Business   

Telematics to go pragmatic

WHAT IS in store for the global telematics industry in 2003, following the industry shakeout in 2002? According to a review presented recently by Steve Millstein, President and CEO of Dallas-based ATX Inc., the world's leading independent telematics service provider, the focus of the industry will shift from vehicle owners to automobile manufacturers and their affiliated dealerships.

The past few years, points out Mr. Millstein, has seen telematics overhyped and capital flowing in with unrealistic expectations of returns. In 2002, the tide of capital turned and many telematics providers went under.

However, even though the hype is gone, it does not mean the market is gone. The needs that telematics has always been intended to serve are still there. Ultimately, telematics must show a present economic value to the automotive original equipment manufacturers (OEMs) in order to thrive.

Mr. Millstein emphasises that ATX began the transition from consumer-focused to business-to-business telematics with the launch early last year of ATX's vehicle relationship management (vRM) program. The vRM approach combines the ability of telematics to extract real-time data from a telematics-equipped vehicle with an ongoing wireless connection into the car to build a marketing channel and to improve vehicle service levels for the automotive OEM and dealership.

Telematics hype promised that a growing stream of subscribers would be willing to pay a lot, every month, to receive a wide variety of discretionary, customised in-car services. The ATX approach to telematics seeks to turn this concept on its head. Rather than a quest for subscribers with deep pockets, the emerging telematics model shows a future that will be transaction-based across a huge number of recurring data exchanges.

The factors driving the beginning of transactional telematics are: The need to deploy far below luxury models only; the need to reach drivers who may not be readily billable; the need to offer dealers validated business opportunities; the need to automate the `last mile' of automotive sales and service; and the need by automotive OEMs and their affiliated dealerships for real-time performance data.

None of these is end-user specific. A vehicle driver need not select a telematics application. Telematics has been wounded over and over again by people who want to claim retail territory that is already covered by wireless communications providers. These so-called `back seat' applications such as custom news, stock trading, sports information, or entertainment — even personal calling — do not represent a vehicle-centric technology. They represent entirely optional uses that may conflict with actual vehicle needs.

Under-hood applications and front-seat services, on the other hand are central to the driving experience. The ability to collect, interpret and transmit data that is relevant to the car and its real-time driving environment is valuable to the driver, the dealer and the automaker. By meeting the needs of all three, telematics can create a winning situation that is worthy of subsidy on the one hand, and of consumer investment on the other.

Mr. Millstein pointed out that automobile OEMs have gone to extraordinary lengths to shorten manufacturing lead times, to streamline and validate every step of in-plant process, and to control inventory both in their own pipeline and in the supply chain. What OEMs have not been able to control so well is identification of a component failure that occurs in the field post-sale, that requires modification of a Tier-I supplier's component.

In a hypothetical example, if an under-hood engine component begins to fail, it may take weeks or months to correlate service records and discover a product trend. After that, it may take additional months to gain buy-in from the supply chain, make a component change and receive fresh new parts. Meanwhile, an OEM factory can spend four months churning out cars with an expensive fault.

vRM telematics-equipped vehicles can self-report component failures, and correlate that report with a steady stream of information on driving patterns, mileage and other factors. To support it, Telematics Service Providers (TSP) must move away from the call centre concept and instead become a data hub for many inputs.

The emerging vRM model provides a means for dealers to move from physically pulling a processor out and replacing it, to patching onboard software and firmware. Some of the most significant present-value economies will come from this automation of the `last mile' between the OEM and the car owner.

ATX's vRM systems will soon come with an e-owner's manual. This manual will be an interactive function that uses telematics to compare the driver's needs together with a record of recent activity within the car. If a `check engine' light comes on and the driver taps the e-owner's manual button, the system will have already prepared a list of frequently asked questions for the exact situation that led to the warning. Voice prompts and speech recognition, a critical part of everything we do, allows the person to narrow down their options and make a crucial decision without looking away from the road.

Another change that Mr. Millstein predicts for 2003 is that telematics programmes will be customised to fit the target market and brand identity that each OEM or model line seeks to reach and convey. If vehicle-based telematics is to succeed in the automotive marketplace, the providers must tailor services so that they address the specific needs of the customer segment each vehicle model attempts to target.

Another focus of attention in telematics development, according to Dr. Thomas Schalk, ATX's voice technology principal, will be delivering interactive voice recognition applications customised for specific automotive brands and perhaps even model lines within a brand.

In his report, "Immediate Telematics Benchmarks for Interactive Voice Technology," Dr. Schalk, identifies several benchmarks the telematics industry needs to deliver immediately and in the near future to automakers' telematics programs.

His report emphasises the importance of a consistent, intuitive and seemingly seamless interface between the system and the driver whether the system is used by the driver to control the in-vehicle environment or to receive driving directions using in-vehicle location-based technology.

According to Dr. Schalk, voice-delivered telematics must focus on ensuring the technology recognises the skill level of the motorist interacting with the system, filters out repetitive prompts characteristic of many early versions of the technology and becomes more anticipative of drivers' needs. He emphasises these goals are not complex and can be achieved in `adaptive' steps.

N. N. Sachitanand

in Bangalore

Printer friendly page  
Send this article to Friends by E-Mail

Business

News: Front Page | National | Southern States | Other States | International | Opinion | Business | Sport | Miscellaneous |
Advts: Classifieds | Employment | Obituary |

Stories in this Section

• Finance panel's role in public finance revamp
• Company directors face tougher times
• Web Scraping
• Tech stocks weak on growth uncertainties
• Changes in the Finance Bill, 2003
• Telematics to go pragmatic

Copyright © 2003, The Hindu. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu