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With the opening of the New York Auto Show late last month, the struggling telematics market got a boost as Wingcast announced it will deploy its telematics service in four Nissan Infiniti vehicles, launching a rival to General Motors' OnStar service.
Wingcast, a joint venture of Ford and Qualcomm, will also be offered in certain Ford vehicles to be announced later this year, a Wingcast spokeswoman said.
Several other aftermarket/OEM related ventures were announced at the Auto Show, including Volkswagen and Nissan's commitment to offer satellite radio service and Pioneer's release of branded car audio systems in the newly announced SCION Toyota line and in two Ford vehicles. (See stories below).
The debut of Wingcast's service comes about 18 months after the venture was first announced. Wingcast will be the exclusive provider of telematics services for the newly introduced Infiniti G35 coupe and M45 as well as the 2003 Infiniti G35 sedan and Q45, with service starting this fall. Wingcast said it will provide both emergency and concierge-operated assistance services including automatic airbag deployment notification, emergency assistance and stolen vehicle tracking. It will also allow hands-free voice-activated calling, call forwarding and voice mail, and navigation and information services such as news, stocks, and weather. Concierge services via live operator will also be provided allowing users to inquire, for instance, where to get tickets to a show, and allowing the user to order the tickets.
Wingcast will be carried over digital trimode service on the Verizon network with pricing to be announced, the company said. The hardware for the system includes a four-button interface, microphone and the car's audio system.
The Wingcast announcement follows recent reports that telematics is not growing as rapidly as previously expected. GM's OnStar recently revealed a higher churn rate than in previous years. A spokesman said only 50 percent of subscribers are renewing subscriptions to OnStar, down from 70 percent in 1999, while published reports indicate OnStar's 2001 renewal rate may be as low as 20 to 30 percent.
A spokeswoman for Wingcast claimed, "OnStar has done a great job of defining the category but what it will take for telematics to take off is wider availability. The average consumer doesn't know what it is. OnStar has GM and Acura but there are a lot of other cars in the U.S. The pervasive thought is that once it is in a variety of cars like Ford, Nissan and Toyota and once consumers realize the functionality of it, it will take off."
She noted that hands-free calling legislation is being considered in 40 states and that 70 percent of cellphone calls originate from the car so that the hands-free dialing feature alone will help popularize the service.
OnStar is currently available on 36 GM vehicles and OnStar claimed to have 2 million subscribers at the end of 2001.
Industry analysts however, say that telematics in general is being hampered by several factors including the lack of a "killer app" incentive. Many consumers do not want to pay a monthly service charge for emergency services that they may never need, industry members said.
"Telematics is not progressing as many would have liked it to for numerous reasons," said Cindy Wolf, research analyst for Cahners In-Stat/MDR, Scottsdale, Ariz. On the supply side, these include the lack of a single interoperable standard for telematics equipment and the need for companies to create partnerships in order to deliver a solution which involves semiconductors, network service, hardware and software.
The products are also not entirely consumer-friendly. "Some companies are developing products they can plug a phone into and some offer solutions that are permanently affixed in the car and for some you have to use their particular wireless carriers. So there are concerns about people having to pay multiple service bills and not being able to transfer the system from one car to another," Wolf said.
Some industry members also claim that Internet-based telematics will not take off until cellular GPRS networks are more widely deployed in the United States, which is expected to occur in the next two years (see Microsoft article this section). Others say voice recognition must also be improved.
While GM's OnStar claims 2 million subscribers, only 14,000 of those are currently paying for a direct Internet telematics connection or for the company's Personal Advisor plan, which allows users to access information via the Internet, according to In-Stat.
OnStar's standard plan offers call-in center based assistance, but In-Stat, and some industry members say that Internet-based connections, which serve up info to consumers on demand, is the future of telematics.
In-Stat reports worldwide sales for embedded in-vehicle Internet telematics service reached 27,000 subscribers in 2001, but is expected to grow to over 5 million subscribers in 2006 with worldwide revenues hitting nearly $12 billion in 2006. The growth rate for telematics will peak in 2004, says In-Stat, because it will become widely available in new cars and consumer awareness will grow.
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