Q&A: Providing local telematics services from a global platform

Q&A: Providing local telematics services from a global platform

Michael Reali has had a hand in sales and business development for the navigation market for close to 20 years, with a background in GIS Database and software development for the energy market before moving into geographic content.

As senior vice president of automotive OEM for NNG, he leads the overall planning and execution of the automotive business, including product and sales strategies. In this role, he was responsible for the successful entry of the company and its iGO Navigation into the auto telematics sector. Now, he's playing a key role in defining the technology developments needed to offer the most suitable product range in this challenging market.

Reali talks to TU contributor Susan Kuchinskas about how NNG manages the business, technical and legal challenges of providing local telematics services from a global platform.

How does NNG differentiate its iGO Navigation solutions from others in the market?

We're different from competitors in the space because we're totally white label. Sometimes that's positive, and sometimes that's a negative differentiator. In some solutions, OEMs have seen a benefit in having a co-branded solution in the dash. I think that’s going away, because the OEM brand is stronger. As you see more and more integration and applications on handsets, they want that brand to go with them as well. It's not a TomTom or TeleNav application that might connect to the car; it's a Toyota app that is on the handset that communicates to the Toyota solution that's in the car. (For more on apps, see Industry insight: Telematics and apps.)

You recently announced an agreement with Vodafone to deliver a fully connected navigation solution. What is the go-to-market strategy?

Right now, there's not a lot of co-selling; it's really us. In order for us to succeed, we need multiple tiers. When we go in to talk to a tier 1 customer about building a platform that they can talk to an OEM about, we can go in with multiple connectivity options, whether it's a phone, a 3G dongle or an embedded SIM.  With the embedded SIM, it opens up more opportunity for other services. (For more on SIMs, see Q&A: Telematics and the evolution of the SIM card.)

NNG sources content from 30 map providers globally and almost 50 other content providers. How do you manage that, both from a business process perspective and from the service delivery perspective?

It is a differentiator for us. Since we have a technology that can be global, we need to a have global offering. When we talk to OEMs about a global solution in China or Korea, they realize they don’t' have to have three different technology platforms. They can go with one. The reason we work with so many people is that we need to be local. Many of those are local map providers with content that is locally valuable and specific to that population. For example, in Malaysia and Indonesia, there are community-based maps that are of higher quality than anything that Nokia can bring out. Where the local market is saying, ‘I want this because it's the best thing that's out there,’ we will develop the relationship and a compiler.  

We have a business affairs group that handles business relationships with providers. That's the most challenging up front. An ongoing cost for us is that we have to compile those maps from all those providers on a regular basis. We have a process where, once we have built a compiler for that format, as long as the provider doesn't change it, becomes more of a programmatic process. We spend anywhere from 3 to 5 percent of costs compiling content. It is a significant cost, but in a few years, as our business increases, as a percentage it will be much lower.

What does NNG see for connectivity in the near future?

With all the projections of smartphone penetration out there and some stability of the Android platform—although it's still nowhere near the stability of iOS—I see the smartphone and some way of connecting it, whether through a cord or through a transparent connection, that will be the largest share of the market. That creates a lot of opportunity to do it a little bit better. (For more on smartphones, see Q&A: Telematics, infotainment and the future of the smartphone.)

We are focused on onboard navigation versus offboard navigation. We don't have an offboard solution and are not moving in that direction. We don't want to build something that competes directly with Google Maps, Apple or TeleNav. We also see value in having content in the device and not depending on connectivity from wireless providers, from the perspectives of quality, stability and consistency.

We're moving into the space of companion applications that are on the phone and onboard in the dash. What is the most valuable integration between those two and the type of information that comes across? It should be as simple as, when they get in the car, something in the head unit says, ‘You have new content available in your phone. Do you want to bring it into the car?’ We are working with content providers, and we're close to offering this at a price point where a consumer doesn't think too much about the cost. A lot of people are missing opportunities because they're shooting for the sky.

Susan Kuchinskas is a regular contributor to TU.

For more on in-car content, see Industry insight: Telematics and apps.

Coming up in 2013: Consumer Telematics Show 2013 on January 7 in Las Vegas, V2X for Auto Safety and Mobility Europe 2013 on February 19-20 in Frankfurt, Telematics for Fleet Management Europe 2013 on March 19-20 in Amsterdam, Insurance Telematics Europe 2013 on May 8-9 in London and Telematics India and South Asia 2013 on June 5-7 in India.

For exclusive telematics business analysis and insight, check out TU’s reports on In-Vehicle Smartphone Integration Report, Human Machine Interface Technologies and Smart Vehicle Technology: The Future of Insurance Telematics.

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