Wiring the vehicle on the road?

"INTERNET ON Wheels'', ``The digital car'' and car.NET - intrigued? Enter the world of telematics - the astonishing convergence of the fields of automobile engineering, digital chip design, wireless and the Internet.

In a talk on General Motors's digital transformation at a computer world conference recently, Mr. Ralph Szygenda, chief information officer of General Motors, said, ``The products we ship, say a Cadillac Seville, rival the computer industry in microprocessor consumption. The Seville has five on-board microprocessors that monitor and control everything from fuel to air mixture going into the engine to finding your favourite radio station. When you marry all this computer power with wireless and satellite technology, what you really have is a Java browser on wheels''.

Although not very apparent, the auto industry is one of the most intense users of information technology, and telematics is widely believed to be the next big breakthrough in automobile technology, equated with such path-breaking developments as the high compression engine and microprocessor-controlled electronics.

How does a telematics service work? Consider an off-board navigation system - this connects a PDA such as a pocket PC with a mobile phone and a wireless receiver. The route calculation is handled at a computing centre that sends continual updates to the pocket PC through short messaging system (SMS). The route navigator is dynamic - current traffic conditions are taken into account in providing the driver with real-time advice.

The field offers so much potential that every global manufacturer has a stake in this in some fashion. Onstar, a wholly owned subsidiary of GM, provides interesting in-vehicle communication and information services such as receiving help during an accident, have a tow-truck sent directly to collect your broken down car or ask directions without having to leave your vehicle. That is not all - you can find out the nearest restaurant or make hotel reservations on the road. As of April, more than one million Americans had subscribed to Onstar's services validating Onstar's value proposition.

Likewise, DaimlerChrysler has spun off DCXnet, their e-business subsidiary. A pioneer in this field, one of its important priorities is to provide innovative services for customers through telematics. The company had started the `Internet on wheels' project in 1997. This has resulted in the availability of telematic services as a standard feature in all Mercedes-Benz 2001 models. Emergency services and in-car conveniences are now available at the touch of a button! Information services such as stock quotes, news and weather forecasts are optionally available. Interestingly, one of the DCXnet research labs is located in Bangalore, the other two being located at Palo Alto and Berlin.

BMW and Motorola have teamed up to develop sophisticated integrated telematics communication system that enables a BMW driver to stay wired to the world while keeping his hands on the wheel and eyes on the road!

DaimlerChrysler has also set up a joint venture with Deutsche Telekom called Tegaron Telematics in Germany, to provide a range of services across addressing safety and information, navigation and mobility. Tegaron is working closely with Mercedes-Benz, Audi, Volkswagen and Renault. Tegaron has the distinction of introducing the first off-board navigation system in November last year.

Ford, a relative laggard in this field, is trying to bridge the gap, having tied up with telecom veteran Qualcomm. Wingcast, their joint initiative, aims to Internet and wireless enabled Ford cars, and is expected to hit the road in 2002.

The rest of Europe is also actively researching the possibilities of telematics. The Foresight vehicle programme, the U.K. Government's prestigious project to create the modern, technology-enabled car will help sustain the U.K. automobile industry's competitiveness. And guess what, telematics applications are highest on their agenda too.

On the other side of the ocean, Japanese car companies such as Toyota are laying their bets on Bluetooth. Their belief is that Bluetooth is an inexpensive way to provide hands-free mobile connectivity within cars.

Not unexpectedly, Microsoft, as the latest entrant into this arena with its ambitious car.NET, hopes to make a paradigm shift in the use of communications and computing infrastructure in cars. Motorists will be able to listen to their e-mail, make on- line purchases, and access on-line music, for instance. So much for the who's who of the telematics space.

Let us step back and understand what has triggered this new wave of technology adoption and also what has made it feasible. The growing need for safety and security is one of the prime drivers. The desire for convenient and timely in-vehicle assistance, including navigation services, is another. Not to be left out is the desire for real-time information and entertainment. These diverse market triggers have spawned developments in multiple segments including safety, mobility and navigation. Another way of viewing the market is to slice it along needs of the front seat vis-a-vis the rear seat! The front seat focuses more on safety and navigation related applications while the rear-seat market caters to in-vehicle infotainment needs.

Spurred by the initial success of concepts such as Onstar, as well as the huge potential in this sector, analysts predict a burgeoning demand for telematic services. In a recently completed `Digital car study', Allied Business Intelligence, a boutique communications research firm in New York, estimates the world telematics market to rise to nearly $13 billion by 2006. They add that recurring revenue for services alone will constitute a substantial chunk ($4 billion) of this. Mr. Saul Rubin, an auto analyst from UBS Warburg, is even more optimistic - he predicts that the worldwide market will grow to over $24 billion by 2005 and touch $47 billion by 2010. Service providers and aggregators would seize a decent share of this market, according to the Warburg study.

An interesting characteristic of the telematics landscape is the variety players in the value chain - auto manufacturers attempting to enhance revenue streams and also customer orientation through on-board telematic systems. There are subsidiaries such as Onstar offering telematic services for a subscription fee directly to the end-consumer. There are telecom players such as Motorola, Deutsche Telekom and Qualcomm who bring in their communications and computing expertise. Wireless carriers who offer the connectivity and software companies offering integrated solutions have a role to play too. Platform suppliers such as Sun and Intel, IBM and Microsoft have staked their claims too.

The telematics industry pins its hopes on widespread availability of affordable broadband services, especially to provide end- consumer services. The emergence of standards is also as crucial as there are multiple technologies and interfaces involved. Consumer preferences as well as regulatory norms will also determine the market growth.

Now, what does all this mean for India? The author feels that there is an immediate opportunity for the Indian IT industry. The boundaries of the global telematics industry are just being defined, and there is a lot of room for players offering integrated telematics solutions. With Indian companies' proven strength in acting as extended R&D labs for telecom and product companies and expertise in embedded systems, there is a great opportunity to tie-up with large car manufacturers to offer state-of-the-art telematics solutions. In fact, telematics could be one of the key drivers in pushing m-commerce forward, and could be yet another way to provide value-added services, and to later customise solutions for the Indian auto industry. As for the Indian consumer, it is early days yet. A lot will depend on whether car manufacturers are able to identify the needs of the Indian consumer and offer affordable solutions as well.

One thing is clear though interesting days are ahead for car- makers and car-lovers alike. The day is not far away when the vehicle on the road will become yet another node on the information highway.

Sudha Kumar

Associate Vice-President, Corporate Marketing, Infosys Technologies.

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