Telematics Market

Telematics Market Essay Sample


Telematics is an emerging industry that offers location-based voice and data communication tools. In other words, telematics provides “smart” information, tailored to where customers are and to what they are doing, providing enhanced security, navigation, and convenience to mobile consumers and providing real-time data to automakers on how their products are performing. Telematics is an up-and-coming market of automotive communications technology that combines wireless voice and data to provide location-specific security, information, productivity, and in-vehicle entertainment services to drivers and their passengers.

Telematics refers to the convergence of wireless systems, global positioning, and onboard automotive electronics. The vision of the industry is to enhance driver and passenger safety, productivity, and security through communication, information, and convenience services. Telematics systems provide interaction between the vehicle and an outside service provider. It is a powerful new tool in CRM (Customer Relationship Management). Whether it’s a case of roadside assistance, directions, emergency help, or information about the nearest ATM, intense brand loyalty is created when a customer can access information right from his vehicle.

Telematics is the combination of telecommunications and computing, but the most common meaning is information services delivered via a communications network. Automotive telematics is the wireless exchange or delivery of communication, information and other content between the auto and/or occupants and external sources. Telematics span multiple industries and the meaning has numerous interpretations. Each industry and segment may have different views of what telematics is and expectations of what telematics will do in the future. The list below shows some of these perspectives:

• Telematics is a delivery platform for customized or location-specific information such as weather reports, news, sports, and business • Telematics is a delivery platform for real-time traffic information that can save the driver time and can lower traffic congestion • Telematics is a safety and security system that provides emergency or roadside assistance to motorists • Telematics is an enabler of in- vehicle communications (such as voice, messaging, email) using, hands-free operation, voice activation, and text-to-speech technologies. • Telematics is an enabler of remote diagnostics/prognostics that can spot vehicle weaknesses, defect, or improve vehicle reliability and repair

• Telematics is a customer relation management (CRM) tool for auto manufacturers and their dealers • Telematics will facilitate automatic motor vehicle event data recorders that deliver real-time crash information to government agencies, healthcare organizations and public safety agencies • Telematics can bridge and synchronize user’s information between the auto, home and office • Telematics can improve accident response time for public safety agencies • Telematics will provide data that will lower auto insurance losses from theft, fraud and crashes • Telematics will become an important part of future intelligent transportation systems (ITS)

Telematics is a combination of Information Technology and telecommunications, allowing the provision of on-line information in all areas of public and private administration. Transport Telematics can be applied to road, rail, air and sea transport to improve safety through the provision of on-line information to drivers in their vehicles and by equipping the vehicle with computerized systems.

Uses of Telematics

The following figures demonstrate the use of Telematics in automobiles:


Telematics Industry Impact

The following figure demonstrates the impact of Telematics Equipment & Service Industry:

The telematics revenue opportunities have received the most attention in the high-tech and automotive industry because the telematics market potential is in the billions of dollars. The impact on the automobile’s driver and passengers have also received its fair share of attention—including the main potential negative aspect: driver distraction.

However, other potential telematics advantages have not received enough attention. The cost savings, cost avoidance and improved efficiency potential from telematics have received little focus. The reason is simple: it is very difficult to quantify the potential of cost savings, cost avoidance and improved efficiency. It is very likely that the indirect benefits of telematics far surpass the telematics revenue opportunities.

Technology Trends

The automotive telematics industry will be driven by technologies from the computer, wireless telecommunications, automotive, Internet and content service industries. The key trends are summarized in the next table:

Automatic Collision Notification. ** Event Data Recorder. *** Virtual Private Network

Telematics will be taking advantage of several main automotive trends. A continued drive towards improved safety and security is currently the most important reason for telematics adoption in the USA, although this is becoming increasingly important to European and Japanese markets. More safety features are on the horizon ranging from crash data recorders to collision avoidance systems.

The second trend is the replacement of mechanical systems by electronics systems, which is called drive-by-wire or X-by-wire. Telematics functionality will expand, as mechanical systems become electronic systems. Intelligent vehicle systems, which use cameras, radar and other sensors with lots of computer processing power, will warn and assist drivers entering dangerous driving conditions, or exceeding certain driving parameters. The telematics system is likely to be the command and control system and user interface between the driver and these complex computer-based systems.

Global Telematics Industry Status

Telematics is the first addressable convergent IT market opportunity. Major players in computer systems and software (Microsoft, Sun Microsystems) and telecommunications (Motorola, Nokia, Ericsson), as well as automakers, consider telematics as one of the most exciting developments in the auto industry. One of the most common Telematics systems on the road is the global positioning satellite navigation system. This system is available in many different car models, but is most commonly provided in high-end luxury vehicles. The following companies include Telematics systems in their vehicles, either as an available option or as a standard feature: General Motors, Mercedes-Benz, Peugeot, Lincoln, Jaguar, BMW, Infinity, Toyota, Fiat, Honda, and Mazda.

Europe, Japan and the United States are the three prominent regions using telematics. Japan currently has a sizeable lead in telematics spending, accounting for $5 billion of the $8 billion market. However, in terms of technology, the United States and Europe are leading Japan. Alliances and relationships among service providers, content providers, telecommunication companies, automotive OEMs, and electronic hardware providers are producing the network coordinating telematics content and services.

Current uses for telematics is primarily for safety, security and navigation. Future uses may include in-vehicle Internet access, in-vehicle e-commerce, location-based commerce and advertising and remote diagnostics. Some industry leaders predict that within five years nearly every new car will be equipped with a telematics system. Market researchers expect compounded annual growth rates ranging between 10 percent to more than 30 percent for the next five to ten years. Driver information systems — which are only a part of the telematics market — are expected to reach four million units a year by 2005.

There are hundreds of companies all vying for a piece of the emerging vehicle telematics industry including the major auto manufacturers. GM is the U.S. leader with OnStar – the leading telematics service provider (TSP) that has focused on safety and security. OnStar is well established on many GM vehicles and has successfully licensed its services to non-GM brands including Honda (via Acura), Audi, VW, Toyota (via Lexus) and Subaru.

OnStar is the clear worldwide leader in telematics with approximately 2M users in the U.S. – more than all other TSPs in the world combined! OnStar now claims to be adding over 100K customers per month. OnStar is available in Europe in Opel-brand vehicles and is launching a new portal service that may be licensed to other OEMs for the European market. OnStar is also developing new systems and services for the Japanese market.

The next table shows the worldwide auto brands that come with telematics either as a standard or an optional feature:

ATX Technologies is a clear second to OnStar in the U.S. market. ATX uses a different strategy from OnStar—not building its own brand name, but is an outsourcing company that delivers telematics services for auto manufacturers. ATX was a pioneer that delivered the first telematics service for Ford in 1996.

Today ATX delivers telematics services for various luxury auto manufacturers—Mercedes, Infiniti, Jaguar, and most recently BMW. Mercedes is the largest customer. In 3Q2001 ATX had over 300K telematics customers. Several other TSPs are developing new services for the U.S. market including Cross Country Automotive Services, and Response Services (AAA). Wingcast was a contender until June of2002 when Ford announced it was no longer going to fund the operation.

In Europe, Tegaron is a TSP who provides services to customers of Mercedes, Audi, Volkswagen, and Citroen. Tegaron services focus mainly on safety and security and dynamic traffic data using floating car data. Tegaron services the German market but has mentioned a pan-European service through alliances. Another provider of telematics services in Europe is Targa Services, who provide emergency and concierge services to owners of Fiat, Alfa Romeo, Peugeot and Lancia. Targa offers multilingual services to motorists travelling throughout Europe even though its call center is based in Italy.

Worldwide Telematics Market Summary

The telematics industry is in its infancy, but the market started its take off in 2000 in the USA. The telematics market is starting to take off in Germany, but needs a few more years of development in other European countries. The Japanese telematics market has been focused on navigation systems, but telematics services are expected to become significant in 2002 or 2003.

In 2001 nearly 2M telematics systems were built into autos, which accounts for 3.5% of all autos sold. In the USA nearly 11% of autos were telematics-enabled in 2001. The U.S. accounted for over 90% of all telematics-enabled vehicles sold in 2001, but the U.S. share will drop rapidly as telematics in Japan and W. Europe takes off in the next five years.

Telematics-Enabled Vehicle Sales

By 2007 over 42% of all autos sold in the USA will come with telematics systems for a total of 7.6M units. Worldwide telematics-enabled autos will reach nearly 20% of all autos sold in 2007. The next figure shows the growth of telematics-enabled vehicles sales in the USA and worldwide. Worldwide telematics-enabled auto sales will grow from over 1.9M in 2001 to over 12M in 2007 for a compound annual growth rate of 36%.

Telematics-Enabled Vehicles Sales (in thousands)

Despite the rapid growth of telematics-enabled autos, it will take a long time until all vehicles in use have telematics systems. The next table shows the growth in share of all autos with telematics. Currently only 0.4%+ of all autos in use worldwide have a telematics system with the USA topping 1.4%. By 2007 over 12% of all USA autos in use are projected to have telematics systems while over 5% of worldwide autos will be telematics enabled.

Telematics- Enabled Share of All Vehicles In Use

Due to the long economic life of autos, U.S. telematics-enabled autos will not surpass 50% of all autos in use until about 2015. By 2025 virtually all U.S. autos in use will have built- in telematics systems. The telematics replacement cycle will take 3-5 years longer in W. Europe and Japan and 5-15 more years in other regions.

Telematics-Enabled Vehicles In Use (in thousands)

Automotive telematics service is a substantial opportunity that in 20 years could be similar in size to the current cellular phone industry. The U.S. cellular industry revenue exceeded $52B in 2000. If there are 200 million U.S. autos with telematics services in 2020, a monthly service fee of $20 per user will give a yearly revenue stream of $48B. The worldwide telematics industry is likely to be 2-3 times larger than the U.S. market.

Source: Telematics Research Group, Inc. -April 2002

Global Telematics Market Scenario: 2010

Telematics-enabled vehicles will grow dramatically in the next decade and will form a “telematics network” that is a large opportunity for services and applications. It is useful to give some perspectives on how the “telematics network” will compare with the other main networks of the world.

The next table compares the telematics network with the other major networks and summarizes a market scenario for 2010:

Automotive Telematics Scenario: 2010

Current Outlook and Future Trends

Today, Telematics systems offer drivers emergency and roadside assistance, air bag deployment notification, navigation, remote door unlock, vehicle security notification and stolen vehicle tracking services. Futurists see the car as an infotainment platform. According to their opinion, cars will essentially differ in the type and quality of information services provided, involving a significant shift in the core competence of the car manufacturers. New interfaces would rely on voice recognition and, more generally, on multi-sensorial output channels. An intelligent system would filter and elaborate information according to location, inclinations and actual workload situation of the driver.

Telematics is fostering a new battle among automakers in Europe. Annual revenues from telematics equipment sales in Europe will be over $2.5 billion by 2006, according to a new study from The Strategis Group. Thanks to the development of standardized and increasingly capable equipment and services, the overall number of original equipment manufacturer (OEM) and after-market devices sold each year is expected to rise from a total of 770,000 units in 2001 to 8.7 million units by 2006 according to the report, European Vehicle Telematics: Technologies, Value Chain and Market Entry Strategies. Europe’s five largest automotive markets (Germany, Italy, France, UK and Spain) are expected to account for 84% of these sales by 2006.

OEM and Aftermarket Telematics Device Sales (millions), Top 14 European Markets, 2001-2006

|Year |2001 |2002 |2003 |2004 |2005 |2006 | |OEM |0.46 |1.03 |1.88 |3.02 |4.63 |6.66 | |Aftermarket |0.31 |0.52 |0.78 |1.12 |1.54 |2.04 | |Total |0.77 |1.55

|2.67 |4.14 |6.18 |8.70 |

Source: The Strategis Group, Inc.

Another report from international marketing consulting company Frost & Sullivan valued the European telematics market for systems and services at 1.03 billion Euros in 2000. Frost & Sullivan forecasts the market will grow steadily until 2004 when most volume automakers will launch affordable telematics systems across the range, accelerating growth and propelling revenues to a staggering 8.55 billion euros in 2007.

The study examines the two main areas of the emerging automotive telematics market: hardware systems and applications and services. Hardware systems hold the biggest share of the market at this stage, bringing in around 82 percent of revenues in 2000. However, Frost & Sullivan predicts this will drop to 42 percent in 2007 as services take over the dominant position.

Source: Auto Industry UK

Frost & Sullivan expects that the number of vehicles fitted with telematics systems will more than double between 2003 and 2005 from just over 4 million to 8.67 million, reaching 18.76 million by 2007. Key markets expected to dominate the European market are Germany, Italy, France, and the UK. The greatest sales of Telematics systems are in Germany and the United Kingdom, where central response centers and digital mapping systems are well established. In addition, their high-end auto manufacturers have been quick to incorporate Telematics technology. Other European countries have not adopted Telematics at the same rate.

The market potential is unlimited as significant growth in the industry creates valuable opportunities for all the companies in the telematics value chain. However, there are also numerous challenges for companies, unlocking the value of telematics for end-users in terms of desirable applications and services. For example, the safety and security applications favored by US consumers have not been primary drivers in Europe where navigation applications have a higher value proposition


The in-vehicle environment, which features LCD/TFT screens rather than a WAP browser, can offer the perfect environment for content-rich multimedia services. The Strategis Group believes there will soon be a blurring of the divisions between the various mobile information devices available to drivers — telematics systems, navigation systems and mobile communications devices will become increasingly intertwined to provide the consumer with a unified communications and information solution.


In Europe, current users of telematics systems total about 80,000. Europe’s largest telematics-service provider, is Tegaron Telematics GmbH, which is jointly owned by DaimlerChrysler and Deutsche Telekom. Tegaron supplies systems to Volkswagen and Renault as well as to DaimlerChrysler.

However as the Internet’s impact reaches the car, with an increase in wireless bandwidth and wireless information devices becoming more popular, the sector’s growth is set to surge. There will be more than 12 million European drivers subscribed to Telematics services by 2004, forecasts UBS Warburg’s European Telematics analyst, Richard Hickinbotham.

Recent studies reveal European drivers are buying more Telematics systems than Americans. The European market has been assisted by the broad reach of one digital cellular standard, GSM. Within the European market, the greatest sales of Telematics systems appear in Germany and the United Kingdom, where central response centers and digital mapping systems are well established. In addition, their high-end auto manufacturers have been quick to incorporate Telematics technology. Other European countries have not adopted Telematics at the same rate.


Experts expect that by 2006, over 50% of new cars produced in Western Europe will have an in-built telematics-capable terminal, with 85-90% of new large/luxury cars being `telematic’. And in revenue terms, the market for in-car telematics terminals will grow from US$7.7bn by end 2000 to US$24.3bn by 2006.

In-Car Telematics Terminals Market

| |2000 |2003 |2006 |CAAGR | |World (Million Units) |4.8 |12.8 |24.8 |29% | |World (billion US$) |7.7 |16.3 |24.3 |19% | |W. Europe (Million units) |1.8 |4.6 |9.5 |31% | |W. Europe (Billion US$) |2.9 |5.6 |8.8 |19% |

Sixteen million new cars are registered in Western Europe each year. According to the Federal Vehicle Registration Bureau, the number of registered vehicles in Germany currently totals some 51.4 million (statistics for July 2000). Ten years ago, the corresponding figure was 42.5 million. Then, roughly one person in two owned a vehicle. Now, two out of every three Germans drive a car. According to a study published by the news magazine Focus, 80 percent of all German households own at least one vehicle.

This trend is reflected throughout Europe: The Federation of the Automotive Industry reports that “citizens of EU countries spend an average of one hour on the road each day, covering some 14,000 kilometres annually.” According to the European Commission, the transportation of passengers and goods in the EU has risen today by more than 40 percent between 1985 and the present day . Those who spend a lot of time in their cars can avail themselves of numerous telematics services as they travel. Solutions, which enhance security and convenience, are in particular demand among the motoring community. These include anti-theft systems, emergency assistance and route planning. The Telematics market in the UK is forecast to rise from £60M in 1992 to £2.3B in 2010.


The telematics market in Europe can be summarized through the following graph: [pic]


Regional Telematics Differences

The U.S., Western Europe, and Japan are the major growth regions for telematics, but the characteristics and issues within those regions are quite different. In the U.S., telematics services that provide safety and security have been the leading application, but new services that provide content and integration of cellular services will pave the way for future growth.

The European market, which lags the U.S. in terms of telematics subscribers, desires access to in- vehicle travel portals as a means of dealing with travel between countries of different languages and cultures. Traffic data and routing information are also very important and new applications such as floating car data improve the accuracy of the data.

The table below shows the Regional Telematics Differences:

Major players in Telematics Industry in UK and Germany

CybIT Ambition

CybIT operates a dedicated telematic and online services bureau and offers businesses customizable packages enabling them to realise the benefits of intelligent transport systems. It is raising GBP3m at 3.5p a share to help implement its sales and marketing strategy. Quoted investment group Billam holds a 43.3 per cent stake in it. Itis

The Aim-listed provider of location-based services to drivers also has an agreement with Minorplanet, which holds a 3.7 per cent stake, for the use of the NavTrack DCU product to supply security, navigation and concierge services. Itis provides travel information to customers, highlighting traffic hotspots, such as roadworks, accidents and breakdowns.

Global Telematics

Global is a market newcomer in 2001. It markets orchid. Orchid uses satellite-based technology to enable vehicle fleet operators to monitor the activities of their entire fleet. It is the only solution to support street level mapping, a facility that enables individual vehicles to be pinpointed to an accuracy of five metres. Orchid units are installed throughout the user’s fleet providing access to a range of telematics-based solutions.

These include vehicle and equipment load tracking, realtime traffic information, emergency services support, vehicle violation alarms, out-of-hours monitoring, in-cab messaging services, verification of driver overtime claims, and construction of route plans. Global Telematics has significantly enhanced the service with the development of, the world’s first comprehensive realtime telematics Internet service. For the first time, allows customers to securely access detailed information on vehicle or consignment locations from anywhere in the world, via the Internet.


Minorplanet already has a strong presence in Spain, and its operations in Holland have turned to profit after only six months of trading. The group is now expanding in Italy, France and Germany. Minorplanet by contrast has opted for the installation of more sophisticated units in vehicles and aims to target the fleet management market. It sells its vehicle management information system on the basis that it will immediately save money for its clients by cutting insurance costs and enhancing fleet efficiency. Aim-listed Minorplanet is arguably the leading supplier of in-vehicle hardware to fleet managers


This is the largest of the telematics companies with market capitalisation of GBP385m and has a network of cameras along all UK motorways and trunk roads, and 11,000km worth of road network covered in Germany. It is rolling out its networks across the rest of Europe this year. With this network Trafficmaster is capable of relaying real-time traffic information to its consumers.


It is still in the early stages of developing its product. It offers turn-by-turn navigation via mobile phones through a tie-in with Itis, and on the top of technology developed by Minorplanet.


Toad concentrates on security systems devices, including a telematics offering called Toad Tracking. It also produces in-car cameras. ComROAD AG ComROAD Aktiengesellschaft, established in 1995, is the worldwide leader for the development and commercialization of telematic networks. Through the integration of globally available technologies such as GPS (Global Positioning System), GSM (Global System of Mobile Communication) and web-based Information systems, the company has created a worldwide network for telematic services which is currently in operation in 30 countries. ComROAD’s range of products includes applications for traffic telematic services (such as security monitoring, fleet management, off-board navigation and road assistance) and the provision of communication, information and entertainment services for mobile use. It has its headquarters in Munich. Mannesmann VDO AG

Mannesmann VDO AG, located in Babenhausen Germany, is the largest single supplier of in-car information systems worldwide with over 16,000 employees. Nearly 80% of its more than 3 billion (DM) in revenues is from OEM business, over 30% from information systems in passenger cars. In many areas VDO is leading in the application of new technologies, especially in driver information systems and new cockpit concepts.

Business And Telematics

Large business users have sophisticated needs and demands for systems that are cost-effective, flexible, secure, automated, integrated, and dependable. Multinational firms typically coordinate production and marketing by means of satellite-based communication systems. Ford Motor Company, for example, has built a transatlantic system of linked computer networks with video-conferencing capability in order to coordinate product development and manufacturing design. The system grew out of earlier networks initiated within Ford of Europe, designed to centralize design and facilitate transfer of CAD/CAM (computer-aided design and computer-aided manufacturing) data among company locations.

While information flows within corporations take place in many forms (personal contact, mail, courier), leased networks offer numerous advantages, such as lower costs, security, and compatibility of computer standards. Most users of leased networks are large multinational firms. Global firms were among the first to exploit telematics, and remain both large users and early users of new technologies. Companies that are large telematics users rate demonstrated reliability, fiber-optic cabling, and ISDN as the most important elements of telecommunications infrastructure in business parks. Telematics gives four new types of opportunity in the field of business information: • Access to large quantities of information

• Access to information of higher quality

• Access to information over any distance, including global

distances • Very rapid access to information

These new opportunities can be exploited to create new processes, new products and synergies where a combination of inputs produces a bigger and better result than would be expected from looking at the sum of the individual parts.

Telematics Applications

The major applications of Telematics can be broken down into the categories described below.

Electronic Mail

Electronic mail – the ability to send messages, documents, databases, audio, image, video and other files is usually the baseline telematics service requirement. Other types of links allow computers to share applications, peripherals and large data sets, but electronic mail (e-mail) forms a common denominator between local and wide area networks of all types worldwide. Using standard voice grade dial-up phone lines, electronic mail has become the principal text communication tool for many professionals.

With further penetration of low cost computer-based audio, still camera and video systems, electronic mail is increasingly being used to transmit these media, singly, or as part of integrated multi-media presentations. Further savings in time and cost are being made because the medium is not limited to one-to-one communication with another individual, but can also broadcast text, sound and images to groups of interested recipients. Up to 100 times faster than fax, e-mail reduces paper consumption, does not require time consuming re-entry of data into the computer and automatically stores the information in a machine-readable filing system for quick reference. As a result electronic mail is usually by far the most used of all telematics functions.

Electronic Conferences

Aside from facilities for sending files and messages directly to another individual, most hosts provide the opportunity to ‘broadcast’ messages to a select group of participants. These can be private ‘mailing lists’ held on the user’s computer, or conference lists held on all participating local hosts. The conference lists are the basis for electronic conferences, which may be made publicly available to anyone with network access, or restricted to a select group – for example a coordinating committee with members spread over a number of local hosts. The sender does not have to know the electronic address of each participant to send them each a message, instead a single message is sent to the newsgroup name, which is then passed on to all other recipients of the newsgroup. Newsgroups are usually based around a particular topic and can last for a short period or proceed for an unlimited time. They can be discussion oriented (effectively replacing physical meetings) or mainly used for announcements and information postings.

Remote Login

Until relatively recently, most conventional information delivery systems used a terminal emulation programme such as Kermit or Procomm to connect to a remote host over a modem/phone connection and then used software resident on the remote host to transfer messages and files and access other available services. This system required the user to be online for long periods of time. With high cost and poor quality telephone lines this method of connection is expensive, unreliable and stressful for the operator. As a result users have rapidly switched to protocol based client/server systems which use the intelligence of the local hardware as much as possible to automate network functions, transparently integrate with locally run applications and maximize efficient use of the telephone lines or other scarce transmission resources.

Dumb terminal software is now mainly employed for remote job control and maintenance functions at operating system level and is rarely used by non-technical workers for basic communications functions. It is still used in some cases for electronic mail where the local host is not able to offer a protocol based service, or if the user’s hardware has restricted ability to run the more sophisticated client based software. Also, terminal software is still required for connecting to some remote hosts for browsing archives of information and database searches, which still use character, based menu systems.

Offline Client Based Communication Systems

Offline software allows the operator to avoid interacting in real time with the host computer – before making any phone calls; the offline software is used to read and prepare messages and files for transmission. When messages are ready, a single compressed file containing all outgoing messages is then automatically created and sent to the host without any user intervention. This method typically reduces the length of the phone call by 80-95% compared to the time taken for a manually controlled session with the host.

As a result, the host system can provide access to many more callers on a single telephone line, and the user spends as little time as possible on telephone calls. Offline networking systems are not restricted to the transfer of messages, documents and newsgroups between users. Electronic mail can also be used to send remote procedure commands to another host offering services such as fax gateways, database lookup and access to document and file stores. Although they can be more time consuming to use, the standard online services described below are usually also available through an electronic mail intermediary. File Access Tools

There are a large number of hosts, which allow public access to their file-stores. Some provide general-purpose tools for computer users, carrying the latest public domain and shareware software, while others provide increasingly specialized data stores on a growing range of scientific disciplines and cultural areas. Regular source lists are published describing available servers and the types of information carried. Also, files can be located by keyword search using publicly accessible servers, which carry databases of the files available on other systems.

Database Access

Commercial database service providers have long been in existence, providing a menu-based interface into their own proprietary databases and database search tools. These services have traditionally been provided via links to the PSDN, but because of the growth of the Internet, most commercial database services have now connected their systems to it, resulting in much cheaper communication costs. Aside from being made available via remote access over the Internet, (using tools such as Gopher, World Wide Web (WWW), Wide Area Information Server (WAIS) and File Transfer Protocol (FTP)) many are also distributed on CD-ROM, on tape, or as updates sent by electronic file transfer.

World Wide Web

World Wide Web (WWW) is the most recent and most rapidly penetrating system for wide area information access. WWW based information servers provide the user with a multimedia interface for access to text, pictures and sounds. A simple ASCII based language called the Hypertext Markup Language (HTML) is used to construct files on the server, which display on the user’s computer through WWW client software usually called a Web Browser. The ‘pages’ displayed may contain highlighted references to other documents, sounds or images stored locally, on remote Web servers, or other newsgroup servers and file servers. By selecting one of these highlighted areas the user is transparently connected to the source of the information, which is then displayed by the appropriate application running on the client computer (such as a text editor, sound card driver or moving image player).

As a unifying and integrating force for simplifying access to a diverse range of information sources and access tools, WWW has attracted the attention of most information providers. Transaction processing and encryption is being built into the next generation of Web browsers so that commercial trade can take place through browsing of WWW based catalogues. WWW clients operating on the remote host can be accessed through dumb terminal software but in general a graphical environment is needed to exploit the full potential of the tool. Also, high bandwidth links are necessary if the graphical and sound capabilities of the system are required. Even at 14.4 kbit/s, small pictures and sound files can take long periods to download, especially if they are being retrieved through an overloaded international link.

Directory Services

As yet there is no universally agreed system for providing directories of the users and services of electronic networks. There are a variety of competing standards for user directories and there are a number of lists of electronic resources maintained by volunteers who circulate updates via the newsgroups. Because of the current lack of standardization, as well as the rapid growth of the worldwide electronic network, only small portions of the online users are recorded in the various available directory services. As a result, there is no readily available client software and finding e-mail addresses can often be unsuccessful. Certain networks of users do, however, maintain lists of their members, which can be obtained from the network administrators.

Fax Services

Most modems being distributed today are capable of sending and receiving faxes. Users with fax modems may send word processing documents and other files directly to a fax machine without requiring time consuming printing and feeding to a separate fax machine. Many local hosts also have a fax modem connected to their electronic mail delivery software, allowing the sending of faxes by e-mail. These ‘fax-servers’ send confirmation of delivery messages and offer a number of advantages for the user: • Fax services are accessible to those without fax machines or fax modems. • Sending electronic mail is much faster and cheaper.

• The local host can manage a mailing list of multiple fax numbers and/or other electronic mail addresses, allowing the user to send a single electronic mail message and have it converted to multiple faxes and messages at the remote end. • E-mail sent to the fax server can be automatically re-routed (least cost routing) to another fax server closer to the final destination, minimizing long distance charges for the slow fax call.

Video and Audio Services

Broadcast television and radio are well-established communications media, which have until recently required complicated and expensive transmission equipment. With decreasing costs of hardware and satellite technology combined with growth in available bandwidth from data networks, television and radio are beginning to move toward the era of ‘personal broadcasting’ where anyone can set up an audio or video connection with another individual or with a larger group. These developments bring multimedia video communication and educational tools into the practical grasp of a whole new range of institutions and individuals who could not previously afford to produce broadcast quality materials.

Commercial Transactions

Applications for automating the purchase of goods and services have traditionally centered around Electronic Document Interchange (EDI) based systems. While most major banks and other commercial transaction intensive businesses have begun to implement EDI, it is not in appreciable use elsewhere. The commercial interest in the Internet is seeing the rapid development of other systems for incorporating the necessary authorization and encryption protocols into popular data access applications such as the World Wide Web.

Making use of this system, commercial companies have launched Digicash and NetCash which are basically banks run over the Internet. Funds are deposited in the bank by the user and Digicash enabled applications can pass instructions to debit the user’s account in favour of the supplier. The legalities of these transactions have not been tested in the courts, and electronic mail messages are not yet widely accepted forms of official communication. However, methods for ensuring secure transmission of messages between users and for sender verification are available although not yet officially standardized.

Major Developments in Telematics

According to Forrester the developments will be in four tiers of telematics services:

Tier One: Existing and stand-on-line services. These include videogames, DVD playback, turn-by-turn directions, and satellite radio that work without two-way connections.

Tier Two: Basic telematics bundle over today’s GSM networks. Navigational directions delivered via voice can be offered as built-in options requiring a GPS receiver and a simple interface.

Tier three: An advanced telematics bundle due in late 2002. A full suite of navigation and information services over GPRS networks could offer in-vehicle displays and personal Internet radio.

Tier Four: An entertainment bundle in five years. Streaming films and downloadable on-line games will eventually be offered, but slow UMTS rollouts may push such offerings to the end of the decade. In addition, Forrester analysts examined existing European telematics offerings from the likes of Mercedes-Benz, Renault, and BMW against the four tiers.

With respect to the emerging telematics services, the research firm sees basic telematics ruling the road for the next two years, but in 2003 advanced telematics services based on GPRS will begin to gain critical mass.

Over the next five years, Forrester expects to see mobile operators vying for partnerships with auto manufacturers in order to expand revenue channels; mobile discount coupons will move from the handset into cars; and luxury vehicles will have a heads-up display that projects information onto the inside of car’s windscreen.


Functionality – Now and In-Future

In the short term, automobile industry intends to provide value-add services like gathering maintenance information about the vehicle and offer diagnostic information to drivers, besides providing weather and traffic information. They are initially tying it to driver’s safety requirements – maintenance, airbag deployment and related information but medium term objective is to connect to the Internet and then start providing air reservation, cancellation and rebooking services. Location-based content is an add-on to this initial service.

However, a more exciting future scenario is, when you are driving on the highway en-route to the airport and your car has an engine problem. Completely unknown to you, your on-board computer sends a diagnostic alert to the maintenance center of the car manufacturer. There, a service representative discovers an engine timing problem and has a temporary software fix the problem.

The service representative finds the cellular number of the car from its database, calls the driver, advises him/her of the problem, and gets permission to perform the temporary fix on the fly. After providing partial relief to the driver, the service center suggests that the driver should take the car for permanent checkup at the closest service center. Meanwhile, the driver communicates with the airline through his/her computer, gets re-booked on a later flight. All this happens though a voice interface to the in-car computer mounted on the dashboard. Technology components for all of these functions exist today (in 2001), only the infrastructure is not in place.

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