Right now, telematics is closely associated with three industries:
- fleet tracking,
- in-car entertainment and
- insurance telematics.
It is in these three areas that telematics has proven its worth and is actually making inroads.
Fleet tracking, for instance, has helped businesses keep track of their vehicles. Fleet tracking has given fleet companies the data that helps them improve the efficiency of their business, leading to fewer costs, less accidents and more revenue. The benefits of fleet tracking is such a motivator for businesses that ABI Research estimated in 2012 that the demand for fleet tracking systems will more than double from only 13.3 million subscriptions in 2012 to more than 30 million in 2016.
The expected increase is partly due to the fact that systems are becoming more affordable, therefore it is now accessible to smaller companies with smaller fleets. It has also opened up the market to non-trucking companies, such as service and delivery companies, as well as private and public transportation companies.
The same trend is being seen in insurance telematics, where more and more insurance companies are opting for telematics to help them decide the insurance premiums to charge their customers.
As you can see, telematics is enabling companies to innovate. And that is one of the reasons why telematics is here to stay.
What do all of these systems do for telematics?
The amount of data you get from your telematics systems allows you to manage your fleet easily while also enabling you to have access to information that can help you make better business decisions. The telematics inside your car can help you drive safely and also know a lot of things that could help you while on the road. This includes getting traffic data, weather forecasts and even accessing traffic light signal systems. The insurance telematics that your insurer puts into your car not only helps you pay lower insurance premiums, but can also help insurance companies get information on your driving patterns, road conditions and other relevant data.
What is happening now is that a lot of people are getting introduced to telematics even without them knowing it. And as more people are introduced to telematics, no matter what variety it is, the more developers are taking notice. The more developers are taking notice, the more applications are launched in the market. It is actually an awesome loop where the more apps and use cases are introduced in the market, the more people get interested in telematics and adopt it, thereby starting the cycle again.
There are two trends that are very apparent now when it comes to telematics:
- the connection between telematics and smartphones, and
- the relationship between telematics and big data.
How do these two trends relate to telematics in the future?
Telematics and smartphones
Smartphones are getting more and more powerful as they become more and more loaded with features and functionality than ever before. You can now have high-speed Internet on your mobile device, along with other connectivity options such as Bluetooth and Wi-Fi. GPS chips are also embedded into the device.
Smartphones have been seen as a short cut for telematics systems. This can easily be seen in in-car telematics where manufacturers have used smartphones instead of developing their own systems. Now you have Apple and several leading Android device manufacturers trying to elbow their way into car infotainment systems. They want their mobile devices to power your car’s telematics systems.
You may think that this is detrimental to telematics as a whole. With everyone employing a shortcut instead of researching and creating their own systems, the market will soon be found lacking in the device department.
Not really. The use of smartphones and integrating it into telematics systems cuts down the time to market for these systems.
Long development cycles are a challenge for the telematics industry right now. In car infotainment systems, for example, car makers are often bogged down by the fact that they could not get Internet connectivity into their vehicles unless they develop their own chips and equipment that would deliver high speed Internet access to the cars. Now, that is possible with smartphones.
In short, we are looking at more systems in place in much less time than before. It will bring in more users in a short time, thereby attracting more developers to create more apps. This will push telematics systems from something that is cool to have into something that is essential to have, and we will talk about that later on.
When telematics systems become a way of life, an essential thing you cannot do without, then more and more devices will come in. These devices will operate alongside smartphones. In the meantime, why fix something when it is not broken? Why go against the use of smartphones in telematics systems when, simply put, it works? Plus, it keeps the prices down.
Telematics and Big Data
What most people do not realize that the good thing with the increasing number of telematics users is its potential to collect large amounts of data. The data that fleet tracking systems collect now helps companies fine-tune their operations and earn more money in the process. Imagine if you were able to tap into the information of several companies using fleet tracking software.
And this is where big data helps propel telematics into widespread adoption in the future. Coupled with the Internet of Things, the data you get from telematics can provide users with information that they simply cannot live without.
Over the years, it has become easier to gather information. It could be a sensor gathering weather data, or a fleet tracking system monitoring your route, or a wearable gathering location information. It allows you to know whether it would rain, or whether you would be stuck in traffic or even the number of people present in a certain area at a certain time. It has also become very easy to analyze the data and make predictions. Eerily accurate forecasts.
This is what telematics users are looking for. Accurate information that they could use.
From “Nice to Have” to Must-Have
Both of these trends are slowly stamping out the challenges of telematics that we have today.
Prohibitive costs have always been one of the downfalls of telematics. But advances in technology have driven costs down and smartphones standing in for embedded chips in cars and trucks is causing the prices to drop even more. With the entry of more devices, companies and services, the distinction would become less of the features and services offered, but more on the price. This means that both hardware and applications would soon become more accessible.
Data portability is also a problem now. It would be difficult to get companies to share their data with others. There are regulatory reasons for this, or it may be because of the company’s own selfish reasons. For one, why would you want your competitors to know your route information and all that information that you have. However, telematics applications are not relying on their collected data 100%, they also make use of other data sources, including sensors and the Internet of Things.
Then there are the problems on the user side. For example, privacy is a big concern for telematics end users. Do you really want a device in your car telling your insurer that you are breaking the speed limit at four in the morning? Or would you be comfortable knowing that an app you have installed in your infotainment dashboard is collecting location information? And then there are also safety concerns. For example, it has been alleged that telematics systems in cars cause distracted driving.
The good news is that with more applications available, end users now have a choice. They can choose what apps to run or they can opt out of usage-based insurance all the same. Manufacturers are also making their telematics systems even safer.
As we are seeing now, one of the biggest hurdles for the widespread adoption of telematics is that users are not seeing it as essential. For example, GM is getting rave reviews for its OnStar system, but only 56% of users would pay for the service after the first year, which is free. And most of those that do renew their OnStar only want the basic service.
This is something that can be remedied as more and more applications come in for telematics systems. If you are able to do more with your telematics and you get accurate information with it, then you would definitely find it essential to your life enough to pay for it.
If you want to know more about the interaction of connected cars, telematics, infotainment and the Internet of Things, you can read the article I wrote here.
100 Years from Now
Even today, we are seeing the hurdles to widespread adoption melting away. It is safe to say that in a hundred years, telematics would be as commonplace as having a car or a smartphone. You would be sitting in your car letting it drive by itself while a voice tells you all the news you want to know. You would be able to keep track of each member of your family, and perhaps know the best way to get to the office without being late.
Telematics would go beyond just cars and vehicles, but would actually touch every aspect of your life. It will work with other mobile devices and interface with the Internet of Things so that you could easily automate some of your repetitive tasks. For example, if your car is approximately 1 kilometer from your house, telematics can communicate to your air-conditioner and turn it on automatically at a specified temperature. Or it can turn on your coffee maker or TV. How cool is that?
And the best thing is, you do not have to stop even for a second to think about it.