NEW YORK—Telematics has the potential to create $20 billion to $40 billion in revenues during the next ten years, according to a recently released Booz Allen Hamilton report.
Telematics has the potential to transform car manufacturers into providers of recurring, high-end consumer services, the report said. Despite restrictions on cellular phone use by drivers in New York and other areas, consumers will demand access to more information through wireless channels.
However, the report contends, the auto industry could have difficulty taking advantage of this opportunity. The growing availability of wireless content off-board the vehicle—such as through handheld devices—could displace a large chunk of telematics content, while the capabilities to develop increasingly complex user interfaces could benefit telecommunications companies or Internet service providers.
“Automotive players will have a hard time capturing a piece of the telematics pie, primarily because they lack consumer focus and understanding of mobile services. In addition, they are more distant from the fast-changing technologies that drive telematics than their emerging competitors, which are also able to innovate faster,” said Francois Truc, Booz Allen vice president specializing in the global automotive industry.
For automotive firms to achieve market success in telematics, they must raise their understanding of consumers’ expectations of mobile services and wireless products and learn to drive their businesses at the fast pace of innovation that characterizes consumer electronics and telecommunications. Ultimately, the report argues, this will have to come through the right blend of alliances and partnerships with hardware, software, wireless carriers and content providers.
