The rise of OEM solutions

The rise of OEM solutions

Consumers look for simple telematics solutions that offer ease of navigation and straightforward vehicle diagnostics. Machine-to-Machine (M2M) solutions in this sector are witnessing a rebound due to a surge of devices aimed at creating customer value. The telematics market has witnessed a shift from after-market vendors toward original equipment manufacturer (OEM) solutions from car manufacturers and device manufacturers, as consumers look for value-added services that deliver a superior driving and ownership experience. (For more on M2M, see ‘Telematics and M2M communications: The next step for the connected car’ and ‘M2M telematics: Turning the OEM development model on its head’.)

Traditionally, the only conversation between an OEM and its customers was the initial showroom exchange. The telematics market allows for an ongoing conversation between OEMs and their customers, which enables OEMs to understand customers’ needs and develop value-added services accordingly. Telematics offers car manufacturers the opportunity to promote brand awareness after-sale by becoming service providers. However, in opening a communications channel to its customers, manufacturers must be prepared to service and support this channel and respond to any arising consumer dissatisfaction and frustration associated with product performance.

OEMs as service providers

OEM telematics solutions, such as BMW’s ConnectedDrive, connect consumers to their vehicles through a range of mobility, including in-vehicle Internet access and remote diagnostics. BMW owners see BMW as the service provider, responsible for their connected Assist services. BMW manages all aspects of service delivery, technical support, subscription management, provisioning and more. The network operator behind this connection is invisible to the end user.

Mobile operators, for their part, must have the solutions in place that enable OEMs to become service providers. By partnering with M2M platform providers, operators and their customers can eliminate the business complexity associated with servicing new devices in real time. Strategic partnerships can ensure OEMs telematics offerings are equipped with the intelligence, provisioning, and support necessary to service the demanding consumer market. (For more on strategic partnerships, see ‘Why telematics firms need to work with wireless developers’.)

Harnessing the smartphone

Recent developments in this market have seen OEMs harness smartphones’ inbuilt connectivity. The integration of smartphones and smartphone applications in vehicles is a testament to the interest in consumer telematics markets. OEMs, telematics service providers, device manufacturers, and software developers are all rushing to take advantage of the automotive industry’s move into the smartphone application arena.

Consumers are familiar with concept of app stores and increasingly can be found to have more advanced applications in their pockets than those in-built into their vehicles. However, that is soon changing. More and more automotive OEMs offer a blended model, with some applications relying on the connectivity of the driver’s smartphone and some applications relying on the embedded modem found within the vehicle. The latter allows from a much deeper synergy between the vehicle on-board diagnostics and interfaces and the consumer application. (For more on apps, see ‘In-car telematics services: There’s an app for that’, ‘Telematics and in-car apps: Making infotainment cost-effective’, and ‘Telematics and Generation Y: Making the car an iPhone on wheels’.)

In March 2011, Ford Motor Company partnered with AT&T and Hyundai teamed up with Vodafone to pursue telematics opportunities. The My Ford Mobile smartphone app, which allows Ford Focus Electric vehicle owners to send and receive data about their car while away from it, highlights the opportunity for car manufacturers to connect consumers directly to their vehicles and is a positive example of the new innovative fashion of offering consumers simple interaction with their vehicles via tools already available to them. (For more on connected cars, see ‘Telematics and the socially networked car’ and ‘Telematics and the socially networked car, Part II’.)

The demand for apps

Device manufacturers have also been quick to take advantage of consumers’ prolific smartphone usage and the growing demand for applications. Garmin recently announced its Garmin Mechanic application, which offers consumers an accurate look at how their vehicle is performing. Though Garmin is offering the application free-of-charge, the company has paired it with its ecoRoute HD module to offer an advanced value-added service that offers diagnostics codes, real-time sensor data, fuel consumption, and an acceleration calculator direct to consumers’ handsets.

Aside from smartphone uptake, the key market driver in the European telematics market is European eCall. Mandatory pan-European eCall is currently being considered by the European Commission and could lead to all new vehicles being equipped with a GSM module and GPS or Galileo chipset. In the event of a serious car accident, the eCall system automatically dials 112 and calls the nearest emergency center. It thus informs the rescue services about the accident and transmits the exact location of the accident scene to them. The eCall Memorandum of Understanding (MoU) has been signed by 21 European countries and, if passed, could add billions to the European telematics market. (For more on eCall, see ‘Has eCall’s Moment Finally Arrived?’.)

eCall is testament to government regulations ability to shape telematics growth. The adoption of global standards throughout the industry will encourage wider adoption and lower development costs, contributing to the success of both the consumer and commercial telematics industries. OEMs are also beginning to set industry standards, with BMW’s Next Generation Telematics Protocol looking to establish a more stable and uniform interface infrastructure for delivering end-to-end telematics services, open to all telematics providers and vehicle manufacturers.

As automotive telematics gains momentum and the self-diagnosing vehicle becomes a reality, OEMs must ensure they stay ahead of the service providers, device manufacturers, and software developers all competing for revenue in this growing market. Through strategic partnerships, OEMs have the opportunity to drive innovation and service the rapidly changing needs of the industry.
Macario Namie is senior director, product marketing for Jasper Wireless.

For all the latest telematics trends, join the sector’s thought leaders at Telematics Detroit 2011 in Novi, MI on June 8 and 9.

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