Detailed system and semiconductor demand analysis for in-vehicle infotainment, telematics and vehicle-device connectivity features.

May 10, 2010 17:05 rlanctot
OnStar is expected to bring out a mirror-mounted telematics device for the retail automotive aftermarket sometime early in 2011. The move is part of a broader strategy to take OnStar beyond the shelter of parent General Motors to tap into the wider market potential of safety and security and to finally and safely integrate entertainment technology with the telematics solution. General Motors’ OnStar division has yet to officially acknowledge its plans for an aftermarket product introduction in 2011, but the company has come close to affirming their existence with a report on that the company will “extend the OnStar business even beyond automotive.” The statement comes in the context of an announcement of a relaunch of OnStar before the end of 2010. As part of that relaunch new OnStar president Chris Preuss has been spreading the word that OnStar is looking to hire 30 or more engineers and developers to drive the revamp of the 14-year-old system. OnStar has declined to comment on any aftermarket plans. Preuss has moved quickly to put his imprint on the brand. Preuss arrived at OnStar with a long pedigree within GM as a senior communications executive both in the U.S. and Europe and has joined the broader effort within the company to project the brand into the world of social networking and closer connections with customers. For at least the past two months, GM has been building a team intended to bring an aftermarket OnStar product to the world of “big box” retail epitomized by Best Buy and others in the U.S. According to industry sources, the original plan was to launch before the end of 2010, but it now looks like a 2011 time frame is more likely. But OnStar’s plans likely do not end there. The reason for the aftermarket launch, and a potential move beyond automotive opportunities, is the potential crisis foretold by declining sales volumes for GM vehicles which are packaged with OnStar as a standard feature. Vehicle sales for GM are in the midst of a three-year swoon (down 21% in 2008, down 32% in 2009, flat in 2010) based on JD Power estimates. Assuming unchanged subscriber renewal and retention rates, the OnStar subscriber base – long reported to be 5.5M – is likely in the midst of a precipitous decline and in sore need of shoring up from other sources of subscribers. OnStar currently offers its services free for one year on most GM models, and then at subscription rates of about $20 to $30 a month, depending on the level of service, or $200 to $300 a year. Those numbers translate to more than $1B in revenue. OnStar’s new president claims a better than 50% retention rate among new car buyers – though the overall renewal rate is likely lower. Even if OnStar is maintaining a 50% retention rate, the diminished vehicle sales volumes are undermining GM’s ability to replace subscribers lost to attrition. Under these circumstances, maintaining the 5.5M subscriber base will be a challenge. OnStar executives privately aver that the division is and continues to be profitable, but a significant decline in subscribers is putting that profitability in jeopardy. Further, OnStar is famous within the industry for claiming to save GM hundreds of millions of dollars in warranty costs from catching vehicle problems early in vehicle life cycles. And Preuss is quoted in the CNNMoney report saying that OnStar is a factor in at least two-thirds of customers' decisions to buy a GM product. The challenge for OnStar goes beyond the decline in vehicle sales volumes. GM is competing against Ford and other OEMs that are emphasizing smartphone connectivity, which provides many of the same features and functions as OnStar. With so many functions shifting to phones customers are less inclined than ever before to add yet another subscription, even if it is for an embedded vehicle safety system. One of OnStar’s greatest assets, though, is its brand, which is why the group is looking beyond GM. Preuss says OnStar may return to offering its system to competing OEMs or may vary its business model to allow for sponsored content or services such as ad-supported turn-by-turn instructions. There are other scenarios for an OnStar move beyond GM including a commercial telematics solution for fleet or asset tracking, offerings for insurance companies to target pay-as-you-drive or teen driver applications, as well as, finally, buy-here-pay-here products for the sub-prime auto lending market. Given the urgency of the subscriber erosion situation, it is likely that OnStar will bring multiple solutions to market including, no doubt, a smartphone application offering with roadside assistance, concierge services and other location aware functions. OnStar has shown such a concept in the past but never pulled the trigger on introducing it to the market. Now, such an application is seen not only as a potential source of revenue but also as a brand builder and, of course, an extension of the OnStar platform. Preuss has sent mixed messages regarding the positioning of OnStar going forward. In the CNNMoney report he says the focus will be squarely on vehicle safety. In an Automotive News article announcing his appointment he stated that “fun” will be a priority for OnStar going forward. There is not doubt, though, that OnStar is being re-architected and repositioned to be competitive in a world characterized by social networking and device connectivity. What is most likely in the short-term, is an aftermarket offering, most likely in the form of an OnStar-equipped mirror. In fact, Gentex, which manufacturers an aftermarket replacement version of the OnStar-equipped mirror, stopped distributing its product through distributor Mito two months ago, at the request of GM. OnStar is likely taking control of the distribution of the product in preparation for mass market sales. An introduction of the OnStar brand into the retail automotive aftermarket is in keeping with growing interest in vehicle connectivity, navigation and tracking in general and telematics in particular. The Federal government has made known its interest in standardizing event data recorders in vehicles as a result of the recent Toyota unintended acceleration recall debacle. And companies as varied as TomTom, Hughes Telematics, Guidepoint, Rosen Entertainment and Pioneer Electronics are enabling roadside assistance capabilities in their devices and systems. Guidepoint is the single largest incumbent supplier of aftermarket telematics solutions. The company distributes primarily through car dealers and maintains its own call centers for roadside assistance and concierge calls. Guidepoint recently partnered with Rosen to bring an aftermarket head unit to the retail market with an on-screen button to access call center services. Hughes Telematics is another company looking to enter the aftermarket. Hughes has had an aftermarket offering ready for more than a year and is believed to be putting the team together to bring the product to retail. Given the fact that OnStar has been hiring executives to staff a regionalized sales force, the indication is strong that the group is target both consumer opportunities through retail and commercial opportunities. And an offering to be sold through expediters to competing OEM dealers is not out of the question. (After all, what can a Ford dealer do when the customer asks for OnStar by name?) The key difference, and main advantage, of OnStar remains the automatic crash notification – a function which may be problematic to offer in an aftermarket device. No one believes an aftermarket solution will be an easy sell at retail. But an OnStar-branded device will likely get serious consideration from consumers. The wild card for OnStar will be the precise nature of its reconfiguration and repositioning. The best news is that OnStar is not sitting back in the face of incursions by Google, Apple and others into the vehicle connectivity and infotainment business. The challenge will be for OnStar to demonstrate its ability to retain its industry leadership position and maintain or grow its subscriber base. The announced hirings at OnStar and relaunch indicate much more than a business model tweak for the group. Further Insight: - Global Automotive OE Telematics Market 2008-2016 - Joanne Blight

April 23, 2010 12:04 rlanctot
Reflecting Airbiquity’s rising star in the automotive telematics market, the company and partner Hitachi Automotive Systems, Ltd. have announced a partnership to provide telematics services for electric vehicles (EVs) globally. The announcement clearly positions Airbiquity – given its existing relationships with Toyota, Ford and OnStar – as the dominant telematics service provider of the future. The announcement emphasizes the global nature of the network and relationship between Hitachi Automotive and Airbiquity. The magnitude of this relationship is substantial, therefore, encompassing as it likely does, not only potentially the launch of the Leaf EV in North America but also perhaps lining up Airbiquity as a candidate to serve as the technology and infrastructure behind Renault-Nissan’s wider EV agenda including Europe, South America and Asia-Pacific. (Airbiquity had no comment on any potential relationship with Nissan or any other OEMs.) While Airbiquity is known for its so-called data over voice solution, the Leaf relationship is related to Airbiquity's Viaaq technology. Viaaq is serving as the back-end infrastructure for some Smart-grid implementations, paving the way for a next-generation role for Airbiquity in the telematics eco-system. The Airbiquity platform is well-suited to the task of supporting the needs of an electric vehicle to communicate vehicle location and battery charge. This relatively low bandwidth, data over voice, solution provides more than enough capacity both for battery-related information communication as well as safety and security and even eCall support. But the tie up with Hitachi is targeted at a broader IT infrastructure play. The only competing solution provider with an equivalent global footprint in telematics is WirelessCar, which already boasts relationships with Volvo Trucks, Volvo and BMW. In many ways, the WirelessCar solution represents a next generation answer to telematics service provision, emphasizing Internet protocol communications and voice-over-data technology. Where the global ambitions of Hitachi and Airbiquity may fall short is in extending the vehicle pipeline they currently offer to smart-grid applications and a deeper relationship with Nissan. The current point of leverge with Nissan derives from Hitachi Automotive's IT work in Japan in support of Nissan's telematics offerings in that country. The prospect of moving beyond "pipes to cars" and into the back-end systems represents a major leap for Airbiquity and puts the company in contention with IBM and other back-end integrators including Microsoft (Hohm) and Google. Unfortunately for Airbiquity, Ford has already announced its partnership with Microsoft for Smart-grid integration. OnStar has announced its intention to provide similar Smart-grid capabilities, but has not announced an IT partner. Hitachi and Airbiquity say their platform forms a central hub in the smart-grid network. They say the partnership paves the way for creating gateway infrastructures that can be linked with smart-grid systems. This will increase the footprint of both companies in the field of global connected vehicle services, and help automotive manufacturers worldwide quickly implement EV solutions, creating efficiencies and optimizing the costs of their service operations. Airbiquity has already made great progress in bringing the platform to a wider audience. The relationship with Hitachi also has implications for Ford Motor Company, for whom Hitachi/Clarion is a major manufacturing partner. Ford has implemented the Airbiquity platform as have OnStar and Toyota. All four OEMs have global ambitions for electric vehicles and telematics. Ford, for example, is expected to bring Sync to Europe soon. While several of these relationships are relatively new, it is fair to say that Airbiquity is poised to become the telematics service industry leader in the coming years. It is worth noting, however, how fleeting such leadership can be. It has been just three years since Continental acquired Motorola’s telematics business which at the time included contract manufacturing of the Ford Sync and OnStar modules. Within two years the OnStar business had shifted to LG Electronics and the Sync manufacturing relationship had shifted to Flextronics. But given its relationships with four of the largest car makers in the world, Airbiquity may have finally found  recipe for a more enduring position at the top of the industry. Further Insight: - Global Automotive OE Telematics Market 2008-2016 - Joanne Blight

March 18, 2010 16:03 rlanctot
Thanks to Meta Systems and its Octo Telematics subsidiary, the Italian market has become the de facto European proving ground for pay-as-you-drive insurance products. Octo Telematics pioneered pay-as-you-drive insurance in Italy and elsewhere in southern Europe with a connectivity box capable of providing tracking and stolen vehicle recovery services. As a result, it is no surprise that Allianz chose Italy for the launch of its Service Pack and Pay Per Use services more than a year ago. Many insurers in Italy provide PAYD products and services. By some estimates, as many as 800,000 drivers are enrolled in such programs. Allianz has set itself apart from the existing competition in a number of significant respects, but it is similar in also making use of a Meta System supplied “black box.” Both the Service Pack and Pay Per Use services from Allianz are enabled by this connectivity box. Service Pack offers customers eCall, bCall, theft notification and vehicle tracking applications via the Meta Systems box. The service is 99 Euro/year and requires the free installation of the box on the vehicle by a network of professional installers. The customer surrenders the box when the service is terminated. Allianz does not claim to offer stolen vehicle recovery, only theft notification. This notification is achieved through the use of an RF keyfob device, not unlike the way LoJack works in the U.S. If the vehicle is moved without the keyfob being on-board, the customer will be notified by Allianz representatives via the company’s wholly-owned Mondiale Assistance call center subsidiary. Vehicle recovery is left to the public authorities after the customer notifies the police. The Mondiale call center also support the bCall and eCall applications. Unlike the eCall services of competing insurance companies, the Allianze system provides for call center reception and processing of both eCalls and bCalls via an embedded SIM. Calls are activated manually via a single button or automatically in the event of a crash. Competing insurance companies that offer eCall-like features typically set up the application with the customer’s home or mobile phone number, with no connection to a call center. As a result, customers receiving these calls are responsible for seeking assistance for the driver. In this way, Allianz has put itself squarely in the eCall business for its Italian customers who choose Service Pack. Switzerland is expected to be the next market to be activated. The Pay Per Use product is an add-on service for customers who have already chosen Service Pack. The Pay Per Use service is targeted at low mileage drivers who can achieve savings of as much as 25% on their premiums based solely on the amount of driving they do – ie. mileage. Allianz is thought to be satisfied with the response thus far, though it has not been overwhelming. The 99 Euro/year price was introduced in 2009 as a promotional offer but remains more than a year later. The next steps for Allianz are to bring its solution to more European markets. The range of savings on the Pay Per Use product  will vary based on demographic and geographic calculations. The Allianz initiative shows a maturing in the PAYD market as location-aware insurance products begin to move into the mainstream. The Allianz offering is significant for its integration of eCall and bCall services along with theft notification all enabled via the customer’s phone, though the theft notification is enabled by an embedded connection.

March 8, 2010 12:03 rlanctot

European service providers have given up waiting for the European Union’s eCall initiatives and mandates to deliver emergency roadside assistance across Europe. A growing number of private service providers are turning to existing technology in SMS-based alternatives to deliver eCall solutions without using the official eCall in-band modem technology. (They are, however, including the minimum data set portion of the standard.)


Volvo, Peugeot and BMW remain the only three OEMs with European eCall solutions implemented, using SMS technology. But third parties including insurance companies, automobile clubs and call center providers are stepping forward with solutions that will work with existing technologies. The latest launches include Allianz’s pay-as-you-drive offering, Allianz OrtungsServices GmbH’s LifeService offered in conjunction with AvD, TCS’s announcement of eCall service in Switzerland in connection with PSA, and ATX’s so-called “self-dispatch” solution.


These new systems are designed to provide eCall and bCall support throughout Europe and in the driver’s own language. But the language barrier is only one challenge to providing a pan-European eCall solution. The other challenge is the choice of connection technology. While the European Commission nominated in-band modem technology – sending data over the voice channel - as the standard for official eCall coverage, no mechanism was put in place for upgrading hundreds of public service answering points (PSAPs). The PSAPs must be equipped with the in-band modem technology to connect properly.


Qualcomm has stepped forward, as the winner of the in-band modem competition, to license its technology at no charge. But no action has been taken at the PSAP level, hence the emergence of private initiatives.


There is a bit of an irony in the focus on eCall. The volume of eCalls that are seen by the current providers number at most in the hundreds per year. This tiny number of incidents calls into question the value of the eCall mandate itself as a lifesaving technology, but this obscures the much more impressive number of roadside assistance calls, which number in the millions. (No one, including this analyst, is questioning the value of eCall services.)


The private service providers clearly recognize the value of the combination of these two services to their customers, hence the new offers. Lurking behind these initiatives is a battle for control of the automotive call center market in Europe. This multimillion Euro opportunity will grow in importance as more OEMs launch telematics services.


By some estimates, ARC Europe, European equivalent of the American Automobile Association, is the dominant provider of automotive call center support with more than a third of the market, followed by Mondial Assistance, Europe Assist and AXA. The Allianz PAYD offer is made in cooperation with Mondial, its wholly-owned subsidiary.


Allianz’s PAYD solution includes a module which provides a portfolio of services including eCall, bCall, stolen vehicle recovery, theft notification, and a hands-free Bluetooth interface. The range of solutions included with the device provide a more comprehensive offering reflecting the priorities of an automobile insurer including, most interestingly, a hands-free phone interface to reduce distracted driving.


From sister company Allianz OrtungsServices GmbH, comes the infrastructure for LifeService112, most recently added by Automobilclub von Deutschland (AvD). AvD, though older, is smaller than the widely known Allgemeine Deutsche Automobil-Club (ADAD), which is part of ARC Europe. With the new service, launched last week, AvD says it will be the first German automobile club to offer members GPS mobile phone localization for emergencies.


The new offer is made possible by the LifeService platform from Allianz. LifeService112 provides the technical platform for mobile phone localization for more than 90% of Germany’s public safety answering points. It is also compatible with both SMS and in-band modem technology.


Accident victims have previously been located via mobile phone cells with the accuracy depending on the number of radio masts. By contrast, GPS technology – independent from the network and available worldwide – can better pinpoint a victim’s location. Special software for the mobile telephone will make precise GPS tracking possible. Allianz OrtungsServices GmbH’s goal is to enable all European rescue coordination centers to access the LifeService112 system. In an emergency, the public safety answering point can locate every mobile phone by way of either radio cells or GPS. Allianz is seeking additional partnerships for the eCall/bCall service including, but not limited to, auto makers.

PSA has signed an agreement with Touring Club of Switzerland (TCS), announced at last week’s Geneva Motor Show to provide eCall and bCAll services for Peugeot and Citroen models sold in Switzerland beginning this month. In the event of an accident, an eCall SMS (with location data) is sent to TCS to process and contact the relevant PSAP. The system is a two-button solution allowing the driver or passenger to activate an eCall or bCall voice connection manually or automatically anywhere in Europe. TCS worked with Alabus AG to implement the solution and the hardware came from Magneti Marelli. The TCS call center will be able to respond in the driver’s language.

ATX, which has lost its European telematics service relationship with BMW, is making what may be the most radical proposal of what it calls a self-dispatching approach to managing eCalls from vehicles. The company’s announcement says its system will work with SMS or in-band modem technology and will make use of multilingual text-to-speech technology and Internet resources all of which may help to define an entirely new approach to telematics and call center support in Europe.


March 7, 2010 17:03 rlanctot
It is very strange indeed to find Toyota at the focal point of a vehicle recall imbroglio after years of immaculate quality ratings and at the peak of its global market share. But the strangeness of the timing is even more severe than that, because it was Toyota’s Prius that was used by QNX and Alcatel-Lucent to promote their “ng connect” LTE Car initiative late last year. The Toyota Prius became the mascot for the ng connect program, popping up in Detroit, Los Angeles, New York, Washington, D.C., and Las Vegas, in fact anywhere cars or automotive technology were on display. The purpose of the ng connect tour was to spread the word about the onset of 4G LTE technology and what it will mean for connected cars. Of course, the tour was also a showcase for QNX’s vision of both on-board and connected applications. Chief among the roster of on-board applications was a so-called Virtual Mechanic. The virtual mechanic is intended to provide live in-vehicle status reports on a wide range of vehicle systems including brakes, transmission, fuel, etc. with text and graphics. QNX is already the enabling software behind OnStar which, like Ford’s Vehicle Health Report feature, provide drivers with emailed status reports. The difference with virtual mechanic is that the information is live and delivered inside the vehicle. For QNX, the virtual mechanic was merely a concept shown in the context of a wide range of other concepts including in-vehicle displays of remote traffic cameras, access to Internet radio (Pandora), and a host of other location-aware and entertainment oriented applications. But the plot thickens with the emergence of Toyota’s recall nightmare because QNX is a supplier to both GM and Toyota. The virtual mechanic concept appears to belong to QNX, but the possibility for GM or Toyota to adapt the technology for their own marketing and customer relations purposes changes the prospects for this technology considerably. The question now is which manufacturer, Toyota or GM, will be first to enable a virtual mechanic-type application in the car. Or could some other QNX customer leap to the front of the queue: BMW, Peugeot, Mercedes Benz, Chrysler, Hyundai? Any one of these companies can look at Toyota’s difficult situation and realize they could be the next car company with software-laden cars producing unexplained, and seemingly unfixable, failures. A challenge for both Toyota and GM in implementing QNX's virtual mechanic will be the limited number of cars both companies sell with full-screen navigation sufficient to graphically display on-board systems. But LCD attach rates are improving for all OEMs in all segments and this application is yet another justification for large display fitment. Suffice it to say that the virtual mechanic is a concept that has arrived just in time to offer a way forward for a damaged auto maker and possibly for the entire industry. Whether QNX’s customers view this prospect from the same perspective remains to be seen. A final note: In this analyst’s opinion, the virtual mechanic will also make a great customer demonstration for car dealers. virt-mech-2.JPG Source:  Strategy Analytics

March 4, 2010 00:03 rlanctot
At a recent telematics event in Shanghai a General Motors executive, when asked who owned the vehicle data generated by the OnStar system, said the customer owned the data. His response was somewhat misleading, and it highlighted the quandary facing the automotive industry, particularly in the wake of Toyota’s unintended acceleration woes and related recalls. What vehicle data are car makers going to collect, who will have access to it and under what circumstances? In truth, customers have little or no access to the data generated by their telematics systems. In fact, the sharing of this data is anathema within the industry. Some limited information is being shared under very specific circumstances (vehicle location, fuel level, battery charge, etc.), but the volume of data being shared is miniscule in the context of the scope of data collection. Actually, for many OEMs it is a cardinal rule to not preserve or share vehicle data for a wide variety of reasons including, but not limited to, liability and privacy. It is for this reason that companies such as BMW, Mercedes Benz and GM have not provided Web delivery platforms for preserving and reporting comprehensive historical vehicle data to their telematics customers. While it might make sense to provide complete driving and service history to the customer it is also possible that either the customer or the OEM does not want all of this information shared for the reasons noted earlier. (Of course, OEMs are particularly concerned with liability, consumers are more concerned about privacy.) Toyota’s recent recalls related to vehicle acceleration and other failures have highlighted these limitations and threaten to upend the manner in which vehicle data will be managed in the future. One early press report suggested that the current Toyota on-board systems for capturing event data were limited and definitely not able to shed light on incidents that may have contributed to driver fatalities. Whether that is true or not, it is clear, by now, that Toyota either has insufficient data to properly diagnose the problem(s) in a timely manner or is hiding valuable information from its customers and NHTSA. It is hard to envision governmental organizations such as the National Highway Transportation Safety Administration (NHTSA) resisting the urge to demand higher degrees of data collection, disclosure and analysis. (A brake override system mandate is already in consideration, according to published reports.) Consumers may demand more data as well and solutions already exist from suppliers such as Hughes Telematics and QNX. Hughes has been showing for more than three years its concept of a vehicle Website showing the status of various vehicle systems in realtime. And QNX has demonstrated comprehensive on-board diagnostics including data and graphics and complete user interface with its LTE car project in conjunction with Alcatel Lucent. Ironically, even in a perfect world, the prospect of diagnosing vehicle problems from vehicle-generated data is far from guaranteed. Still, more data is generally better and the federal government in the U.S. long ago contributed its voice to the debate. A mandate for electronic data recorders – set in 2006 - comes in to being in 2011 in the U.S. laying out requirements for data collection, retention and the terms and conditions for access to the data. Perhaps Toyota would have benefited from such an implementation. (The U.S. mandate contrasts with Europe where privacy concerns have trumped the interest in accident diagnostics thereby forestalling wider EDR adoption either voluntarily or via mandate.) EDR data, unlike telematics-related data, is typically only gathered in connection with a vehicle accident and is normally only accessible to public authorities acting on behalf of law enforcement or insurance agencies with the cooperation of the vehicle owner. OEMs that have deployed telematics systems are already capturing, processing and leveraging vehicle data whether consumers have access to this data or not. GM, for one, claims hundreds of millions of dollars in savings from warranty claims avoided by leveraging OnStar data to resolve problems before they become recalls. Most consumers are not aware of what data is being captured or how it is being used. This contrasts with the mobile market where Droid phones, for one example, ask the customer to opt into sharing location-related information. The proliferation of connected vehicles will force OEMs to reconsider their data management and sharing policies. Toyota is no doubt weighing its strategy for managing its fleet; processing vehicle failure information; sharing that information with regulatory authorities, dealers and consumers; and responding to inquiries from the public and the press. Out of a worst case scenario for the industry is likely to come a new paradigm for information sharing that will be more open and comprehensive and which, hopefully, will lead to greater peace of mind, safety and understanding of vehicle functions among the driving public.

February 21, 2010 20:02 rlanctot
Telematics has become synonymous with automatic crash notification and roadside assistance, thanks to the admirable and successful marketing efforts of General Motors and OnStar. But telematics is so much more than this and this story needs to be told, particularly in the wake of Toyota’s recall debacle. I have been driving a telematics equipped vehicle for the past year.  For me, telematics has meant destination and navigation assistance, movie times and theater locations, and flight arrival times, but, most importantly, telematics has been a powerful connection with my dealer. When combined with on-board diagnostics, the telematics system in my car has meant notifications for low coolant, an engine failure (although the vehicle was still able to operate), low oil level, low tire pressure, and scheduled maintenance.  In each case, the warning in the vehicle caused me to contact the concierge service for guidance.  And in almost every case, the guidance led to an on-the-spot invitation to visit the dealer to correct the problem. While saving lives via ACN is certainly a valuable contribution for a telematics system to make, it is the daily needs related to maintaining a vehicle (and preserving its function and value) that determines the true worth of a telematics system to the dealer and the customer.  With each dealer visit I have learned more about my car and forged a stronger bond with the dealer and with the brand. The combination of diagnostics and call center connection has made the ownership experience one of the most pleasing automotive experiences I have ever had owning a car. In contrast, I receive occasional mailings related to my other vehicle when the computer for the dealer of that vehicle guesses that I have crossed a mileage threshold and am due for scheduled maintenance. (For some reason, dealers – at least the ones I have worked with - routinely fail to properly set the on-board diagnostic systems to the correct mileage thresholds or time stamps, which leads to premature visits for oil changes etc.) There is a big difference between an onboard service notification – which conveys a degree of urgency – and a dealer postcard that looks like a mass mailing come-on. The value of integrating diagnostics and telematics systems has not been lost on OEMs, as both Ford and GM have introduced diagnostic elements in their respective systems. Both systems provide email notifications of vehicle status and functionality. And Hughes Telematics’ vision for automotive connectivity includes Internet-delivered vehicle status reporting. For me, though, it is the integration in the car itself that is most powerful. What is missing in some systems, though, is a more complete integration. When I call the OEM call center, the OEM should already know that a problem has been flagged. The driver shouldn’t have to tell the call center what the error code is. In fact, there are some indications that OEMs such as BMW are moving toward more pro-active messaging to customers in the event of error codes or system failures. Acura, for example, leverages the XM satellite radio connection to the vehicle to provide for direct one-way communications to specific vehicles in the event of recalls or other urgent service issues. (The market is also moving toward onboard and offboard digital manuals, but OEMs will remain hesitant to focus on enabling the customer to correct any but the simplest vehicle problems.) The next step in this process will see a more complete and comprehensive vehicle connectivity solution.  Today’s integrated telematics and vehicle diagnostic offerings fundamentally help to preserve and extend the customer relationship as well as the value of the vehicle investment. For those reasons, it is time for a more complete portfolio of integrated messaging to include leasing, insurance and warranty service partners and their information. Customers should only have to go to a single Website to manage or obtain all of their vehicle information including financing, insurance, scheduled maintenance, maintenance history, and warranty information. Bits and pieces of this kind of integration exist, but the OEM or dealer group that makes a more complete solution happen will have a significant advantage in building customer relationships and maintaining the value of the fleet. Toyota’s woes – and the many other less noteworthy recalls that regularly afflict the industry – are a wake-up call.  As more OEMs move to bring vehicle connectivity to the market, the focus will be on the leveraging of diagnostic data for enhanced dealer-customer connectivity.

February 10, 2010 00:02 rlanctot

While car makers around the world are developing traditional embedded telematics systems for deployment worldwide, a secondary market in embedded (ie. line fit) and aftermarket modules intended to meet local mandates for eCall, vehicle tracking and road charging are proliferating. Mandates in such diverse locations as The Netherlands and Brazil are feeding this frenzy and new suppliers with new solutions are emerging on the scene on a weekly basis.


The six most prominent applications driving demand and interest - among suppliers, car makers and service providers – are pay-as-you-drive insurance (PAYD), the European eCall mandate, the Brazilian stolen vehicle recovery mandate, eHorizon map-as-a-sensor offerings, road charging (The Netherlands, France, Germany) and buy-here-pay-here solutions. Each one of these opportunities represents millions of devices to be sold and installed although, interestingly, the service opportunities are more limited with only PAYD, SVR and buy-here-pay-here promising any service revenue. Road charging in The Netherlands alone represents an 8M unit build with 300K-500K units/annually going forward.


PAYD is the highest profile opportunity in the industry today with Octo-Telematics leading the way in Europe with more than 1M installed devices in use. Smaller players are multiplying throughout the continent, though, as insurers recognize the opportunity to take customers from competitors, reward their own “best” customers, and gather better data for determining risk. Progressive is the market leader in the U.S., but with competition fierce in the automotive insurance industry, PAYD will be embraced nationwide. Not coincidentally, Octo-Telematics has partnered with Directed Electronics to tackle the U.S. market.


After PAYD, the Brazilian mandate for stolen vehicle tracking and vehicle immobilization has attracted as much attention as PAYD with several companies claiming design-in wins. There were some hiccoughs on the way to achieving a nationwide mandate, but the latest indications are that 100% of vehicles produced in Brazil will be obliged to be fitted with tracking devices enabled for vehicle immobilization. The compromise that allows the mandate to move forward leaves the service provisioning to the customer’s discretion.


Road charging, an application already widely deployed in the fleet industry, is coming to passenger cars to reduce emissions, traffic, and accident rates. The volumes for road charging will be significant and suppliers are circling.


The eHorizon solutions, in module form, offered by Navteq/Magneti Marelli/ST Microelectronics and lately demonstrated by Intermap/Visteon offer to integrate map and road elevation data into advanced driver assistance applications. The volumes here will grow, but the rate will be slow as consumers gradually come to embrace emerging safety systems.


Buy-here-pay-here modules used by both new and used car resellers to track and immobilize customers that miss payments is the most well-established of all the module-related opportunities. Players in the industry have recently coalesced around the Payment Assurance Technology Association ( to raise the profile of this vital application as a legitimate segment worthy of attention and respect. No doubt demand has never been higher given current economic decisions.


Supplier approaches to module mania range from application specific solutions to all-purpose devices not only suitable to multiple uses but remotely configurable and integrated with Website access. ABS T&T, which has partnered with Continental, distributes a multipurpose module for tracking and telematics applications ranging from shipment tracking to stolen vehicle recovery and telematics.


NXP offers its ATOP module which it describes as the world’s first single component on board unit (OBU) capable of supporting ITS applications, stolen vehicle tracking, PAYD applications, last mile tracking (automotive black box) as well as enabling ADAS systems. The device can be configured with a wide range of connectivity including GSM, CAN, near field communication (NFC, USB, and GPS and also enables downloadable applications.


Whether purpose-built or all-purpose, module makers are proliferating spurred on by government mandates as well as new and existing commercial opportunities from both the consumer telematics and fleet market segments. This is precisely the right stimulus package for an automotive industry on the mend.

November 16, 2009 12:11 rlanctot
Mercedes-Benz launches its Mbrace 3G-based telematics system today as standard equipment on all models except the GLK, the E-Coupe, the SLK and C-Class cars. It is an option on those models. The first six months of service are free and $280 a year after that. Keeping the concierge service costs $20 a month. The new system sets a new standard for smartphone integration, upgradability, voice recognition, dealer-customer integration, car-phone-PC integration, and customer support via three call centers one each for roadside assistance, concierge and emergency calls. Mercedes has been quoted as saying that it plans to add an application store and is also looking at enabling access to concierge and other services via the customer's phone, independent of the car. The bottom-line is the system is intended to be future-proof. The announcement marks the beginning of a transition by Mercedes away from current TeleAid telematics service provider ATX toward Hughes Telematics. The Hughes Telematics vision of service provision ultimately includes satellite and Wi-Fi connectivity, but the Mercedes system launches with 3G cellular connectivity. (Hughes' plan also calls for Website management of vehicle status and diagnostics. It is not clear how much of this capability, if any, will be available at launch.) The significant aspects of this industry changing announcement includes: -> VoiceBox natural language understanding voice engine. - Mercedes is the second OEM, after Lexus, to implement this technology which allows users to make naturally spoken requests for information and assistance either for controlling the car or for location information. The voice recognizer can speed access to information regarding weather or location data, for example, by eliminating the need to connect with an operator, but the operator is still available if the voice recognition fails. -> Three call centers for processing different types of calls. - Most telematics systems use a single call center for processing all types of calls. The Hughes system behind Mbrace has separate call centers for ACN or emergency calls, roadside assistance, and concierge services. -> Upgrade and updatability - Applications can be added wirelessly or at the dealer. -> Connectivity to customer phone - Vehicle doors can be locked or unlocked remotely via smartphone. The vehicle can be located in a crowded partking lot via smartphone app. If the vehicle is stolen, the user can be notified via text message. Additional smartphone functions will be available and an "app store" is in the works. Bluetooth connectivity is also provided for. -> Access to off-board information - Routes and POIs can be sent from Google to the car. (The Hughes vision ultimately calls for Website management of vehicle status and content ranging from audio and video files to service status and remote diagnostics. Mercedes will either be enabling these capabilities at launch or shortly thereafter.) -> Dealer connect - The system will connect the nearest Mercedes dealer if there is a problem. -> Automotic collision notification - Activated in the event of an airbag deployment or by a press of the SOS button, a Mercedes operator will get on the line, notify 911 and stay on the line until help arrives using vehicle coordinates. -> Real-time weather and traffic reports - Also provides real-time assistance in the event of a disaster. An operator will help locate shelter or alert family members. -> Concierge service - Access to a representative who will help make dinner reservations, order flowers, buy tickets to the opera, or book a flight. -> Access to services via phone - Mercedes may eventually allow access to services via phone independently of the car. Link to Wired News story: Related Strategy Analytics reports: Telematics as a Downloadable App Arrives - App Stores Coming to the Automotive Market - 27M Users of eCall and Infotainment Services by 2015 - Economic Climate Demands Sharper Connected Vehicle Business Models -