Wireless Carriers Now Joining The Commercial Telematics Bandwagon, Says ABI

OYSTER BAY, N.Y.--Feb. 2, 20043, 2004--A new crop of sophisticated, location-enabled wireless handsets is helping wireless carriers to integrate themselves deeper into the commercial telematics value chain, finds technology research firm ABI.

Because of relatively high costs for embedded telematics hardware, the barriers of entry are still too high for most of the smaller fleet operators. As a result, many commercial telematics vendors have had difficulty reaching this substantial, yet virtually untapped market with a potential of $7 billion by 2010.

"Wireless carriers are uniquely positioned to address a specific niche in commercial telematics," states Frank Viquez, ABI's Director of Automotive Research. "By fully leveraging its pre-existing relationships with hardware and software partners, a wireless carrier can tap into its subscriber base and target particular commercial customers who previously wouldn't have been able to consider a telematics solution."

ABI identifies Nextel Communications as the first and best positioned North American carrier to offer a handset-based commercial telematics solution. Nextel's 13 million subscribers are predominantly business users who spend nearly a third more on their phone bills than the average consumer subscriber. With one of the lowest churn rates in the industry and access to Motorola's new line of GPS-enabled iDEN phones, Nextel has been able to further delineate itself from other wireless carriers.

ABI cautions that a handset-based offering will not be a one-size-fits-all solution for fleet operators. Handsets will never replace embedded telematics hardware that can provide critical cargo and vehicle status information. However, they do promise to fill an inherent need for low-cost devices that can provide simple location and dispatch/status information bundled on top of low-cost voice and data services.

These findings are from ABI's Fleet Management Systems Intelligence Service, which specifically covers the global commercial telematics markets. The service examines market-driving applications and technologies, and provides projections for commercial global telematics equipment shipments and revenues. An analysis of key market participants is also provided. ABI offers quarterly research services on all the major global telematics segments in the OEM, aftermarket, consumer, and commercial markets.

ABI is a N.Y.-based technology market research firm founded in 1990. ABI publishes market research and technology intelligence on the wireless, automotive, electronics, broadband and energy industries. Details can be found on the web at abiresearch.com or by calling 516-624-3113.