OEMS will Need to Vie with Telecoms and Content Providers for Telematics Revenue

By Tracey E. Schelmetic December 05, 2012

If you read any of the year end technology wrap-ups that are no doubt forthcoming as December continues on, one technology you’ll likely find at the top of nearly ever list of technologies to watch will be telematics.

Telematics, of course, is the blend of technologies that helps turn your car into a hotspot of communication, entertainment and navigation. Services such as OnStar and others help drivers find businesses and addresses, help them in times of emergency, get them back into the car when they are locked out and even help them browse the Internet or send and receive messages. Speech technology, blended with GPS, entertainment content and advanced mobile device technologies are helping turn our cars into moving homes or offices.

Telematics are becoming big business: not just the hardware itself, but the service revenue that occurs when we purchase something from the car. Right now, there is a bit of a war going on among the various stakeholders with their fingers in the pie of telematics. The original equipment manufacturers (OEMs), which put the hardware in the car, wireless carriers and content providers are all beginning to vie for what has been estimated to be $4 billion in telematics revenue over the next two years.

A new report has focused on how OEMs can be sure to reap a significant share of telematics revenue. Strategy Analytics Automotive Multimedia and Communications’ (AMCS) report, “Monetizing Telematics Service Revenues,” has found that revenue from services is just one benefit OEMs can achieve with telematics.

“OEMs can not only create recurring revenues, but also reduce costs, and increase consumer satisfaction. Revenues from services are important but just one of many drivers behind the growing number of OEMs launching telematics solutions,” said John Canali, senior analyst with Strategy Analytics, in a statement announcing the report.

It will be a matter of competing against some very big players.

“As more OEMs come to market with solutions, we expect a number of different business models to emerge,” said Richard Robinson, director of Strategy Analytics Automotive Multimedia and Communications. “Verizon’s acquisition of Hughes Telematics may prove highly disruptive as the role of the carrier may change. While charging an annual service fee is currently the most popular business model, OEMs, carriers, and content providers should explore how to maximize the benefit of a connected car,” he added.

Find the full report summary here.

Edited by Brooke Neuman

IoTevolutionworld Contributor

Related Articles

u-blox to Support Verizon LTE Cat M1 by End of 2016

By: Ken Briodagh    10/20/2016

In a new release, u-blox, a leader in wireless and positioning modules and chips, announced plans to launch a module supporting Verizon's Category M1 …

Read More

Qualcomm Appoints Alex Rogers as EVP and President of QTL

By: Ken Briodagh    10/19/2016

Qualcomm Incorporated has announced its promotion of Alex Rogers to Executive Vice President (EVP) and President of Qualcomm Technology Licensing (QTL…

Read More

Qualcomm Announces Broad Ecosystem Adoption of LTE M1/NB-1 Modem for IoT

By: Ken Briodagh    10/19/2016

Qualcomm has announced that its LTE Cat M1 and NB-1 modem has scored some big design wins among the IoT's leading module OEMs. These designs are an ad…

Read More

Nokia Brings Virtual Network Management to Small Mobile Networks

By: Ken Briodagh    10/12/2016

Nokia has now announced that it is activating an advanced virtualized mobile network management system ideally suited for the IoT, called Nokia NetAct…

Read More

Faraday Offers PowerSlash on UMC Ultra-Low-Power IoT Platform

By: Ken Briodagh    10/12/2016

Faraday Technology Corporation, an ASIC design service and IP provider, and United Microelectronics Corporation (UMC), a semiconductor foundry, have r…

Read More