
essential component to the telematics value proposition.
Eyeing this fact as the tip of an iceberg, businesses
have sprung up in abundance during the past several
years to service the many facets of a market poised to
Comparisons between the wireless
communication/information technology paradigm and the
Internet are no mistake. In historic terms, today's
enormous investment in infrastructure for wireless
technology is roughly comparable to that which occurred
during the Internet's formative stages in 1993 and 1994.
Back then, no one could have reasonably predicted the
overwhelming degree of interest in the Internet or the
corresponding investments that were necessary to drive
further innovation in the medium. Today, experts see
this cycle repeating to a large degree as new
technologies are introduced weekly and venture capital
that currently sits on the sidelines increasingly flows
into the development of start-ups.
The current state of telematics sets up an interesting
paradox: In order for this revolutionary communications
technology to flourish as expected, companies must take
a down-to-earth approach in articulating the vast range
of its current and future possibilities to the average
Thus far, the buying public's familiarity with
telematics remains mostly limited to current onboard
navigation and remote vehicle diagnostic systems. From
mobile telephony and Internet access to a range of
location-based services, they yearn to know how
telematics will change the their everyday lives. For
them, technology exists that allows service providers to
offer optimized dynamic navigation on car equipment and
other supported devices. Specifically designed for the
automotive industry, this technology can act as a
virtual co-pilot to drivers by offering services such as
adjustable maps, choice of route, ranking of routes by
the quickest or least-expensive means, journey time
estimations, real-time traffic conditions, recalling of
previously saved directions and driver-controlled
customization of services.
The battle over standards is ongoing and presents no
clear frontrunner. Current versions of HTML, entitled
cHTML, or compact HyperText Markup Language, and the
Wireless Application Protocol (WAP), an open standard
platform that is endorsed by more than 500 wireless
industry players, each possess some advantages. But many
insiders predict that, in its present state, WAP must
evolve to overcome substantial drawbacks.
Developing wireless applications usually necessitates
the development of one application per supported device,
since significant variations exist in constructors'
implementation of the WAP standard.
To combat this, some companies are developing
technology that acts as a layer between applications and
clients. This technology essentially identifies the
terminal and gateway configuration launching requests to
a navigational platform and then dynamically generates
code on a request-per-request basis that is tailored to
the device and gateway.
Overall, telematics advocates are pushing hard for
standardization of systems. They point to projects such
as the collaborative Automotive Multimedia Interface
Collaboration (AMI-C), which could one day lead to the
design and implementation of open specifications for
systems that handle everything from wireless
communications to interactive games.
THE SURVEY SAYS...
So how does all this play out? Companies -- especially
automotive OEMs -- in the telematics arena might find
great comfort in current research that validates keen
consumer interest in telematics, despite its relative
infancy. According to a 2000 survey conducted by The
Strategis Group, 28 percent of respondents were "extremely"
or "very" interested in location-based services. Among
those same respondents, safety services aroused the
highest interest levels. More than 33 percent of
respondents were "extremely" or "very" interested in
each of the following services: "Panic Button --
Emergency Response Center," "Phone Finder," and "Emergency
In terms of information-based services, at least 18
percent of respondents were either "extremely" or "very"
interested in each of the following services:
Location-enhanced 411, "411 Plus" directions, and
customized traffic information.
Among total respondents, only 22 percent were not
interested at all in location-based services. The
overwhelming reason: Perceived lack of need.
AND THE WINNER IS...
Consumers aside, it has yet to be determined who will
come away the big winner. On one hand, automotive OEMs
will continue their strong push for telematics
technology that is embedded in the very fabric of their
products. But the telecom giants of today and tomorrow
won't sit idly by as that occurs. Rather, they are
positioning themselves as worldwide providers of
telematics in portable devices such as cellular phones
and PDAs. How this ultimately shakes out is anyone's
guess, although many predict an eventual collaboration
of some sort between the two sides.
Still, telematics is reality. Seldom, if ever, in
modern history has emerging technology been stymied for
long by the status quo. That's not likely to occur
within the realm of computing and wireless
communication, either. Like life itself, technology
seems to blossom once its roots take hold. Barring
catastrophe, exponential growth and innovation in
telematics will continue unabated. Companies that will
flourish in this new world, therefore, are those that
can meet several challenges.
First, they must thoroughly understand consumer
preferences to determine how best to respond to real
market needs. Sound decision making based on
well-researched data could lead to telematics being a "must
have" feature for the average vehicle owner.
Second, companies need to somehow stay ahead of the
research curve by evaluating and then quickly
integrating emerging technologies into new offerings.
Those that loiter risk losing out to more aggressive
competition, shifting consumer preferences, or even
nascent telematics technologies.
Third, corporate leaders must take the initiative to
implement sound, proactive changes to their companies'
business models to keep pace with macro shifts. They
must then clearly articulate their products, services
and vision to public and institutional audiences that
remain receptive to big ideas.
Perhaps most importantly, telematics technology must
be reliable, user friendly, and offer fundamental value
to consumers. If products work properly, if accessing
and retrieving data can occur painlessly, and services
prove useful to large segments of society, then the
telematics revolution will truly be realized.
Charles Nahas is general manager, North America at
is a worldwide provider of Internet-based wireless
navigation technology and services. The company offers a
full range of products designed to develop and launch
Internet-based wireless navigation and location-based
services and applications.
To The November 2001 Table Of Contents ]