Telematics-A New GIS Marketplace

By Mike Sheldrick

GIS is rapidly becoming an indispensable part of nearly every business, but it could now be poised for an even greater surge, as it moves from the desktop to PDAs, to cell phones, and to dashboards of automobiles.After all, if GIS is useful in the office, think how much more valuable it should be out on the street, for both consumers and business.

The in-vehicle navigation systems that have been available for nearly a decade developed independently of GIS.The rigorous in-vehicle demands for speed on limited processing platforms and compact data sets kept the two applications -- land-based and auto-based - separate.But now, the two technologies are converging, thanks to the availability of wireless data at reasonable data rates and prices.

The new opportunity is Telematics, a term that made its first appearance about ten years ago as the European phrase for what in the U.S.we call Intelligent Transportation Systems - everything from vehicle navigation systems to intelligent cruise control night vision.

These days, Telematics is much more narrowly defined: It involves the use of a server to provide wireless information to a remote client such as an Auto PC, a handheld PC, or even a cell phone.Not just any information, but location-based information.Questions such as: "Where am I ?", "How do I get to my desired destination?", "How bad is the traffic?", " Where is the nearest restaurant?", "The nearest gas station offering a discount?".

How big is the market? Well, it's not outlandish to think that one day every vehicle on the road could contain a Telematics client - either installed in the dashboard, or a device that can link to the vehicle when needed, and be taken with the owner when he or she leaves the car.New car and truck sales in the U.S.alone are nearly 20 million per year, and there are about 200 million vehicles on the road.

How much will consumers pay for Telematics Services? Nobody knows yet, but because this is the U.S., safety, security and roadside assistance are thought to be the enabling Telematics applications (in this context, understandably, one avoids the phrase "killer app").Several market studies show that many car drivers will pay $10 to $20 per month for a bundle of applications including roadside assistance,automatic airbag deployment notification, traffic information, and route guidance.

OnStar and ATX are the leaders in Telematics, with perhaps 300,000 vehicles using their services.OnStar provides services to GM owners and soon Honda; ATX provides similar services to Ford, Nissan and Mercedes.AAA Response has just launched a roadside assistance service for its customers.

So far, safety and security are still the key offerings, even though OnStar offers route guidance and concierge assistance through its advisors.GM is looking at a Telematics link as a way of building a better relationship with its customers, in addition to developing a source of recurring revenue.Most automakers are exploring the same notion.

Virtually every GM vehicle will soon have OnStar available, and OnStar has committed to equipping up to a million additional vehicles with the service during model year 2001.

Other players, such as Excite and Yahoo are also positioning themselves for this market.AOL has launched a service called AOL Anywhere and has purchased MapQuest to provide the geographic component.There's a good chance that the auto industry and the portals may collaborate as much as compete.Ford and Yahoo have already forged an alliance.

In fact, MapQuest and its competitor, MapBlast, which is owned by Vicinity, and a third mapping site, MapsOnUs, could be said to already be in the Telematics business.MapQuest is the clear leader, but the three sites together pump out nearly 20 million maps and perhaps 10 million sets of directions each month.Most get printed out from desktop machines, but they can be saved to PDAs.Directions from all sites can be accessed over internet cell phones, though still not very conveniently.

The wireless carriers are still pondering their role in Telematics.Sprint, Nextel and AT&T Wireless are all offering Internet access over their cell phones, as will Verizon, a new wireless Network formed by GTE, Bell Atlantic, PrimeCo and Air Touch Communications.Potentially, that could make any website a potential Telematics provider.Again, alliances will be the rule.Ford and Sprint are cooperating and OnStar has forged a deal for nationwide cellular coverage with GTE, Bell Atlantic, and presumably, its offspring, Verizon.

Sprint offers several Web sites on its Internet phones, including Amazon, Yahoo, and for directions, Go2Online, which is powered by RouteMAP IMS, ESRI's routing server application.In addition to directions to a desired destination, the site can sorts points of interest by proximity and provide text directions.A rudimentary map displayed on the phone is in the works.

There are dozens of other entrants, including Vicinity, which has recently launched a service called BrandFinder, allowing its wireless subscribers to find the closest merchant of whatever type they are seeking - and possibly vice versa.

InfoMove is a Seattle based integrator of information which is launching a server-supported Pocket PC-based Telematics client that can be connected to the vehicle when it's in use or removed when the driver leaves the car.InfoMove is creating a variety of relationships with content providers.

And not to be overlooked are the first-tier automotive suppliers.Delphi recently signed a pact with Palm, and plans to have an in-vehicle Palm available by the end of the year.At the recent ITS America meeting, Siemens displayed a Palm wirelessly connected to a server providing directions and traffic information.

A number of companies have concentrated on building servers to support wireless thin-clients.These include Telcontar (my company), which supplies the software for Vicinity's server, as well as wireless navigation software.Formida recently launched a mapping service on Japan's J-phone.Webraska, a French company is also seeking to make maps and directions available over cells phones and other thin clients.

Telematics is potentially a huge market for GIS services, clearly in a very youthful phase.Many very large companies are placing their bets here.Most of the market's structure is as yet undetermined: who will solve the massive pressure put upon central databases, what bandwidth will be required for practical use, what form of pricing will consumers accept, and so forth.In the coming months we'll be watching developments on these and other questions.

Published Tuesday, June 6th, 2000

Written by Mike Sheldrick

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