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Telematics and “Connected Vehicles”

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Presentation on theme: "Telematics and “Connected Vehicles”"— Presentation transcript:

1 Telematics and “Connected Vehicles”
Mike Peterson (LFM ’94) Strategy Planning Manager OnStar

2 Telematics and Connected Vehicles
Definition of Telematics Drivers Infrastructure Current & Future Offerings Challenges & Opportunities Telematics – LFM webcast.ppt

3 Definition of Telematics and “Connected Vehicle”
A two-way connection to and from a vehicle for data and information transfer Telematics is typically not: Onboard autonomous navigation systems AM/FM radio A telematics system consists of: Vehicle (cell phone, GPS, vehicle data) Wireless interface Back-office systems Telematics – LFM webcast.ppt

4 Potential Components of a Telematics System
WIRELESS INTERFACE Satellite / Microwave Point – to – Multi-Point CELLULAR WIRELESS CONNECTIVITY Fiber / Cable ENABLED VEHICLE CELL TOWERS Call Center Application Management BACK-OFFICE SYSTEMS Content Providers Source: Erik Bue Telematics – LFM webcast.ppt

5 Markets for Telematics
Vehicle types Personal vehicles: cars, trucks Boats, motorcycles Work vehicles: mail trucks, semis, Border Patrol, Coast Guard, ambulances Vehicle owners Personal Fleets Military Telematics – LFM webcast.ppt

6 Value Propositions for Telematics
To consumers Safety & security Time savings (navigation) Increased productivity (in vehicle) To fleet provider Optimization of assets (asset tracking, performance monitoring) To business Additional data from vehicles (warranty, usage) Increased vehicle sales (or “price of survival”) To government Improved infrastructure management (traffic, tolls) Telematics – LFM webcast.ppt

7 There is a significant market opportunity for telematics, if done right.
Wireless use is growing US wireless industry is $80B (WSJ 7/28/03) 30 M US households will employ data networks by end of 2007 (Park Associates) Intel’s Otellini predicts that 1.5 B PC’s will have wired or wireless broadband connections by 2010 Cable broadband services posting operating profits of ~60% (CIBC) Consumers want to be more productive Consumers pay $15-100/mth for cell phones & internet service providers Average US citizen spends 541 hrs/yr driving in vehicles (1.5 hrs/day) (NTPS) 97 M people in the US spend at least 37 minutes commuting in their car every day. Automotive industry is highly competitive; features and services which provide a lead are crucial to success Source: Erik Bue Telematics – LFM webcast.ppt

8 Predictions: Telematics-Enabled Auto Sales
12 10 8 USA 6 W. Europe Japan 4 2 2002 2004 2007 2010 Telematics – LFM webcast.ppt

9 Prediction: Telematics-Enabled Autos In-Use
45 40 35 30 25 USA W. Europe 20 Japan 15 10 5 2002 2004 2007 2010 Telematics – LFM webcast.ppt

10 Current Telematics Services - Consumers
Safety Air Bag Deployment Notification Seat Belt Tension Notification Emergency Assistance Roadside Assistance Security Automatic Theft Notification Theft Tracking GeoFencing Vehicle Status Remote Diagnostics Remote Vehicle Operation Remote Unlock Remote Horn/Lights Information Services Navigation Assistance Points-of-Interest Vehicle User Info Convenience Services Internet Based Services Telematics – LFM webcast.ppt

11 Additional Telematics Services - Fleets
Fleet Performance Maintenance Management Fleet Tracking Asset Management Vehicle Information Usage Monitoring Vehicle Tracking Fleet Utilization Customer Processing Paperless Manifest User log book Instant Messaging Job Dispatching Telematics – LFM webcast.ppt

12 Examples: OEM telematics offerings
Mercedes (Tele Aid): $240/yr + airtime to call center $75/yr route support/traffic package $1300 optional integrated phone $400 voice recognition option for phone Jaguar (JaguarNet): $ airtime Includes portable phone and voice-activated controls BMW (Assist): $120/yr $1290 phone req’d for telematics $1800 navigation system req’d for telematics Volvo (On Call Plus): $240/yr Does not offer route support or remote diagnostics OnStar: $200/yr for safety & security services (airtime included) $400/yr to include information & navigation services Telematics – LFM webcast.ppt

13 OEM Telematics Players – Offerings over Time (North America)
CY Telematics – LFM webcast.ppt

14 Enhanced vehicle diagnosis & repair
Many opportunities exist in the future to enhance current services and create new ones. Data services Software downloads Content downloads Enhanced vehicle diagnosis & repair Expansion into other dimensions of vehicle lifecycle (manufacturing, vehicle development, design) Key enablers for future services/growth Communications bandwidth Coverage (wireless) Vehicle penetration Vehicle integration (messaging) Reduced costs (hardware, service) Standards (Bluetooth, vehicle messaging) Telematics – LFM webcast.ppt

15 Marketing of services (education of consumers)
There are many “pieces of the puzzle” which create value in telematics. Marketing of services (education of consumers) Integration of services (menu structures) Integration of equipment into vehicle (human/machine interface) Connection of vehicles to content (wireless) Conversion of data into services (back office) Content providers (vehicle data, entertainment) Telematics – LFM webcast.ppt

16 OEM-owned telematics service providers (OnStar)
Competition among service providers is seldom one-to-one; each player has a slightly different offering. OEM-owned telematics service providers (OnStar) Aftermarket devices (LoJack, NetworkCar, Mobile Guardian) Independent telematics providers – retail (ATX, Cross Country) Independent telematics providers – fleet (Qualcomm Voice portals (TellMe, BeVocal, Internet Speech, AOL By Phone) Cell phone voice services (Verizon, Sprint) Auto club services (AAA) Telematics – LFM webcast.ppt

17 In addition, each piece of the telematics value chain has its own set of players.
Content TeleAtlas, NavTech, MetroNetworks CNN, Disney, ESPN Operating systems (Microsoft, Java, Linux) Vehicle hardware (Delphi, Nokia, Samsung) Voice recognition (Nuance, Speechworks, IBM) Call centers (EDS, GE, Cross Country) Business Operations (Digitas, Acxiom, Sigma) Issues in partner selection: Volume capability Support capability (established firm?) Exclusivity Flexibility Telematics – LFM webcast.ppt

18 Cell (Analog, CDMA, GSM; voice, data/SMS)
Finally, there are a variety of wireless technologies that can be applied to telematics. Cell (Analog, CDMA, GSM; voice, data/SMS) Short-range communications (Bluetooth) Medium-range communications (802.11) Satellite communications (Boeing Thuraya, XM Radio, Sirius) Issues in technology selection: Level of ubiquity Reliability of technology Upgradability Level of control over provider (multiple sourcing) Telematics – LFM webcast.ppt

19 Challenges – Hardware/Technology
“Clockspeed” mismatch Telematics services (1-6 months) Consumer electronics (6-18 months) Vehicle development process (3-5 years) Vehicle ownership lifecycle (6-15 years) Shifts in technology (analog  digital) Technology application (client vs. server) Challenges – Societal Government regulation (FCC – E911) Interface with emergency service providers Telematics – LFM webcast.ppt

20 Challenges – Strategic/Financial
High cost of infrastructure Investment = control Involvement of multiple partners Packaging of services Wide variety of customer needs/wants Consumer confusion Selection of business model Upfront equipment sales Service subscription Grow critical market mass Operating efficiencies Licensing/royalties Telematics – LFM webcast.ppt

21 Examples of Business Models “In Play”
i-Mode DoCoMo: Define platform for 3rd party software development: monthly revenue from: basic service, data traffic and fee from 3rd party service providers Microsoft: Create the OS for vehicles that becomes the standard that all future consumer telematics applications must be built off of OnStar: Seed network through factory-installation onboard vehicles purchases Cell Co’s: Compete based on lowest price to service quality ratio TiVo: Charge monthly service fee upfront at a discount Palm/PDA: Define & market hardware & OS; nurture application developers. Make alliances with Cell Co’s. Dell: Least expensive, custom-assembled modular systems based on commodity components Leverage COTS Components: eg Apple iPod: Over 1M people have been willing to pay $ for the 5-40GB drives. Source: Erik Bue Telematics – LFM webcast.ppt

22 Telematics represents a significant but complicated opportunity.
Parting Thoughts Telematics represents a significant but complicated opportunity. There are many ways to create value in telematics, many of which have yet to be fully exploited. The telematics “industry” is a network of partners across a variety of disciplines. The “winners” in telematics, as well as the ultimate potential of the industry, is yet to be determined. Telematics – LFM webcast.ppt

23 Open Questions (for discussion)
How does/could your business participate in this space? What needs to happen to unlock the full potential of telematics? What service domains will be most important in the future? What business model(s) do you think will be most successful? Telematics – LFM webcast.ppt

24 Appendix – OnStar Overview

25 OnStar’s Beginnings 1996 2002-3 Employees 18 436 Subscribers 1 2M+
Employees Subscribers 1 2M+ Hardware Phone 5th Generation Services 8 15 Database 600K 7M Advisor Seats 6 1,000+ Distribution 1,500 Dealers Factory Brand Recognition 1% 90% Telematics – LFM webcast.ppt

26 Portfolio of Core OnStar Services
Safe & Sound Automatic Notification of Air Bag Deployment Emergency Services Roadside Assistance Stolen Vehicle Location AccidentAssist Remote Door Unlock Remote Diagnostics Online Concierge Directions & Connections All Safe & Sound services plus: Route Support/Directions Information/ Convenience Services RideAssist Luxury & Leisure All Directions & Connections services plus: Personal Concierge OnStar MED-NET Telematics – LFM webcast.ppt

27 OnStar Personal Calling
Embedded in vehicle Hands-free, voice-activated interface Pre-paid minutes No roaming, no long distance charges Nationwide wireless network coverage Telematics – LFM webcast.ppt

28 OnStar Virtual Advisor
Personalized web-based information delivered to the vehicle using hands-free, voice-activated interface Sports Scores/News The Sporting News Radio Weather Traffic Metro Networks/Tele Atlas Stock Quotes Fidelity Investments News Wall Street Journal CNNRadio Entertainment Telematics – LFM webcast.ppt

29 Telematics – 040109 LFM webcast.ppt

30 Terrestrial Repeaters
XM Satellite Radio XM Satellites Two Geo-stationary satellites 1,700 terrestrial repeaters In-vehicle equipment Receiver Antenna Radio head unit Rock Roll Terrestrial Repeaters Telematics – LFM webcast.ppt

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