Automotive Telematics and

GPG Multimedia in the United States

Electronic toll collection Car navigation

Traffic management and route-
guidance On-board internet and
Internet and e-mail access Mobile
office Theft-tracking Emergency call
On-board collision-warning Interactive
vehicle diagnostics Value-added
content services Nav Systems
Reservations Entertainment Bundled
systems Communications Video
games DVDs Integrated systems
Electronic toll collection Car navigation
Traffic management

GLOBAL POLICY GROUP

 Automotive Telematics and
GPG Multimedia in the United States
Outline of Presentation
Defining Telematics
Passenger Car Telematics Market Overview
Commercial Vehicle Telematics Market
Overview
Recent Developments: Emerging Drivers of
Growth in the Passenger Market
Future Trends in Passenger Car Telematics
Future Trends in Commercial Vehicle
Telematics
 Automotive Telematics and
GPG Multimedia in the United States

Defining Telematics
GPG Defining Telematics

telematics
the convergence of wireless
communications, location
technology, and in-vehicle
electronics which is being used to
integrate the automobile into the
information age
 Telematics Building Blocks:
GPG Technologies

Location Voice-recognition Communications

Technology Technology Technology

Map Networking
Databases Integrated Telematics Systems and Vehicle
Navigation Mayday Car Audio/ Interface
Systems Systems PCs Video Technology
Systems

Wireless
Interior Phones
Systems
 Telematics Building Blocks:
GPG Applications and Services
Services available using
telematics devices:

Emergency call Navigation and E-commerce

or mayday route guidance applications
services services
Interactive value-
Device-to-device Remote vehicle added services
communications access and
diagnostics Commercial fleet
Interactive management
Person-to-
on-board
person Remote vehicle
entertainment
communications theft tracking
 Automotive Telematics and
GPG Multimedia in the United States

Passenger Car Telematics

Market Overview
 The U.S. Passenger Car Market:
GPG Current Device Options
Autonomous navigation systems
Integrated multimedia systems
On-board personal computers
Rear-seat entertainment systems
Installed wireless phones
Can be integrated with mayday service
Handheld wireless phones and PDAs
Not telematics devices
Could affect telematics demand
Similar technologies/functions, but portable
Wireless integration soon possible
 The U.S. Passenger Car Market:
GPG Current Service Options
OEM mayday or emergency call services
GM/Saab OnStar, Ford/Lincoln RESCU,
Mercedes TeleAid, Jaguar Assist, etc.
Simple interface, connects to human voice
Fee- or subscription-based
Range of services (mayday, concierge, etc.)
Independent information and emergency
call services
ATX, Cross Country Group
Similar services, fees, etc., to OEM systems
Often serve as call centers for OEM systems
 The U.S. Passenger Car Market:
GPG Key Telematics Suppliers
Automotive Communications
Dot.coms
networking and technology firms
interface firms
Satellite Location
radio firms technology
firms
Automotive Automotive
audio firms Telematics Call center
firms
Nav system
producers Automotive
interior firms
Automotive
electronics Voice recognition Mapping
firms technology firms software firms
 Automotive Telematics and
GPG Multimedia in the United States

Commercial Vehicle
Telematics Market Overview
 The U.S. Telematics Market:
GPG Telematics Devices for Tractors

On-board integrated telematics systems

On-board computer, GPS, wireless
communications, interface with tractor data bus
Driver interface in cab for data and voice
communications with dispatcher
Screen for incoming text messages with
keyboard or touchscreen for sending messages
 The U.S. Telematics Market:
GPG Telematics Devices for Trailers
On-board integrated tracking systems with
GPS receiver/antenna, wireless
communications, and battery/charger
On-board sensor systems to allow
monitoring of whether trailer is loaded,
doors open, temperature, etc.
Sensor system often integrated with tracking system to
send real-time information to the fleet office
 The U.S. Telematics Market:
GPG Commercial Vehicle Services
Communications
Tractor and trailer location
Routing/dispatch/ETA information
Electronic driver logs
Reporting
Billing/accounting
Electronic customer relations management
Remote tractor/trailer monitoring/diagnostics
Theft monitoring
Driver performance monitoring
Fleet management, cost, productivity assessments
 The U.S. Telematics Market:
GPG Fleet Service/System Providers
Communications/information service providers
American Mobile, Qualcomm/OmniTRACS,
ARINC/Dominium, HighwayMaster, Orbcomm
Communications/information systems providers
Cadec, XATA, Eaton
Internet-based communications/information
services
@Road, Qwiktrack
Truck-stop kiosk/hook-up internet-based
communications/information services
DriverNet.com, PNV
 Automotive Telematics and
GPG Multimedia in the United States

Recent Developments:
Emerging Drivers of Growth
in the Passenger Market
 Driver #1:
GPG Volume
More telematics and multimedia devices as
OE options on MY2000 cars and light trucks
Primarily on luxury models
and minivans
Some telematics and
multimedia devices are
standard equipment in
MY2000
Only on luxury models
 Driver #1:
GPG Volume

More OE telematics services in MY2000

Particularly emergency-response services
Some (OnStar) expanding beyond luxury models
OnStar available on 29 MY2000 GM models
Rely on simple interface, human contact
More OEMs providing telematics service
interface as standard equipment
Revenues derived from service fees or
subscription
 Driver #1:
GPG Volume
Expanding range of products is essential to
markets growth
Increasing consumer awareness of telematics
Availability in rental cars, increased
advertising (especially OnStar and Mercedes)
Telematics systems in hands of early acquirers
and other trend-setters
High satisfaction and intention to make
second purchase among telematics users
Higher volumes reduce prices, encourage
innovation and integration
 Driver #2:
GPG Proliferating Industry Alliances

Computer Mapping Nav system

software software producers
Automotive firms
firms
electronics
firms OEMs
Automotive
interior
Voice firms
technology Telecom
firms Telematics service
Call center
suppliers providers
Communications providers
technology firms OEMs
Networking Content Telecom
Location technology equipment
technology providers
firms providers
firms
 Driver #2:
GPG Proliferating Industry Alliances
Telematics applications depend on diverse
technologies
Beyond scope of one individual company
Beyond scope of automotive OEMs
Beyond scope of traditional automotive suppliers
Beyond scope of telecom, consumer electronics,
IT suppliers
Telematics services require diverse types of
content, customer relations, etc.
Alliances essential to meeting needs for
diverse technologies and skills
 Driver #3:
GPG Movement on Standards
Auto and electronics firms cooperate on standards

In-vehicle Telematics
Standards Standardizing
interfaces to
TSC AMI-C
promote plug-
IDB and-play
SAE
Forum

Standardizing open
networks through
ITS Data Bus
 Driver #4:
GPG Benign or Supportive Public Sector
Regulations have helped create market
E-911 regulation provided invaluable boost to
GPS location technology
EPA and CARB regulations helped drive OBD-I
and OBD-II development
Federal and state governments actively
promoting ITS research and deployment
Safety concerns on hold so far, but threaten
Industry adopting some self-regulation
NHTSA focus to date on cell phones
States and localities also concerned
 Driver #5:
GPG Telematics and E-commerce
Many OEMs view telematics services as part
of web that extends customer relationship
Envision wide-ranging revenues from service
fees, vehicle maintenance, advertising, etc.
Simple interface as standard equipment
Contrast with device-led growth in Japan

Internet Internet Call

OEM
content portal center

Satellite Service
Radio Providers
 Recent Developments Drive
GPG Projections of Growth
Subscribers to Telematics Services
12 11.17

10
Millions of subscribers

7.98
8

6 4.96
4
2.54
2 0.82
0.01 0.06 0.2
0
1997 1998 1999 2000 2001 2002 2003 2004
Source: The Strategis Group
 Automotive Telematics and
GPG Multimedia in the United States

Future Trends in Passenger

Car Telematics
 Key Features of Next-Generation
GPG Telematics Devices
Simple interface
Technological capabilities must be balanced by
safety concerns and consumer interests
Voice recognition and text-to-voice
May be key to safety while car is moving
Systems may limit some functions to parked car
Plug and play
Consumer will be able to install next-generation
telematics and multimedia systems
Overcomes disparity in design and life cycles
 Key Features of Next-Generation
GPG Telematics Devices
Node on the internet
Connect vehicle to internet content
Safety concerns must be addressed
Real-time features
Real-time traffic key to growth in nav systems
Move away from limited coverage of
autonomous CD- and DVD-based systems
Integration of functions
Single interface for wide range of applications
Communications (data and voice), navigation,
audio, vehicle controls
 Next-Generation Telematics:
GPG Is Integration the Killer Application?
Everyone hopes for a single killer app
Navigation systems key in Japan
Killer application in U.S. could be integration
Integration of interface for voice/data
communications, vehicle controls, vehicle
diagnostics, location technology, etc.
Integration can ease driver distraction
Integration driving cross-sectoral alliances
Risk: Integrated devices can easily become
outdated as technology rapidly changes
Does the answer lie in services, not devices?
 Key Features of Next-Generation
GPG Telematics Services

Voice/human contact essential

Call centers will not be replaced by internet
Particularly essential to mayday services
Most important to older buyers
Location-based content to increase
Nationwide coverage essential
Real-time traffic, weather, road status
Location-based concierge services and POIs
Location-specific targeted advertising
 Leading Areas of Consumer Interest
GPG in Telematics Services
Remote Door Unlock 28%

Routing Assistance 31%

Remote Diagnostics 31%

Lost & Found 24%

Stolen Vehicle Tracking 41%

Vehicle Alarm Notification 25%

Severe Impact Notification 56%

Airbag Notification 38%

Roadside Assistance 61%

Emergency Response 61%

Source: ATX Technologies 0% 10% 20% 30% 40% 50% 60% 70%
 Potential Roadblock #1:
GPG Price

OE telematics devices still expensive

Installed nav systems cost $1800-$2000
Often bundled in luxury packages costing
anywhere from $2500 to $7000
Aftermarket systems also expensive
Device prices must come down
Telematics services usually start at
$200/year for basic package
Service prices less an issue provided
interface is standard equipment
 Potential Roadblock #2:
GPG Competition from Portable Devices

Portable Vehicle

Cell phones Bluetooth Portable

Smart Phones
Laptops
IDB Bus

PDAs Dockable Cell phones

Nav Systems
Mayday Systems
Nav systems
Driving Installed Audio/Video
Technology Systems
AutoPC
 Potential Roadblock #3:
GPG Privacy
Privacy issues long raised about Internet
Ability of Web sites to track individual
preferences without permission raises concerns
Telematics compounds concerns through
vehicle tracking, remote monitoring, etc.
Concerns already appear in trucking industry
Consumer concerns slow ITS deployment
Consumer concerns likely to grow
Telematics service revenues depend on
location-specific advertising, selling location
and purchase information, etc.
 Potential Roadblock #4:
GPG Infrastructure
Telematics infrastructure poorly developed:
Multiple wireless communication standards
3G may resolve some of this problem
What about 4G?
Traffic information is inconsistent
Traffic Data Forum aims to address issue
Poorly developed public ITS infrastructure
National ITS Architecture could address
interoperability issues
ITS Deployment funding increasing
Unclear support for IVI research
 Potential Roadblock #5:
GPG A Proliferation of Standards
Device-to-Device Communication
Connection Standards Standards
IrDA 3GPP
In-vehicle Telematics
Bluetooth Standards WAP
TSC AMI-C

IDB
Forum
SAE
Safety
Traffic
ITS Standards?
Data
Standards
Forum
Infrastructure Standards
 Potential Roadblock #6:
GPG Safety
Regulators target cell-phone use in cars
NHTSA recently issued public warning
States and localities consider bans
NHTSA now targeting in-vehicle telematics
NHTSA forum and public hearing assess
industry efforts, need for federal action
Ongoing driver-distraction studies seek data
In-car internet and e-mail of particular concern
Hands-free does not solve distraction problem
NHTSA open to industry self-regulation
Emergence of groups modeled on MADD?
 Automotive Telematics and
GPG Multimedia in the United States

Future Trends in Commercial

Vehicle Telematics
 Long-Haul Trucking to Remain Key
GPG Telematics Market
Key customers in long-haul trucking sector
Larger for-hire fleets have resources and needs
Evolving technology offers growth opportunities
Sector dominated by proprietary systems
and well-entrenched national providers
Qualcomm, HighwayMaster, American Mobile
Developing new products and services to take
advantage of new technologies
Trailer-tracking offers new growth area
Demand driven by concerns about theft, lost
trailers, efficient fleet-management, etc.
 Commercial Vehicle Telematics:
GPG Future Trends
Open data bus could offer new opportunities
IDB Forum has held discussions with heavy-
truck standards groups
Adoption of IDB architecture could open door to
new services and devices
Multimedia, in-cab computer, infotainment
Truck makers could become more active
Portable devices would appeal to fleets that
rely on rental units
Turnkey solutions would appeal to smaller
LTL fleets and short-haul fleets
 Commercial Vehicle Telematics:
GPG Future Trends
Growth in location-based wireless fleet-
management services
Communications, asset tracking, remote
diagnostics, theft monitoring, etc.
Integrates electronic fleet-management and
CRM functions with the Web
Integration with virtual marketplaces
Existing suppliers, communications, and
software firms developing new products
Smaller fleets prime market for new internet-
based technology and services
 Commercial Vehicle Telematics:
GPG Privacy and Safety Pose Threats
Privacy issue is a major potential roadblock
Fleets use data for performance reviews,
incentive programs, etc.
Truckers angered by close monitoring of
performance, driving techniques, etc.
Drivers and unions oppose tracking of trucks
Fears of big brother
DOT mandate of electronic recorders sparks
backlash
NHTSA and FMCSA concerned about safety
of trucking telematics systems
 Commercial Vehicle Telematics:
GPG A More Mature Market
Unlike passenger market, trucking sector has
existing telematics infrastructure
Long-haul market dominated by Qualcomm, etc.
Heavy investment to date make it hard for
fleets to move to more open systems
Truck makers play little role to date
Smaller fleets offer best target
Internet-based services appealing due to low
start-up costs
Truck-stop services target individual truckers
Fast-growing short-haul sector also key
 Automotive Telematics and
GPG Multimedia in the United States

Summing Up
 Summing Up:
GPG Keys to the U.S. Telematics Market
Development of integrated devices with
simple interfaces that address safety
concerns at an affordable price
Need to provide more than portable devices
Standardization is key to meeting goals and
offering latest technology in the car
Simplicity and safety essential in vehicles,
even at expense of gee-whiz technology
Industry must impose limits or regulators will
Risk of public backlash if safety not addressed
 Summing Up:
GPG Keys to the U.S. Telematics Market
Development of targeted services delivered
safely with low-priced (or free) interface
Need to compete with other similar services
Potential competition from telcos, etc.
Consumers do not want multiple internet
accounts, e-mail addresses, phone
accounts/numbers
OEM-Internet alliances may be answer
Privacy could become increasingly important
Key question: Why should the consumer
pay an automaker for these services?
 Automotive OEMs and Telematics:
GPG Competing in an Open Market

OEM service-focused strategy endangered

by open access, portable devices
Europeans see handheld devices as key
Safety/roadside aid services clearly appeal
Voice contact essential in U.S. market
Key test: Renewal rate for OnStar
Costs of delivering such services will escalate as
subscriber base grows
OEMs must get consumers to buy broader
range of services from them