May 14, 2001 Column By Raj Desai
Automotive Industry Launching New Form of e-Business with Telematics
(By Raj Desai Director, IBM Worldwide Telematics Solutions)
The automotive industry is at the center of a rapidly emerging new field of e-business known as telematics. The telematics concept aims delivering a wide range of information to automobile drivers and passengers through wireless network computing.
Recent advances in wireless communications bandwidth and the tiny computers embedded in automobiles are making it possible. Consumers will begin seeing the systems in high-end 2002 models, and they are expected to be widely available by 2005.
From emergency and roadside assistance to information, entertainment, navigation aids, voice-activated e-mail and remote diagnostics of mechanical problems, the world’s major automotive manufacturers are hard at work on innovations that will fundamentally change both the driving experience and their companies’ relationship with customers.
Ford, GM and DaimlerChrysler have all created new e-business divisions to manage their telematics programs, and every major automotive manufacturer has announced plans to introduce an e-business service to their vehicles in the next few years. The new services will create important new sources of revenue for automakers while giving them their best opportunity yet to build an ongoing, long-term relationship with their customers.
Based on announced plans by automakers, as many as 25 million automobiles will be enabled with telematics by 2006. Strategy Analytics estimates the retail market for telematics at nearly $23 billion by 2006, and Goldman Sachs estimates the total market for both systems and services at more than $100 billion.
The automakers won’t get all of that business, to be sure. Portable device manufacturers such as Motorola and Delphi will claim part of it, along with network delivery infrastructure providers like AT&T and Vodafone, content aggregators like America Online and Vivendi, and service providers like ATX Technologies and Mannesmann/Passo. As GM has demonstrated with its OnStar system, however, the automakers have a major role to play.
IBM anticipates the development of an entire network of industries around telematics. Government agencies will develop options for electronic toll collection, dynamic traffic control and emergency vehicle response. Oil companies will get into the act, enabling their gas pumps for short-range communications and allowing drivers to download their e-mail and a movie for the kids at the same time they fill the tank. Insurance companies will offer drivers lower premiums in return for the chance to track their driving habits. Commercial trucking fleets will use the services to make life on the road easier for their drivers, helping to retain top talent.
In short, telematics has the potential to profoundly change the way people live, work and balance the two by giving them the freedom to use mobility in unprecedented ways. Eventually, these systems will even be able to sense driver workload and decide whether to deliver a message now or later, when the occupants are better able to accommodate it. Access also will become universal – the same system that can deliver content to your car will be able to deliver it to your spouse’s car, your PDA, your home computer or your cellular telephone. Depending on where you are, it will be able to decide whether to deliver the message in text, audio or graphic form.
IBM is involved in almost every aspect of telematics, working directly with several major automobile manufacturers and with automotive suppliers including Motorola and ATX. IBM’s products and services include embedded computers, embedded Java, speech and voice recognition products like Via Voice, middleware and infrastructure products including WebSphere Everyplace Suite and WebSphere Everyplace Portal, tools and development environments for content and application providers, and hosted portals and services.
Among the many telematics activities currently being pursued by automakers and others, IBM is participating in:
· DaimlerChrysler Services/Mobility Management, which provides topical tips for travelers about movies, shows, the arts and dining in the areas they visit, along with navigation aids and parking data.
· ATX’s interactive voice recognition/speech response technology, which uses IBM’s Direct Talk voice processing platform and ViaVoice speech recognition technology.
· PSA Peugeot Citroen’s prototype networked car based on Xsara Picasso, Citroen’s intelligent automotive application.
· Projects with DaimlerChrysler, Motorola, Intel and PSA Peugeot Citroen, all of which are using IBM’s VisualAge Micro Edition embedded Java 2 technology.
· Myautogarage.com from ADP, a Web-based service linking dealers with motorists for easier and faster maintenance and management of their vehicles, which is powered by IBM.
· Motorola’s iRadio offering, which uses a variety of IBM products and services to deliver e-mail and custom entertainment options to automobiles through Motorola cell phone technology.
In short, telematics is popping up everywhere, and sooner than you may think. It may even be coming to a car or truck near you.
R.S. “Raj” Desai is director of IBM’s Worldwide Telematics Solutions group. Mr. Desai leads a global team that is conceiving the future of mobile computing and creating the technology to make it a reality. He has been with IBM more than 20 years, helping to pioneer a wide range of technology include ATM machines for banking and scanner technology for retail.
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