Identifying the Trends from the Trendy: Five Predictions for the Telematics Industry

Nearly one year after Verizon’s acquisition of Hughes Telematics, the newly named Verizon Telematics was out in full force at Telematics Detroit 2013 held recently in Novi, Michigan – underscoring the company’s expanded capabilities in the automotive market place and plans to accelerate growth in other key markets.
Verizon Telematics had a number of highlights at this year’s show, not the least of which was a keynote address delivered by Kevin Link, senior vice president, Verizon Telematics, titled “Identifying the Trends from the Trendy,” where he discussed the current state and outlook for the industry.

“We are at an interesting point in telematics where change is picking up, we are re-inventing ourselves and almost catching up with the consumer electronics industry, but there is a risk in identifying the trends from the trendy,” said Link at the start of the discussion.

Link pointed to a range of factors that are having a significant impact on the industry including tethered and embedded solutions; network configurations such as 3G and 4G; subscription-based models; the evolution of usage-based insurance; data privacy; driver distraction; smartphone integration; and global expansion.

“We’ve got to answer for all of these and there are no clear answers, only ‘fifty shades of gray’ on any one of these topics.” Link continued.

Although there is a large degree of transformation happening in the industry right now, Link noted that areas which have experienced little change such as telematics software, network and security suggest a core telematics offering poised with opportunities for innovation in the future.

On the other hand, Link noted that advances in consumer technology have created a pathway for tremendous innovation in content, services, and distribution, which he said are the most subject to growing trends.

Widely known as in-vehicle ‘infotainment,’ Link said that while there have been several important milestones in the convergence of delivering content and services to the car, he challenged the industry to demonstrate greater flexibility to making changes as needed in real-time.

“I believe that the next ‘killer app’ [in the car] is going to be the ability to change that app remotely so that you don’t inconvenience customer,” said Link.

The number of telematics and infotainment subscribers in the U.S. is expected to grow to 27 million by 2015, according to Frost & Sullivan.

Meanwhile, distribution channels have grown beyond the customer service rep to include voice systems, smartphones, web portals, and in-vehicle interactive systems.

As for customer expectations, Link acknowledged that while they do exist, they are driven mostly by the industry.

“Most customers don’t wake up and say, I wish I had more telematics in the car. They may not know [the word] ‘telematics,’ but they know that their cars are connected,” said Link.

According to industry estimates, awareness for connected services is at 84 percent in the U.S.

“Customers are demanding connectivity and want access to their favorite mobile applications on the road,” Link added.

Five Predictions for Telematics

Link closed his presentation with five predictions for the telematics industry:

• Customers will change their priorities
• Business models will change dramatically
• New services will be introduced and old services will disappear
• Network security will see great innovation
• Winners will be the most flexible providers

Verizon Telematics Wins Big at Telematics Update Awards

Verizon Telematics collected two awards at the at the 10th Annual Telematics Update Awards held on the eve of the Telematics Detroit show – Best Insurance Telematics Product or Service Launch and Best Aftermarket Device or Solution for its In-Drive® solution, a self-installed aftermarket telematics solution that can connect to most vehicles sold in the U.S. after 1996.

With In-Drive, customers without access to embedded telematics systems are able to receive a comprehensive set of connected services, including safety and security, convenience, diagnostics and emissions, family monitoring and data analysis.

Distinguished Gartner analyst Thilo Koslowski, who presided over the award ceremony, emphasized that Verizon’s in-Drive solution is noteworthy not only in its current state but also for what it will do in the future to change the face of telematics.

Verizon was also nominated for Best Telematics Service Provider.