For wireless auto electronics, the immediate future may be Bluetooth
Jul. 14, 2002
DETROIT (AP) - Very rarely has the death of a venture elicited as many ``told you so's'' as when Ford Motor Co. pulled the plug last month on Wingcast LLC, its attempt to give vehicles all sorts of onboard communications capabilities.
Analysts said the 18-month old venture, which never brought a product to market, was an expensive stab at using outdated analog technology to perform ambitious communications tasks known as telematics.
Now the automotive telematics industry is looking to a new savior: the short-range digital wireless communications standard known as Bluetooth.
A Nordic invention named for a 10th-century Viking king, Bluetooth allows various components of telematics systems to ``talk'' to each other through radio frequencies, allowing a driver to check e-mail, get directions, call for help, or even unlock the car if the keys are left inside.
With a 30-foot range, Bluetooth makes it possible to operate a cell phone with voice commands instead of hands -- even from outside the vehicle. The technology is already being used by consumers to network cell phones, handheld computers, laptops and printers.
Using Bluetooth in the car, a cell phone could sit in a driver's pocket or cup holder instead of a special cradle that would have to be replaced upon changing phones.
The technology would allow a cell phone to work as a modem, downloading movies, music and navigation information and funneling it into the car's onboard computer and onto displays.
The current leader in auto telematics is General Motors Corp.'s hard-wired OnStar system, which doesn't use Bluetooth.
That's fine with DaimlerChrysler AG's Chrysler Group, which this fall will begin offering Bluetooth system called UConnect as a dealer-installed option at a suggested retail price of $299 plus labor. A second version, to be offered as a factory-installed option will be available in early 2003.
``It has to be about flexibility, simplicity and affordability, or telematics will continue to struggle,'' said Chrysler Group telematics chief Jack Witherow.
The initial version of UConnect will offer voice dialing and an audio address book capable of storing up to 32 telephone numbers. Other yet-to-be-announced features will be available in the factory-installed version.
Designed to handle up to five phones per car, the services will appear as charges on a monthly cell phone bill.
Chrysler's move represents automakers' growing realization that developing telematics technology and services is best left to companies specializing in those fields.
``We think we ought to stick to our core strengths,'' said Witherow.
Such thinking prodded Ford to abandon Wingcast, a joint venture with Qualcomm Inc.
``We're still committed to telematics, but how we'll make good on that commitment has changed,'' said Ford spokesman Paul Wood, adding that the company has not yet settled on a new plan.
The telematics industry is growing at just two to three percent a year, according to a study by Cap Gemini Ernst and Young, but the potential is much greater.
Globally, the telematics market for hardware and subscription services will grow to $27 billion by 2005, from $3.6 billion in 2000, the study predicts.
In 2001, Americans bought 1.85 million vehicles equipped with some sort of telematics, according to a report released in April by the Telematics Research Group. That number is expected to grow to 2.6 million next year and 7.6 million by 2007, the report said.
Besides wireless downloads, Bluetooth will allow the car's components to ``speak'' to the driver.
For example, an alternator that may be six months from failing could trigger the telematics system to advise the driver and automatically call the dealer to order a replacement, said Jim Geschke, who runs the telematics business for automotive supplier Johnson Controls Inc.
One of the reasons Ford says it was caught off guard about recent problems with tread separation in Firestone tires and related accidents in its vehicles was an ineffective system for gathering accident and warranty claim data.
Robust Bluetooth telematics might have caught the problem in time, said Forrester Research's Mark Dixon Bunger.
For now, OnStar is the standard bearer in auto telematics with more than 2.5 million subscribers, according to Don Butler, vice president of OnStar planning and business development.
Launched in 1996, OnStar is not turning a profit despite its adoption by several Japanese and German automakers. Experts expect OnStar, which uses wires along with built-in wireless connectivity, to be eclipsed by Bluetooth-fueled systems.
``Customers want some cell phone connectivity but they don't want to worry about wires and microphones,'' said Mike Wujciak, an analyst with Cap Gemini Ernst and Young.
Butler insists his service's technology is more reliable than Bluetooth, because you don't depend on a portable phone that can be lost.
Chrysler's UConnect, however, takes the automaker out of the cell phone and service-providing business.
Instead, Chrysler hopes to earn revenue from the sale of Bluetooth units and perhaps receive a fee for each customer it refers to an outside service provider.
``It will be the flexible system that's going to win in the end,'' said Wujciak.
Yet while Bluetooth-based systems might provide more flexibility, the fact that OnStar counts more subscribers than all other telematics providers combined could make it difficult to overtake.
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