DENVER -- Several glowing telematics reports predict that demand for in-vehicle services will grow exponentially during the next five years on the coattails of anxious drivers who not only want, but are willing to pay premium prices for safety, security and navigation services.
If these predictions are correct, the future of telematics looks bright. But analyst predictions made more than a year ago placed telematics in a stronger and more prevalent position in today's market. Somewhere along the way reality stifled the telematics dream.
"During the last year-and-a-half there was a tremendous amount of hype regarding telematics," said Gary Wallace, vice president of external affairs for ATX Technologies Inc. (atxtechnologies.com) in Irving, Texas.
A February 2000 report from Strategy Analytics (strategyanalytics.com) said the worldwide telematics market should be worth around $24.3 billion by 2006, but more recent reports value the market at about half that number.
Allied Business Intelligence (alliedworld.com) has predicted that the global telematics market will be worth about $12.3 billion by 2007.
Wallace said the hype surrounding telematics was symptomatic of the dot-com craze, which was in full force in 2000 and the beginning of 2001. Telematics was billed the "Internet on wheels," even though the technology, applications and consumer readiness were far from mature.
Since 1996, when ATX debuted its Lincoln Rescu system with Ford Motor Co. (ford.com), essentially the only applications that have consistently kept consumer attention are related to safety and security.
But even those applications have suffered at the hands of automakers still feeling out the most lucrative approach to telematics.
Said Frank Viquez, senior automotive analyst with Allied Business Intelligence, "The OEMs haven't been able to translate to the customer how telematics can be useful in their daily lives."
What most consumers already know is how useful mobile phones are in their daily lives, and automakers should play off this loyalty to acquire and keep telematics users, according to Viquez and Andrew Cole, global wireless practice analyst at Adventis Corp. (adventis.com).