Rethinking Telematics

Count Johnson Controls Inc. among the suppliers whose appetite for telematics business went unsatisfied. In the mid-1990s, the supplier wanted to launch a program similar to General Motors Corp.'s OnStar, with 2-way messaging, remote door unlocks, roadside service and perhaps cellular phone service.

“But we struggled on how to make money,” says Jim Geschke, vice president and general manager of JCI's automotive electronics unit. Specifically, JCI couldn't elbow its way into the revenue stream alongside the cellular-service providers.

Ultimately, JCI retrenched and developed a new telematics strategy that depends less on embedded technology and network service providers and more on Bluetooth, the wireless communications protocol that is finding its way into a growing number of cellular phones and offers loads of potential for automotive applications.

JCI has established a Bluetooth communications node that allows hands-free operation of cell phones while driving. JCI calls the system BlueConnect. It serves as the basis for Chrysler Group's new UConnect system, which will be offered as a Mopar dealer-installed option on most '03 models.

Visteon Corp. also has embraced Bluetooth. Next year, BMW AG will begin offering its X5 activity vehicle with Visteon's Bluetooth module. In Europe, the product will be marketed as the Bluetooth Wireless Interface Module; in the U.S., it will be known as Mach Voice Link.

Like JCI and Visteon, many suppliers have been rethinking telematics. The breathless excitement of three years ago that promised enormous profits in telematics has given way to a more cautious realism that treats such devices the same as any other new product that comes along.

The telematics market has disappointed many suppliers, regardless of size. Cellport Systems of Boulder, CO, tried to market Universal Hands-Free cell phone cradles that would mount below the dashboard but decided last spring to divest its automotive business. At the time of the announcement, Cellport said OEMs would be better served by existing Tier 1 suppliers that are better organized to handle such support.

General Magic Inc. of Sunnyvale, CA, recently announced it is ceasing operation after a 2-year relationship with OnStar, the GM subsidiary that supplies roadside assistance and calling service to some 2 million subscribers (see WAW — Oct. '02, p.57).

General Magic has operated the Internet-based Virtual Advisor data center for OnStar. GM affiliate EDS is assuming the operation. OnStar officials say customers won't even know the operation has changed hands.

Big suppliers have not been immune. In June, Japan's No.1 supplier, Denso Corp., eliminated 177 jobs at two manufacturing plants in Vista, CA, and Carlsbad, CA, due to a downturn in the telematics market.

Denso officials say the cuts were necessary because customers were delaying the rollout of telematics products on new vehicles.

Likewise, Delphi Corp. has scaled back some of its plans for the telematics sector. Two years ago, it began selling an aftermarket cradle for personal digital assistants that would mount below the dashboard, much like the Cellport phone cradle. After a year, the product, sold as Communiport, was taken off the market due to slow sales.

Delphi's other telematics endeavor, MobileAria Inc., is showing more promise. MobileAria uses Bluetooth to connect a laptop and cell phone, providing voice-activated access to e-mail, voice mail, traffic information and the Internet. MobileAria figures prominently in Delphi's Truck Productivity Computer (see story, p. 15).