All cars and light trucks eventually will have some level of embedded telematics because the benefits to both the consumer and the auto manufacturers are so compelling. This according to new research published by the Telematics Research Group (TRG).

To the consumer, the safety and security aspects of telematics will eventually make telematics a requirement, much like anti-lock brakes are today.

Automotive telematics, in its infancy with a mere 5% of autos so enabled, is on the start of an explosive growth cycle, says TRG.

By 2006, 33% of new autos sold will have telematics, the study shows. Over the next five years, the installed base of telematics-enabled autos in the U.S. will reach nearly 21 million for a compound annual growth rate of 63%.

"Telematics is an emerging industry at the same stage the PC industry was in back in 1980," says Egil Juliussen, TRG's principal analyst. "During the 1980s, the number of PCs-in-use per 1,000 people exploded from six PCs to just over 200 PCs per 1,000 people. From 2000 to 2010, the number of telematics-enabled autos-in-use are projected to grow from four per 1,000 people to nearly 200 telematics vehicles per 1,000 people."

To the auto manufacturer, the benefits of embedded telematics are widespread and may be enough to justify the cost based on operational cost avoidance alone. The collection and analysis of remote diagnostics on large numbers of autos, for example, can identify reliability problems and has the potential to lower warranty and recall costs. Remote diagnostics also is likely to supply valuable data that can provide information for future design enhancements.

Telematics goes well beyond safety, security and remote diagnostics. Embedded telematics provides a platform for subscription-based content services. By 2005 these services will begin to exceed revenues from equipment, as telematics will serve as a delivery platform for everything from news, weather and traffic information, to e-mail, instant messaging and voice services.