Transcript Final Project Presentation - LGO
Telematics and “Connected Vehicles”
Mike Peterson (LFM ’94) Strategy Planning Manager OnStar [email protected]
Telematics and Connected Vehicles
• Definition of Telematics • Drivers • Infrastructure • Current & Future Offerings • Challenges & Opportunities
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Definition of Telematics and “Connected Vehicle”
• A two-way connection to and from a vehicle for data and information transfer • Telematics is typically
not
: – Onboard autonomous navigation systems – AM/FM radio • A telematics system consists of: – Vehicle (cell phone, GPS, vehicle data) – Wireless interface – Back-office systems
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Potential Components of a Telematics System WIRELESS INTERFACE Satellite / Microwave Point – to – Multi-Point CELLULAR WIRELESS CONNECTIVITY Fiber / Cable ENABLED VEHICLE Application Management Content Providers Source: Erik Bue Call Center BACK-OFFICE SYSTEMS CELL TOWERS Telematics – 040109 LFM webcast.ppt
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Markets for Telematics
• Vehicle types – Personal vehicles: cars, trucks – Boats, motorcycles – Work vehicles: mail trucks, semis, Border Patrol, Coast Guard, ambulances • Vehicle owners – Personal – Fleets – Military
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Value Propositions for Telematics
• To consumers – Safety & security – Time savings (navigation) – Increased productivity (in vehicle) • To fleet provider – Optimization of assets (asset tracking, performance monitoring) • To business – Additional data from vehicles (warranty, usage) – Increased vehicle sales (or “price of survival”) • To government – Improved infrastructure management (traffic, tolls)
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There is a significant market opportunity for telematics, if done right.
• Wireless use is growing – – – US wireless industry is $80B (WSJ 7/28/03) 30 M US households will employ data networks by end of 2007 (Park Associates) Intel’s Otellini predicts that 1.5 B PC’s will have wired or wireless broadband connections by 2010 – Cable broadband services posting operating profits of ~60% (CIBC) • Consumers want to be more productive – – Consumers pay $15-100/mth for cell phones & internet service providers Average US citizen spends 541 hrs/yr driving in vehicles (1.5 hrs/day) (NTPS) – 97 M people in the US spend at least 37 minutes commuting in their car every day.
• Automotive industry is highly competitive; features and services which provide a lead are crucial to success
Source: Erik Bue Telematics – 040109 LFM webcast.ppt
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Predictions : Telematics-Enabled Auto Sales 12 10 8 6 4 2 0 2002 2004 2007 2010 USA W. Europe Japan Telematics – 040109 LFM webcast.ppt
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Prediction: Telematics-Enabled Autos In-Use 45 40 35 30 25 20 15 10 5 0 2002 2004 2007 2010 USA W. Europe Japan Telematics – 040109 LFM webcast.ppt
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Current Telematics Services - Consumers
Safety Air Bag Deployment Notification Seat Belt Tension Notification Emergency Assistance Roadside Assistance Security Automatic Theft Notification Theft Tracking GeoFencing Vehicle Status Remote Diagnostics Remote Vehicle Operation Remote Unlock Remote Horn/Lights Information Services Navigation Assistance Points-of-Interest Vehicle User Info Convenience Services Internet Based Services
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Additional Telematics Services - Fleets
Fleet Performance Maintenance Management Fleet Tracking Asset Management Vehicle Information Usage Monitoring Vehicle Tracking Fleet Utilization Customer Processing Paperless Manifest User log book Instant Messaging Job Dispatching
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Examples: OEM telematics offerings
• • • •
Mercedes (Tele Aid): Jaguar (JaguarNet): BMW (Assist):
• • •
Volvo (On Call Plus):
•
OnStar:
$240/yr + airtime to call center $75/yr route support/traffic package $1300 optional integrated phone $400 voice recognition option for phone $2250 + airtime Includes portable phone and voice-activated controls $120/yr $1290 phone req’d for telematics $1800 navigation system req’d for telematics $240/yr Does not offer route support or remote diagnostics $200/yr for safety & security services (airtime included) $400/yr to include information & navigation services
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OEM Telematics Players – Offerings over Time (North America) 1996 1997 1998 1999 CY 2000 2001 2002 2003 Telematics – 040109 LFM webcast.ppt
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Many opportunities exist in the future to enhance current services and create new ones.
• • • Data services – – Software downloads Content downloads Enhanced vehicle diagnosis & repair Expansion into other dimensions of vehicle lifecycle (manufacturing, vehicle development, design) •
Key enablers for future services/growth
– – – – – –
Communications bandwidth Coverage (wireless) Vehicle penetration Vehicle integration (messaging) Reduced costs (hardware, service) Standards (Bluetooth, vehicle messaging)
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There are many “pieces of the puzzle” which create value in telematics.
• Marketing of services (education of consumers) • Integration of services (menu structures) • Integration of equipment into vehicle (human/machine interface) • Connection of vehicles to content (wireless) • Conversion of data into services (back office) • Content providers (vehicle data, entertainment)
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Competition among service providers is seldom one to-one; each player has a slightly different offering.
• • • • OEM-owned telematics service providers (OnStar) Aftermarket devices (LoJack, NetworkCar, Mobile Guardian) Independent telematics providers – retail (ATX, Cross Country) Independent telematics providers – fleet (Qualcomm OmniTRACS, @Road) • • • Voice portals (TellMe, BeVocal, Internet Speech, AOL By Phone) Cell phone voice services (Verizon, Sprint) Auto club services (AAA)
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In addition, each piece of the telematics value chain has its own set of players.
• • • • • • Content – – TeleAtlas, NavTech, MetroNetworks CNN, Disney, ESPN Operating systems (Microsoft, Java, Linux) Vehicle hardware (Delphi, Nokia, Samsung) Voice recognition (Nuance, Speechworks, IBM) Call centers (EDS, GE, Cross Country) Business Operations (Digitas, Acxiom, Sigma) • • • •
Issues in partner selection: Volume capability Support capability (established firm?) Exclusivity Flexibility
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Finally, there are a variety of wireless technologies that can be applied to telematics.
• • • • Cell (Analog, CDMA, GSM; voice, data/SMS) Short-range communications (Bluetooth) Medium-range communications (802.11) Satellite communications (Boeing Thuraya, XM Radio, Sirius) • • • •
Issues in technology selection: Level of ubiquity Reliability of technology Upgradability Level of control over provider (multiple sourcing)
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Challenges – Hardware/Technology
• • • “Clockspeed” mismatch – Telematics services (1-6 months) – Consumer electronics (6-18 months) – Vehicle development process (3-5 years) – Vehicle ownership lifecycle (6-15 years) Shifts in technology (analog digital) Technology application (client vs. server) • •
Challenges – Societal
Government regulation (FCC – E911) Interface with emergency service providers
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Challenges – Strategic/Financial
• High cost of infrastructure – Investment = control • • Involvement of multiple partners Packaging of services – Wide variety of customer needs/wants – Consumer confusion • Selection of business model – Upfront equipment sales – Service subscription – Grow critical market mass – Operating efficiencies – Licensing/royalties
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Examples of Business Models “In Play”
• • • • • • • • i-Mode DoCoMo: Define platform for 3 rd party software development: monthly revenue from: basic service, data traffic and fee from 3 rd party service providers Microsoft: Create the OS for vehicles that becomes the standard that all future consumer telematics applications must be built off of OnStar: Seed network through factory-installation onboard vehicles purchases Cell Co’s: Compete based on lowest price to service quality ratio TiVo: Charge monthly service fee upfront at a discount Palm/PDA: Define & market hardware & OS; nurture application developers. Make alliances with Cell Co’s.
Dell: Least expensive, custom-assembled modular systems based on commodity components Leverage COTS Components: eg Apple iPod: Over 1M people have been willing to pay $300-500 for the 5-40GB drives.
Source: Erik Bue Telematics – 040109 LFM webcast.ppt
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Parting Thoughts
• Telematics represents a significant but complicated opportunity.
• There are many ways to create value in telematics, many of which have yet to be fully exploited.
• The telematics “industry” is a network of partners across a variety of disciplines.
• The “winners” in telematics, as well as the ultimate potential of the industry, is yet to be determined.
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Open Questions (for discussion)
• How does/could your business participate in this space?
• What needs to happen to unlock the full potential of telematics?
• What service domains will be most important in the future?
• What business model(s) do you think will be most successful?
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Appendix – OnStar Overview
OnStar’s Beginnings Employees Subscribers Hardware Services Database 1996 18 1 Phone 8 600K Advisor Seats Distribution 6 1,500 Dealers Brand Recognition 1% 2002-3 436 2M+ 5th Generation 15 7M 1,000+ Factory 90% Telematics – 040109 LFM webcast.ppt
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Portfolio of Core OnStar Services Safe & Sound
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Automatic Notification of Air Bag Deployment
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Emergency Services
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Roadside Assistance
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Stolen Vehicle Location
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AccidentAssist
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Remote Door Unlock
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Remote Diagnostics
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Online Concierge Directions & Connections
All Safe & Sound services plus:
•
Route Support/Directions
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Information/ Convenience Services
•
RideAssist Luxury & Leisure
All Directions & Connections services plus:
•
Personal Concierge
•
OnStar MED-NET Telematics – 040109 LFM webcast.ppt
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OnStar Personal Calling
• • • • • Embedded in vehicle Hands-free, voice-activated interface Pre-paid minutes No roaming, no long distance charges Nationwide wireless network coverage
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OnStar Virtual Advisor Personalized web-based information delivered to the vehicle using hands free, voice-activated interface
Stock Quotes – Fidelity Investments News – – – Wall Street Journal ABCNEWS.com
CNNRadio Entertainment – Disney.com
E-mail Sports Scores/News – – The Sporting News Radio ESPN.com
Weather – Weather.com
Traffic – Metro Networks/Tele Atlas
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XM Satellite Radio XM Satellites Rock Roll Terrestrial Repeaters
• Two Geo-stationary satellites • 1,700 terrestrial repeaters • In-vehicle equipment - Receiver - Antenna - Radio head unit
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