Paving a Telematics Future

In-vehicle electronics systems to grow tenfold Visitors to Convergence 2000 this month in Detroit's Cobo Center will explore the future of telematics, which is predicted by 2010 to grow globally more than tenfold -from a current $4 billion to $46 billion - and produce more than $7 billion in earnings.

Based on a recent study by UBS Warburg LLC, 71% of those revenues a decade hence will be service-based - largely for service provider, security and phone charges and Web access items such as e-mail, navigation, news and entertainment.

Right now, the bulk of the telematics business is in Japan. Europe's telematics users only produce about $230 million in revenues, and in the U.S. it's a similar $280 million. But Japanese drivers, with a serious need for traffic and navigation information, already plunk down $3.68 billion for telematics products and services. For example, nearly 2 million navigation systems are expected to be sold in Japan this year - nearly double the sales of nav systems in the rest of the world.

The telematics connection in the vehicle of 2010 very likely will incorporate most of the leading-edge items that can be found in many high-end vehicles today - or will be in the not-too-distant future: a built-in GPS and wireless phone link and a connection to all of the vehicle's on-board sensors (such as wheel-speed sensors, fuel gauge) and an in-vehicle display unit or portable display units similar to current PDAs (personal digital assistants). The in-vehicle link to a PDA is one of the most recent innovations, with a 2002 model appearance likely from products by Delphi Automotive Systems, Visteon Corp. and Siemens Automotive.

The real change by 2010 will be in the number of telematics users and the way telematics devices interconnect. All components, but more specifically those such as the wireless phone or PDA-type display unit, could be hard-wired through a vehicle port or interconnected via a truly wireless Bluetooth (named by its developers after an ancient Viking king) "network" using something akin to today's infrared connections, but which doesn't require line-of-sight for reception.

Mostly for safety's sake - keep your eyes on the road and your hands on the wheel - the entire 2010 system very likely will be voice-activated and controlled via text-to-speech and speech-to-text technology. That "basic" hardware configuration would enable:

* Immediate accident notification (automatic 911 call upon a signal from a crash sensor).

* Location identification (for driving directions or locating stolen vehicles).

* Web-based navigation as well as Web access for e-mail, news, stock quotes or even downloadable music or movies from satellite-based services similar to the emerging Sirius or XM radio.

One location-based service idea that has e-commerce types drooling includes the chance to offer advertising or special promotions to potential customers as they drive within range of a business.

* Real-time traffic information generated by highway sensors or "floating car data" that compiles an active database of traffic conditions from vehicles on the road via GPS and wireless links.

* Electronic toll collection.

* Remote vehicle diagnostics and service reminders based on the actual performance of the vehicle.

The Warburg study suggests that for the telematics industry to grow to its 2010 potential, particularly in the U.S. and Europe, a number of key pieces need to fall into place.

Mount the Database Offboard Most navigation systems currently use an on-board database, either CD-Rom or DVD (digital video disk). While this provides the luxury of almost an instantaneous update as travel plans change or side trips are added, it requires a dedicated - and relatively costly - on-board player and periodic map data upgrades.

To reduce costs for hardware, installation and disk upgrades, the system of the future will be Internet based, with digital maps downloaded on demand. This "thin-client" arrangement would allow a driver, for example, to download his map on his home PC and transfer it to his PDA such as a Palm Pilot. Or through a wireless phone, the data could be downloaded directly to the PDA - or a wireless device that combines PDA and cell-phone capabilities - while on the road.

Create an Open Architecture The PDA or a Web-enabled cell phone also could be used to download e-mail, news, stock quotes or points of interest along the route.

In much the same way that cassette tapes battled with 8-track tapes over an audio standard and VHS duked it out with Betamax on video, there are a number of varying operating systems in play in the telematics game. Microsoft Corp. offers its Windows CE and AutoPC, and others like SmartMove are working on a JAVA-based operating system. Warburg researchers suggest that it's in the industry's best interest to settle on one standard, providing an "open architecture" that will allow all of the vehicle systems, telematics products and applications to link through a common hardware and software interface.

Belgium-based SmartMove is hard at work developing its JAVA-based interface, which it claims is more adaptable to an open architecture than other operating systems now in use. It has high hopes that its system design will emerge as the "open architecture" standard for the industry. The vision of the SmartMove folks is that establishing one industry standard would allow consumers to choose from the broadest array of applications and services that fit their needs and their pocketbooks.

The Need for One Wireless Standard Another potential deficit to a large scale ramp-up of telematics users in the U.S. is competing wireless technologies. In much the same way as SmartMove has proposed an open architecture for hardware and service providers, a key part of that is a common wireless system. There currently are three different digital wireless standards in the U.S. In addition, most phone users with digital service also have analog backup.

The Warburg study points out that the analog system is fine for voice, but is "ill-equipped to handle complex data transfer" such as in-vehicle Web access or in-vehicle commerce. The three wireless U.S. standards include: CDMA (code division multiple access- in use by Sprint PCS and Verizon), TDMA (time division multiple access - used by SBC Wireless/Ameritech) and GSM (global system for mobile communication - used by Omnipoint, Sprint Spectrum and Bell South). TDMA and GSM will converge, say the Warburg researchers, over the next two years, leaving only two services. They predict that the effective consolidation of the digital standards into one will come with the advent of 3G (third-generation) cellular technology in the not-too-distant future, which will likely be able to accommodate all three of the wireless standards.

Any telematics provider "that builds a system that relies on the use of the digital network," say the Warburg researchers, "will most likely experience problems trying to implement its solution on a national basis." With a global standard, no user would be precluded from using a service or application because he or she was tied to a regional system or the wrong operating technology.

Branding IS Important Looking more to the business side of the picture, Warburg researchers point to the significant customer relations management advantage that automakers can gain by branding their own telematics systems. But they caution that moves that have allied Honda Motor Co. Ltd. and Toyota Motor Corp. with General Motor Corp.'s OnStar or Nissan Motor Co. Ltd. with Ford Motor Co.'s Wingcast could backfire.

Note the Warburg researchers: "Imagine the customer relations fiasco of a Honda customer (for example) who gets into a near-fatal accident. Thanks to OnStar, emergency workers rush to the scene and save his life . . . but it's possible the driver may look back on the incident and think `I nearly died in my Honda, but thank God OnStar was there to save my life.'"

The researchers suggest that the ideal would be for an "anonymous" telematics provider to deliver services under the name of the service provider - similar to what ATX Technologies now does for Mercedes-Benz in the U.S. or Tegaron Telematics (50% owned by DaimlerChrysler) does in Europe.

Current monthly prices for telematics services range from $10 to $35 in the U.S., $8 to $27 in Europe and $3 to $13 in Japan. And what will the eventual consumer cost be? Researchers at Warburg predict that in a decade, telematics subscription prices will level off at around $15 a month in the U.S, $13 or $14 in Europe and $6 monthly in Japan.

The Warburg study also suggests that while telematics will be a mechanism for automakers to promote and enhance their brands, it may well be that the bulk of the revenues - and profits - won't fall to the automakers. They suggest that telelmatics earnings will end up in the coffers of the providers of content, wireless services and technology and electronic hardware - in that order. For automakers, providing telematics-capable vehicles may end up becoming like near-standard features such as air conditioning, antilock brakes or cupholders as just the price of doing business.

Convergence 2000 pays first visit to Cobo Center It represents more than a quartercentury of automotive electronics history. More than 6,000 participants will gather Oct. 16-18 for Convergence 2000.

This will be the first time the biennial event pays a visit to Cobo Center in Detroit. The move symbolizes the rapid growth of automotive electronics itself: The show outgrew its old home at the Hyatt Regency in Dearborn, MI, and now has double the floor space at Cobo.

The discussions for the conference focus on the melding of automotive and electronics and will include three executive panels and 13 technical sessions. At least 75 technical papers will examine telematics from many perspectives, from business to technology and even social implications.

Convergence 2000 also features more than 140 state-of-the-art exhibits by a wide variety of software, hardware and service suppliers and OEMs.

"Convergence really provides the industry with a place to say `What if?'" says Convergence 2000 Chairman J.T. Battenberg III, chairman and CEO of Delphi Automotive Systems, this year's host for the event.

Monday morning's panel participants will focus on "The automotive electronics/information revolution: What will it take to make it happen."

Technical sessions later in the day will include The Electronic Coccoon, Infotronics Part I: Dymanic Route Guidance, Future Design Processes for Electronic Systems and Power Generation and Management.

Tuesday morning's tech sessions focus on Occupant Protection, Infotronics Part II: Mobile Information, and Electronics for PNGV's Fuel-Efficient HEVs .

Tuesday's luncheon panel offers What Got Us Here Won't Get Us There, a discussion of societal, industry and consumer trends that relate to electronics today.

Afternoon tech sessions on Tuesday look at Infotronics Part II: Mobile Entertainment, Environment and Robust Smart Sensing.

Wednesday morning sessions take a look at E/E Architecture, Distractions Minimum; Attractions Maximum and Electronics and the Evolving Driving Experience.

The afternoon is taken up with the Blue Ribbon Panel, chaired by William Powers, Ford vice president of research, and panelists Francois Castaing, former Chrysler executive vice president and now president of Castaing and Associates; Hans Gustavsson, senior vice president of product and process engineering at Volvo Car Corp.; Norio Omori, senior managing director of powertrain and control systems at Denso International; Donald Runkle, executive vice president of Delphi; and Franz Wressnigg, chairman of Siemens Automotive.

Keynote speakers throughout the week include Sun Microsystems Chairman and CEO Scott McNealy, Sega Enterprises Ltd. President (and former Honda executive) Shoichiro Irimajiri, Hewlett-Packard President and CEO Carly Fiorina, AT&T Chairman and CEO C. Michael Armstrong and Ford Motor Co. Chairman William Ford Jr.

The event is a joint project of the Convergence Transportation Electronics Assn., the Institute of Electrical and Electronics Engineers and the Society of Automotive Engineers. Proceeds from the conference benefit the Convergence Education Foundation, a nonprofit group dedicated to developing a passion for math and science in inner-city children.