Convenience factor drives uptake of in-vehicle telematics

Convenience factor drives uptake of in-vehicle telematics

The improved market prospects have encouraged technological advances in telematics, which can now help users to access various services by streaming large amounts of data into the vehicle through 3G or 4G networks.

With vehicle manufacturers introducing more applications requiring real-time data, telematics will assume greater importance in supporting the real-time wireless communication between the on-board device and the off-board server.

According to Frost & Sullivan research analyst Sathyanarayana K, automakers should have telematics as a standard feature in all their models because it uses real-time diagnostics and can save millions of dollars in warranty and recall costs.

"Automakers have to partner with wireless carriers and educate their GPS-equipped phone subscribers to use their phones in cars," says Sathyanarayana, although he adds that automakers and system suppliers could face issues of obsolescence and mismatch between vehicle and consumer electronics products. These problems could, however, be alleviated largely by developing a standards-based, flexible and open architecture platform to keep products relevant for a longer period.

Telematics service providers (TSPs) also need to expand their subscriber base to tide over the current lean phase.

For instance, OnStar has backtracked on its earlier decision to offer its services only to GM vehicles, and has decided to extend its telematics services to other automakers to expand its subscriber base and stay afloat in the market.

A wider subscriber base is vital, as most TSPs' operating costs remain fixed, which means their per-subscriber costs will increase if they lose subscribers.

"Other TSPs may increase the renewal rates to offset free (new) subscriber losses by offering everyday use services such as turn-by-turn navigation, real-time traffic as well as mobile and portable device integration," notes Sathyanarayana. "They are also considering replacing certain operator-driven services by automated services."

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