Thilo Koslowski, vice
president and Automotive Practice Leader of Gartner Inc.,
will give the keynote presentation at Telematics
Detroit this month. Event director Abbie
Badcock prompts him for a heads up on his chosen
topic: “ Enlightenment to mainstream – Telematics
The automotive and telematics industries are at a turning
point this year. Approximately seven years ago, we
developed the telematics hype cycle that outlined how the
telematics industry would evolve, and we predicted that around
now– 2007/2008 – the industry would finally
be at the point to make telematics work; understanding what
consumers really want , having a sufficient network of vendors
and developing the right solutions swiftly.
The automotive industry
is now embracing telematics more than they ever did in the
past. A realistic understanding of the needs in order
to turn telematics into something that makes sense for vehicle
manufacturers and consumers is what will drive telematics
: Has the time come when telematics is going to be
embraced by all?
Absolutely. Pretty much every vehicle manufacturer
is at least putting together a telematics strategy. How and
when it will be executed will be decided over the next couple
of months, but the majority of OEMs will have offerings by
2010/2012, and now is the time for automotive companies to
formulate their strategies, partnerships, and so on.
What recent developments
have you seen unfold?
The most recent developments have been focused primarily on
enabling consumers to put portable devices into vehicles.
This has increased overall acceptance of telematics and pushed
OEMs across the board to concentrate on these systems, both
for competitive reasons and in terms of product appeal. It's
increasingly important not just to provide a great car, but
also to offer the kind of features that will increase the
daily appeal of a vehicle to consumers, such as the ability
to use portable devices safely and easily in the vehicle.
Suppliers have also
been developing more competencies in this field, and that's
going to be the key success factor for telematics. In the
past, the big challenge for OEMs was developing the hardware,
the infrastructure, and putting together the resources in
order to make telematics work. That's a very expensive adventure,
and many of the early adopters gave up on telematics because
they didn't see how it could work for them.
We now have a more
sophisticated, more experienced infrastructure of suppliers
and providers, and it's becoming easier for automotive companies
to develop the right products to stay in the game and still
operate within a sustainable business model.
: What are the key trends that will become apparent
The most important trend will be strategic business
partnerships, with OEMs collaborating with other companies
on developing a full telematics offering, along with the flexibility
to enable OEMs to add more functionality and services to that
specific offering over time.
become more and more important. It's not about just
having to check off the telematics feature box on your product
spec sheet; it's much more important to develop specific functionality
and value that will set the product apart from its competitors
and add real value for the consumer. The point is that OEMs
should be looking for the right partners instead of doing
this work in-house.
: Do you think
that flexibility, functionality and empowering the consumer
are the most exciting areas for the industry?
I think these are some of the most important and exciting
areas of the industry but they're also some of the most challenging
because they've pushed the envelope for automotive companies
quite a bit.
Despite having gained
more experience in the area of telematics and vehicle-centric
information communication technology, OEMs are still automotive
companies at the end of the day. They produce cars;
they are not media or services companies.
And that's what will
present most of the challenges: successfully partnering
with different types of companies, understanding how the value
chain for delivering services will change, and deciding who
will share the benefits and revenues.
In addition to focusing
more on specific applications and services that offer value
and flexibility for the consumer, I think it's very important
for the industry to form new, innovative value chains that
provide customers with the feature set they're looking for
and fit into the automotive industry's existing business models.
There's a lot of creativity
required in this work, and whilst creativity is always exciting,
it's almost always a challenge to find the most effective
: Which global
regions do you think will develop their telematics services
We have to go back ten years to see changes based
on geographies. Europe and Japan were the first major regions
to actually push for telematics solutions. The US was
Now Japan is a very
different market in terms of consumer preferences and technology
offerings. Europe is probably closer to the US market now,
and, over the last couple of years, the US has become more
and more pro-active in pursuing telematics strategies.
A lot of the European
OEMs were reluctant to take on any risk in providing services
that might not have been successful. However, it's very difficult
for European automotive companies to have different strategies,
partnerships and suppliers for different geographic markets.
It makes more sense to consolidate partnerships and have a
common global strategy with a few subtle changes according
to local cultural differences, political requirements and
consumer needs. The automotive industry is beginning to move
closer towards this global view.
It's all about standardising,
and I believe that the US will become a thriving force in
the market, and will probably develop faster than some of
the other regions.
: In terms of consolidating partnerships, are you talking
about co-ordinating strategies in order to reach the global
market rather than just specific regions?
Absolutely. It's too costly for the automotive
industry to consider specific geography-based strategies,
especially when we're talking about emerging market opportunities
like telematics, which require investments and dedicated resources
to find and manage the right partners.
and service providers need to develop global offerings as
well so that it's easier for a specific manufacturer to select
one of these partners and then to collaborate with them.
: Possibly the most notable development outside the
vehicle is the mass deployment of GPS technologies. How will
this affect the automotive industry?
It had a significant impact, and it's one of the key
contributors for accelerating the telematics market.
The main reasons for
this are (a) consumers have become more exposed to those new
technologies, which is a good thing, and (b) it took the automotive
industry by surprise which resulted in a renewed focus on
the entire telematics topic.
didn't meet a lot of consumer demand initially, especially
in the U.S. , but now they're very much in demand, and the
automotive industry doesn't have to do a whole of lot of educational
work to help consumers understand how they can leverage a
navigation application in their daily life...
The challenge for the
automotive industry will be to choose: either partner with
companies that have the right technology and development resources,
greater visibility and a strong market presence for portable
navigation solutions; OR develop superior embedded solutions
that justify a high price premium.
: In the rapidly
changing telematics marketplace, which areas will be the most
There will be a variety of revenue opportunities throughout
the telematics value chain, although who will earn
how much has yet to be determined.
There are opportunities
for many companies to develop new revenue. For example,
vehicle manufacturers can generate revenues by offering a
media-hub solution for the car, that allows consumers to integrate
portable devices or stream multimedia content.
the automotive industry to look at a more holistic way of
spreading revenues.. Future service offerings must be delivered
as a package. One application in itself is difficult for consumers
to justify ongoing subscription fees in addition to paying
for the hardware. It will depend on how well these packages
are put together and how well they are marketed.
the automotive industry
will not be the sole beneficiary. Ultimately it will largely
depend on how well the automotive companies can co-operate
with the telematics technology developers, suppliers and service
providers to come up with what the consumer really wants.
This is an exciting
year for the automotive and telematics industries. This is
the year that telematics is becoming real .
Make the smart choice
and book your ticket today - spaces are going fast and we
may have a health and safety issue if we pack out the venue
quickly and painlessly online now or contact
us to secure your place.
The Telematics Update
Tel: +44 (0) 207
Toll free: 1800 814 3459
PS - For more information,
interviews, reviews, market predictions and more make sure
you sign up for Telematics Updates free
magazine and e-newsletters.