Telematics Industry Shakeout Predicted by ATX Technologies' Steve Millstein

SAN DIEGO, Nov. 6 -- Steve Millstein, president and CEO of ATX Technologies, Inc., the leading independent telematics service provider to the automotive industry, today predicted a shakeout in the telematics industry to occur in the coming year. In a keynote address at the EyeforAuto Telematics West conference, Millstein said he remains as optimistic as ever about the prospects of the industry, but serious players in the telematics market ``will need to understand vRM and how to package telematics to sell cars and service, and retain customers.''

``Gone are the days of hyping backseat $30-a-month services. Front-seat and under-the-hood services, vRM, will be the focus in 2002,'' Millstein said in his keynote address.

Millstein emphasized that providing enhanced vehicle safety through telematics is what draws consumers to the technology; interactive services that have only recently been launched such as real-time traffic, remote diagnostics, and routing assistance will be what retains them; and vRM is what generates value to the OEMs and dealers.

While much of the telematics industry has been obsessed with wireless data services and mobile computing, Millstein said ATX has been focusing on the development of vRM, an infrastructure designed specifically to use telematics capabilities to drive business back to both the OEM and their dealerships.

Millstein emphasized that telematics services must be vehicle-centric to provide perceived value to motorists and to justify OEMs' investments in telematics hardware. ``As I stated in May at the EyeforAuto conference in Detroit, the telematics market has been over-heated. Much like the days when everyone put an 'e' in front of the company name and a 'dot.com' behind it, several companies have jumped into the telematics industry looking for quick revenue. The fact of the matter is when it comes to actual customers, there is General Motors OnStar and there is ATX. In the five years we've been in the telematics industry, ATX has learned that telematics is all about customer satisfaction and customer loyalty, not creating a new business line or a mobile commerce portal.''

Millstein predicted that the shakeout will primarily threaten those who believe telematics can be offered as an optional feature and those who still believe that an OEM can generate a new revenue stream by charging for data that can be obtained from an America Online or a wireless carrier.

ATX has positioned itself in the market by emphasizing its independence from OEM ownership, primarily due to its firm belief that telematics is about vRM -- extracting data from the car and the driver and, in turn, generating more customer ``touchpoints'' for the OEM and its dealers.

ATX integrates wireless communications, database functions, and location- identification technologies to provide a complete line of telematics services, such as emergency response, roadside assistance, automatic collision notification, locating critical services, stolen vehicle tracking, convenience services such as routing assistance and navigation, and more. ATX is also developing convenience services such as voice interactive real-time traffic, routing assistance, and Web-based information provision.

ATX serves nearly 300,000 subscribers through its customers' brands, including Mercedes-Benz, BMW, Jaguar, Lincoln, and the Infiniti division of Nissan.

ATX Technologies, Inc. is headquartered in Dallas-Fort Worth. ATX provides leading-edge telematics services for mobile applications including automatic collision notification, location-based emergency response and roadside assistance, stolen vehicle tracking, navigation and other location- based information services. The company pioneered in-vehicle and automotive aftermarket applications of telematics beginning in 1995. ATX customers include Mercedes-Benz, BMW, Nissan Motor Corporation's Infiniti division, Jaguar, and Lincoln-Mercury. Strategic alliances include Siebel Systems and IBM.