Lower Prices and Greater Awareness Can Put Telematics Back on Track to Being the `Next Big Thing'

PALO ALTO, Calif.--April 7, 2004--The high price of telematics has led to its low adoption and renewal rates, translating into slow market development, contrary to earlier expectations. Decreases in both hardware and service prices are needed for this market to achieve desired growth.

New analysis from Frost & Sullivan (http://www.transportation.frost.com), "North American Passenger Vehicle Telematics and Remote Vehicle Diagnostics Market," reveals that revenue in this market totaled $1.23 billion in 2003, and is projected to reach $2.62 billion by 2010.

If you are interested in a virtual brochure, which provides manufacturers, end-users and other industry participants an overview of the latest analysis of the "North American Passenger Vehicle Telematics and Remote Vehicle Diagnostics Market," send an e-mail to Danielle White, Transportation Corporate Communications, at dwhite@frost.com with the following information: your full name, company name, title, telephone number, fax number and e-mail. Upon receipt of the above information, an overview will be sent to you via e-mail.

"Greater integration of hardware and economies of scale due to increasing production volumes can bring about a downward trend in hardware prices," says Frost & Sullivan senior industry analyst Joerg Dittmer.

However, economies of scale are harder to realize in a service industry, such as response center operations. As a result, subscription fees have crept up in recent years. Automation of services through speech-recognition and text-to-speech technologies, however, is expected to allow some reduction in subscription fees after 2006.

Decreasing hardware prices at both the manufacturer and retailer levels would help the market move closer to fulfilling its potential. Though telematics was anticipated to see phenomenal consumer demand, providing steady revenues for automakers and other industry participants, its market did not take off as expected.

The growth it did experience was due to automakers that took the initiative to equip their vehicles with telematics and offer free introductory service. This, however, left the industry unsure about whether its customers were automakers or vehicle owners.

"A clear focus on this issue would assist market growth because it would provide guidance about the nature of products and services that should be offered," says Dittmer.

Another step that can contribute to market growth is creating awareness among vehicle dealers and salespersons. These are the people in a position to educate consumers on the benefits and usage of telematics, thus encouraging higher adoption and renewal rates.

Additionally, establishing standards to ease interoperability of devices, offering flexible and value-added service suites, possibly including dynamic routing and remote vehicle diagnostics (RVD), can help telematics to evolve from a "nice to have" to a "must have" feature.

"These emerging trends and lower insurance rates for telematics-enabled vehicles can also provide the telematics industry with the critical mass required to stand on its own," concludes Dittmer.

The "North American Passenger Vehicle Telematics and Remote Vehicle Diagnostics Market," a part of the World Automotive Telematics and Infotainment and North American Advanced Automotive Technologies subscriptions, provides in-depth forecasts, discusses industry challenges, and describes the drivers and restraints of the telematics market. Hardware, services, remote vehicle diagnostics and cellular airtime sectors are researched in detail, and comprehensive information is provided. Executive summaries and interviews are available to the press.

Frost & Sullivan, an international growth consultancy, has been supporting clients' expansion for more than four decades. Our market expertise covers a broad spectrum of industries, while our portfolio of advisory competencies includes custom strategic consulting, market intelligence and management training. Our mission is to forge partnerships with our clients' management teams to deliver market insights and to create value and drive growth through innovative approaches. Frost & Sullivan's network of consultants, industry experts, corporate trainers and support staff spans the globe with offices in every major country.

"North American Passenger Vehicle Telematics and Remote Vehicle Diagnostics Market"