Telematics and M2M communications: The next step for the connected car

Telematics and M2M communications: The next step for the connected car

Parking is a perplexing problem for cities.
Parking meters are a huge source of revenue, as are fines, but merchants complain that over-eager enforcement hurts their businesses.
Meanwhile, people seeking entertainment or shopping often avoid downtown in favor of suburban shopping centers.
San Francisco, Denver, and Los Angeles are three cities partnering with T-Mobile for a telematics solution that aims to solve this dilemma.
The parking management systems use sensors, new meters, and real-time parking data to track where parking is available at meters and city-owned lots.
Sensor data is uploaded wirelessly via T-Mobile to the system’s data feed, which makes the information available to the public via websites, street signs, and smart phone applications.
The system adjusts meter prices based on demand, with the goal of having on average at least one parking space available on every block.
“Cities are seeing as much as a 40 percent increase in parking revenue,” says John Horn, T-Mobile’s national machine-to-machine communications director.
“That’s pretty significant.”

Growth in M2M connections

The T-Mobile project is a classic example of machine-to-machine (M2M) communications, in which two pieces of hardware automatically communicate without human intervention.
Increasingly, fleet and passenger autos will become part of M2M networks.
T-Mobile is making a big play in all kinds of M2M networks, including those used for telematics, connected energy, and telemedicine.
“We’re embedding T-Mobile SIMs into anything you can imagine,” Horn says.
It’s a sharp play.
Research firm Analysys Mason expects the total worldwide M2M device connections in the automotive and transport sector to increase from an estimated 21.6 million in 2010 to 276.5 million in 2020.
While in 2010, 88 percent of the connections were commercial, such as fleet tracking, by 2020 only 51 percent of the connections will be commercial.
“This is a big change over 10 years,” notes Analysys Mason analyst Steve Hilton.
In Europe alone, Berg Insight estimates total shipments of car telematics systems will grow at a compound annual growth rate of 35 percent this year, reaching 1.6 million units in the European Union in 2011.
It forecasts the number of active telematics service subscribers to reach 5.4 million this year.

New partner ecosystems

For the smart parking meters, T-Mobile worked with IPS Group, an engineering and manufacturing company focused on parking, and Wyless Group, an M2M managed services provider.
The initiative illustrates the new kinds of partners and competencies that will be necessary to expand automotive telematics.
“It’s never a technical problem,” says Hilton.
“These techie engineers can create anything. This is always about the business model.” (For more on business models for in-car apps, see ‘Telematics and connectivity: Which comes first, the app or the money?’)
Hilton points out that the current automotive supply chain is complicated, and it will get more so as more new kinds of technology are installed in cars.
Horn says that T-Mobile takes a consultative approach to try to make it easy for developers to get into the wireless market.
(For more on the applications market, see 'In-car telematics services: There’s an app for that' and ‘Why telematics firms need to work with wireless developers’.)
“We have aggregation partners we work with in tandem to fill in missing pieces,” he says.
“If they have 5,000 or 50,000 devices to connect, we’ll help them get to market.”
Mary Cronin, professor of information systems in the Carroll School of Management at Boston College, agrees that there are no technological barriers to new kinds of M2M services in vehicles.
“The car is an amazingly sophisticated and highly automated, highly computerized object today,” says Cronin, author of Smart Products, Smarter Services: Strategies for Embedded Control.
“The networks inside the car are designed to facilitate instantaneous transmission of data. It does have a lot of potential, but aside from keeping you safe as a driver and entertaining your passengers better, there aren’t many compelling offers being made to drivers today that leverage that capability.”
Unless you happen to be looking for a parking space in San Francisco.

Susan Kuchinskas is a regular contributor to TU.

For all the latest trends in telematics, join the industry’s key players at Telematics Detroit 2011.

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