European Telematics Market Expected to Reach 7.6 Billion in 2007

    SAN JOSE, Calif.--May 7, 2001--Wireless interactive technology is driving the European automotive market to new heights as key automakers battle for position.
    The weapon being used to gain a competitive advantage is telematics -- sophisticated technology that connects the consumer and enhances the driving experience.
    According to new analysis by Frost & Sullivan (www.transportation.frost.com), "European Automotive Telematics for Hardware and Services," this market earned $922.9 million in 2000 and is projected to reach $7.6 billion by 2007.
    "The market potential is unlimited," says Frost & Sullivan Industry Analyst Tif Awan. "Significant growth in the market will create valuable opportunities for all the companies in the telematics chain. However, there are also numerous challenges for market participants, principally unlocking the value of telematics for end-users in terms of desirable applications and services."
    Telematics is the convergence of the automotive, IT and telecom industries to forge an interactive exchange of data over a wireless communication network. The wireless providers deliver telecommunications connectivity, the IT industry contributes the network software and applications expertise and the automotive Tier 1 suppliers provide the necessary integration and in-vehicle systems.
    This study examines the main areas of the emerging automotive telematics market, hardware systems, applications and services. Hardware systems hold the biggest share of the market at this stage, generating 82 percent of revenues in 2000. However, Frost & Sullivan predicts this will drop to 42 percent in 2007 as the services sector begins to dominate the market.
    Awan believes automotive manufacturers could increase awareness of the telematics market as a whole by making on-board CD-based navigation systems more attractive to end-users. Frost & Sullivan predicts the current systems used to deliver safety and security applications and these navigation systems will converge into a single modular multifunction unit, called infotainment, with multimedia capabilities by 2004.
    "In order to release end-user value, companies have to unleash the commercial potential of the available and emerging technology," says Awan. "Any technology that does not create superior value for users has a limited future, a lesson that was learned from the development of the Internet. It is vital for automakers to begin generating greater awareness among their drivers. For the European automotive telematics market to yield its potential, the industry must move from a technology push to a market pull strategy."