Despite predictions that Web access would be a highly sought-after feature of telematics services, today’s market is demanding more and better safety and security services such as roadside assistance, remote door unlocking and navigation. Leading the way, much as it has since its inception in 1995, is General Motors Corp.’s OnStar, with just more than a million subscribers in the United States.
Instead of spending time and money on developing Web access to the car, telematics providers are focused now on the customers, and how to best manage them, according to Gary Wallace, vice president of external affairs at ATX Technologies Corp.
“The biggest thing right now is probably customer growth and how to handle it, how to manage it and how to retain it. If you were to walk through these halls, you’d probably be surprised the talk isn’t about how customers are going to access the Web, its about CRM (customer relationship management). It’s how to capture data from the car, capture data from the dealer … and using data so the subscriber gets what he or she wants,” Wallace said.
Customers are, of course, a source of revenue, and in the case of telematics, wireless carriers and car manufacturers have the unique advantage of being able to drive specific applications to their customers over the life of a vehicle, almost guaranteeing a steady revenue stream if handled well.
OnStar’s per-year subscription for basic safety and security features starts at $200, and if the customer chooses OnStar’s latest feature, called personal calling, he or she will be billed for airtime minutes as well. Personal calling allows a subscriber to make hands-free calls from their car using the embedded telematics equipment. Rod Egdorf, vice president of wireless at OnStar, said the customer prepays for a bucket of minutes and refreshes them as the minutes are used up.
Personal calling is growing in popularity along with OnStar’s virtual advisor, which allows customers to use their airtime minutes to send e-mail, look up stocks, get the weather forecast, etc., all using voice-recognition technology, which will be essential in all future telematics offerings, Egdorf said.
Still, the bread and butter services in the industry are safety and security.
“That hasn’t changed since day one, and I think a lot of people over look that,” said Wallace. “The winner of this game is not going to be how many services you have and how much revenue you’re generating for an OEM or wireless carrier, but initially it’s going to be how many customers you’re retaining.”
A customer-retention idea being kicked around the industry involves insurance discounts for those with telematics-equipped cars. A telematics research report from Bears Stearns analysts Domenic Martilotti and Eric Goldstein said bare-bones packages of safety and security could make huge inroads if it is aggressively marketed with auto insurance policies in addition to traditional incentive packages. This also could help defray some of the recurring as well as initial costs to the consumer, the report said.
Another very likely player in future telematics offerings, and an incentive for customers to buy into telematics, is Bluetooth technology. Bluetooth will leverage vehicle equipment, allowing drivers to hear e-mails and voice mails downloaded to a personal digital assistant or mobile phone, over the car’s speakers, Bears Stearns said.
“Today, with consumers possessing a multitude of personal communication devices, a system that can amalgamate these tools without obsolescence is a must,” said the report.
Egdorf said OnStar is in serious talks with undisclosed companies about how Bluetooth can beef up its product line, but for a while to come, Wallace thinks Bluetooth will be a luxury item, only available to high-end customers.
“The market isn’t ready for Bluetooth. Only 30 percent of people have telematics in their car now,” Wallace said.
