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Global Trend Analysis of Passenger Vehicle Telematics and Infotainment Market - 2009 Edition
Frost & Sullivan, Sep 2009, Pages: 57
New Business Models and Novel Concepts Advance the Global Telematics Market
New trends are emerging in the fast growing telematics market space where there is a renewed interest from vehicle manufacturers and suppliers to create solid revenue opportunities through telematics products and services. Even though OEMs are cash-strapped during these recessionary times, emerging development areas such as electric vehicles are prompting them to look at new telematics concepts like vehicle-to-grid communication as a solid way of packaging and creating new revenue opportunities. In parallel, many OEMs and suppliers like Continental are looking at connectivity and connected services as a part of new app store-type models like AutolinQ, which, in all probability, might usher in a new era of ecosystem-type business models in the automotive world. OEMs like Toyota have, even in these tough times, have launched two new telematics services in the North American market. The Indian market is also looking up finally with growth in areas like navigation and vehicle tracking. Despite the decline and crunch in auto sales, OEMs and suppliers are finally showing good interest in using telematics as a USP for selling traditional and new concepts like electric vehicles.
“The new generation of telematics and navigation applications will focus on connectivity and new business models where recurring revenues will be the principal element”, notes the analyst of this research. “Added to this, new areas like telematics and IT systems for electric vehicles will also drive the companies involved to create packages where the utility and value added dimensions will create a positive influence among consumers.” OEMs like Nissan, Mitsubishi and Think are leading the development of IT systems and telematics concepts for electric vehicles, focussing on smart communication between the grid and the driver and providing valuable points of interest information like next charging station availability and so on. Moreover, suppliers like Continental and alliances like Genivi are pushing the development of more open standards and ecosystem-type models where the aim, especially in the case of Continental’s AutolinQ, is to bring in a business model similar to Apple app store into the automotive world. This, in turn, is bringing new types of suppliers and service providers into the market. Such trends indicate the renewed interest that vehicle manufacturers and suppliers are exhibiting in using telematics as a clear USP.
Focus to be on Achieving Affordability
The clear challenge for OEMS and suppliers is to focus on bringing down the price of telematics hardware to affordable levels. At the same time, the main challenge remains to develop business models where revenue generation opportunities, roles and responsibilities of each market participant in the value chain are plainly defined. This is especially true for the new age of connected navigation and associated services, where the biggest questions that still remain are what the key services are and who will control the value chain and revenues. “Although there several positive developments in the global telematics market, the fact remains that the majority of consumers still finds this a non-affordable entity, largely because of the high initial price,” explains the analyst. “There also remains some degree of confusion about future value chains and business models and these need to be sorted first for to ensure a growth-oriented future.”
Positive developments like OEM low-cost navigation where companies including Renault, Volkswagen and Toyota have taken the lead will definitely result in several connected business models associated with these devices. Coupled with this, OEMs also need to take stock of the growing number of non-automotive suppliers like Microsoft dominating the telematics and infotainment business models; they need to develop business models whereby they can retain their core competency and use these companies to acquire much needed cross-industry expertise. “OEMs need to form alliances and partnerships with a growing number of non-core automotive suppliers like Microsoft who have proved that their approach can increase volumes and decrease costs,” advises the analyst. “Alliances like Genivi also need to be looked at seriously as this creates a positive development and implementation scenario.”
Technologies
The following technologies are covered in the research:
- eCall
- Stolen vehicle tracking
- Pay-as-you-drive insurance
- Real-time traffic information
This Frost & Sullivan research service titled Global Trend Analysis of Passenger Vehicle Telematics and Infotainment Market - 2009 Edition provides market trends, forecasts and country-level roadmaps. In this research, Frost & Sullivan's expert analysts thoroughly examine the following technologies: eCall, stolen vehicle tracking, pay-as-you-drive insurance and real-time traffic information.
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