Telematics Services Ramping Up

Good Telematics Overview From CommWeb.com: In-car systems may hold the key to wireless revenue growth - unfortunately for carriers, they have to share with the car companies. Telematics - the subsector of the wireless industry that deals with getting voice and data services into automobiles - is one of the hottest segments for deals and, potentially, for revenue.

In-car services have the potential to piggyback richer screen-based and location-based services than traditional handheld cellular. Systems can be more powerful, processor intensive, and graphical. They can present information on a scale that can't yet be matched with screen phones. This, in turn may present a better environment for targeted advertising, as well as subscription revenue. And paradoxically, services in cars can take advantage of the fact that the user is "captively mobile" - kids in the back seat, drivers in traffic, workers on the move. The potential is enormous.

But it's more than just potential, at least in the eyes of the automotive companies. Wingcast, for example, is a company founded by Ford and Qualcomm that's providing services to the automotive customer market. They've just made an arrangement with Verizon Wireless to deliver wireless voice and data when the Wingcast service launches next year.

The exclusive alliance with Verizon Wireless enables Wingcast to offer consumers a variety of voice-activated services, including emergency services, high-speed data, and location-based applications, which it will deliver over the Verizon Wireless network.

Wingcast's initial telematics service, including hands-free, high-speed data and voice services, will be available in certain Ford and Nissan vehicles. Under the agreement with Verizon Wireless, Wingcast will offer voice plans and service bundles exclusive to Wingcast customers.

In addition to wide network coverage, Wingcast is taking advantage of Verizon Wireless' use of digital CDMA technology to provide fast and reliable in-vehicle wireless services. In areas where the Verizon Wireless 1XRTT Express Network for data is available, Wingcast customers will have faster sustained data transmission speeds. This enables more reliable delivery of mainstream applications such as email and enterprise software, customized graphics packages, accessing company Intranet and external Internet services, commercially available information services, instant messaging, and streaming video.

"Our agreement with Wingcast provides Verizon Wireless with a whole new opportunity for incremental business in the increasingly important telematics arena," said John Stratton, Chief Marketing Officer for Verizon Wireless. "Our CDMA footprint will enable us to deliver the highest quality of voice and data services to Wingcast and its customers."

It's a reasonable supposition that over the long term, revenue per subscriber could be higher in telematics apps than in handheld wireless. (At least until the handset technology overcomes interface and screen barriers.) Telematics services are an easier sell than more dubious 3G handheld services, or WAP-based Internet browsing. For one thing, safety and security has long been a major selling point of GM's OnStar service, rather than connectivity. Packaged bundles of services that go beyond raw minutes of telephony usage will be a major attraction to customers in the next few years. In addition, the core technology can be built into the vehicle upon purchase, with the cost masked into the overall cost of the vehicle - bringing down the perceived cost to the user.

Safety and security is also the selling point for a suite of integrated voice/data services offered by WebTech Wireless and Airbiquity (under WebTech's brand). Their offerings will soon include the Quadrant System, an end-to-end vehicle location and telematics services system and the WebTech Locator, a vehicle-based wireless services gateway expected to include emergency roadside assistance, navigation, and automated crash notification for call centers and fleets.

They cite recent research from the Strategis Group that projected the private and for-hire Automated Vehicle Location market (AVL) to expand to over $1 billion in annual revenue by 2004.

That's just one subset of the larger telematics market, albeit one that's very attractive to businesses (especially in the transportation sector, where fleet management and shipment productivity are key profit drivers).

One estimate has telematics as a whole generating $42 billion by 2010; OnStar alone is reported to be in nearly two million vehicles.