Reinventing the telematics service provider

While automakers dither about the best way to deliver content and services to the car, TSPs are licking their chops at the new opportunities.

Roger Lanctot of Strategy Analytics thinks OEMs run the risk of becoming mere pawns in a game controlled by carriers, handset makers, application developers, and service providers—all seeking to extract revenue from car owners. (For more from Strategy Analytics, see ‘Strategy Analytics: “Device integration is the big story”’.)

On the other hand, TSPs can help OEMs by doing all the heavy lifting—taking care of all the activities outside the car manufacturers’ core businesses.

And this is exactly where TSPs are looking to expand and reinvent themselves.

Not just for emergencies anymore

In the past, telematics service providers used to act only as call centers for emergency services.

Now, they are orchestrating data, services, and business relationships, acting as a concierge for OEMs as their cars evolve from simple transportation devices to nodes on a sophisticated communications network.

Even the role of emergency services coordinator is expanding due to the ability to merge information from a variety of sources, according to Gary Wallace, vice president of corporate relations for ATX Group, which powers the Mercedes Benz Tele Aid program in the United States and the BMW Assist program in the US and Western Europe

“With the integration of Cross Country’s roadside assistance network, we can initiate a total mobile emergency response process, notifying emergency medical responders, tow and service trucks and, with customer permission, their auto insurers, emergency contacts, and their dealership or rental car agency about a replacement vehicle,” Wallace says. (For more from Cross Country, see ‘Cross Country/ATX: Insurance telematics can “change the landscape of underwriting risk”’.)

“OEMs need to become more like the smartphone application vendors,” says Leo McCloskey, vice president of marketing and product management for Airbiquity, a provider of mobile software.

“An OEM putting out a package for its cars is unexciting. What’s better is having an open infrastructure that lets customers customize both from a scripted portfolio, the mobile phone and the cloud, all governed and assigned in consideration of the vehicle’s state.” (For more from Airbiquity, see ‘Airbiquity: “Consumers expect services tailored to them from their selected information sources”’.)

According to Wallace, the TSP should play a critical role in ensuring a seamless, multi-modal interface with both the vehicle and the vehicle owner.

“This requires expertise in Web portal development and maintenance, smartphone handset applications development, and interactive voice recognition and automated voice technologies development,” he says.

TSPs as middleware platforms

Whether apps are brought into the car via the consumer’s mobile device or beamed in via in-car connection, TSPs have a crucial role to play as middleware platforms.

“The most important role of the TSP is the need for someone to bring content, apps and the presentation layer together into one stream of information being processed in the vehicle,” says Greg Geiselhart, managing director and sales director for WirelessCar North America.

“All the different content providers involved need to be managed in some way or form.”

WirelessCar’s platform also monitors network performance, making sure that apps are working and that necessary information is flowing in from third parties.

(For more on WirelessCar’s platform, see ‘Three* Screen Strategy Highlighted at Telematics Detroit 2010’.)

Some OEMs plan to develop these competencies in-house.

But there’s a clear mismatch between automobile product development cycles and those in the consumer electronics industry.

Consumers most likely will expect the same kind of variety and freshness for in-car apps as they enjoy on their smartphones.

“If an auto manufacturer wants to have relevant services and content, it has to be on the leading edge of the whole product category,” says Erik Goldman, president of Hughes Telematics.

“That's a core competency that could be developed by OEMs, and some are thinking of that. Others have gone down that road and realized it’s a very different beast than producing cars.” (For more from Hughes Telematics, see ‘Hughes Telematics, Inc.: “Consumers will become more dependent on ‘always connected’”’.)

TSPs as a business development partners

Hughes developed a version of Mercedes’ mbrace telematics platform that connects the in-car navigation system with drivers’ iPhones.

Because of this, the new breed of TSP acts as a business development partner, consulting with OEMs on partnerships as well as on technology.

“No one can do all of this by themselves,” according to Martin Rosell, managing director of WirelessCar, which is owned by Volvo and also provides telematics services to BMW.

“We all have our unique competences. We are a TSP, but that doesn’t mean we do everything. We can bring the right partners together.”
Hughes sees this as an ongoing process. Says Goldman: “We meet constantly and have a robust product road map that extends into the next few years. In some cases, services require a capability to be built into the car at the factory.”
Adds Airbiquity’s McCloskey, “We work with OEMs by saying, ‘Here are services you might consider. Here are more things we can script and sculpt, including the HMI, services, and applications for each market segment.’ It’s an entirely different way of presenting cars to consumers.”

TSPs can also act as the billing and customer relationship hub for automakers.

That’s a role that Hughes has taken on for Mercedes, via a portal that allows customers to personalize the bundle of services they want for the car. (For more on personalization, see ‘How to customize telematics to meet consumer preferences’.)

Finally, it may fall to TSPs to manage all the customer data generated by in-car apps.

This kind of data can be extremely valuable to OEMs, allowing them to do everything from suggest a new app or service to an individual, monitor in real-time vehicle systems’ performance, or enable dealers to notify customers when it’s time for maintenance.

Says Wallace of ATX, “The TSP must be able to process the data generated by applications and services it manages for the OEM and deliver quantifiable results for the OEM, which leads to higher customer satisfaction and brand loyalty.”

 

If you're interested in this article you may find Telematics Munich 2010 of value.

Susan Kuchinskas is a regular contributor to TU.