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North American Passenger Vehicle Telematics and Remote Vehicle Diagnostics Markets

Published by: Frost & Sullivan

Published: Apr. 1, 2004


Table of Contents


North American Passenger Vehicle Telematics and Remote Vehicle Diagnostics Markets

1. Executive Summary
      1. Executive Summary

2. Total Telematics Market
      1. Overview
           1. Market Overview and Definition
           2. Market Engineering Analysis
           3. Market Challenges
               a. High Prices Restrain the Market
               b. The Industry Must Decide Whom It Serves
               c. Awareness of Telematics Remains Low
               d. Digital / Analog Issue Looms
               e. The Search for a "Must-Have" Application Continues
               f. Standards Still Need to Be Developed
               g. Technology Is Changing Rapidly
               h. Some Functions Need Higher Bandwidth than Is Available
               i. Geographic Coverage of Cellular Phone Networks Is Not Ubiquitous
               j. Driver Distraction Remains a Concern
               k. Privacy Concerns May Inhibit Some Potential Users
               l. Liability Issues Remain Unresolved
           4. Regional Analysis
           5. A Word of Caution
      2. Market Size Forecasts
           1. Installation and Subscriber Base Drivers and Restraints
           2. Market Outlook
           3. Hardware Unit Shipment Forecast
           4. Subscriber Base Forecast
           5. Cellular Airtime Forecast
    3. Price Forecasts
           1. Price Drivers and Restraints
           2. Price Forecasts
    4. Market Revenue Forecasts
           1. Market Revenue Forecasts
    5. Market and Technology Trends
           1. Market Trends
           2. Technology Trends
           3. Industry Timeline
    6. Competitive Analysis
           1. Industry Structure
           2. Market Participants
           3. Availability of Telematics by Vehicle
    7. Frost & Sullivan Awards
           1. Frost & Sullivan Business Development Strategy Leadership Award
               -- Telematics Services
           2. Frost & Sullivan Technology Leadership Award -- Remote Vehicle Diagnostics
           3. Frost & Sullivan Best Bang for the Buck Award -- Vehicle Tracking

3. Telematics Hardware Market
      1. Overview
           1. Market Overview and Definitions
           2. Market Engineering Analysis
      2. Quantitative Analysis
           1. Unit Shipment Drivers and Restraints
               a. Unit Shipment Drivers
                   - Telematics Is Becoming Available on a Wider Range of Vehicles
                   - Increasing Concern for Safety Supports Demand
                   - Rising Awareness Fuels Demand
                   - Declining Hardware Prices Support Demand
                   - Services Are Being Expanded
                   - Telematics May Reduce Vehicle Insurance Rates
                   - Telematics' Usefulness May Expand Beyond Vehicles
              b. Market Restraints
                  - Low Perceived Value Limits Interest
                  - Many Products and Services Compete with Telematics
                  - Infrastructural Constraints Limit Expansion of Services
                  - Bluetooth Technology Allows Easier in-Vehicle Use of Cellphones
                  - Aftermarket Telematics Systems May Cut into the Original Equipment Market
           2. Unit Shipment Forecast
           3. Price Drivers and Restraints
               a. Price Drivers
                   - Capabilities of Telematics Control Units Are Increasing
               b. Price Restraints
                   - Market Participants Seek to Grow the Market by Cutting Prices
                   - Development of Products Cuts Costs and Prices
                   - Volume Production Results in Economies of Scale
           4. Price Forecast
           5. Revenue Forecast
     3. Competitive Analysis
           1. Competitive Structure
           2. Market Shares

4. Telematics Services Market
      1. Overview
           1. Market Overview and Definition
           2. Market Engineering Analysis
      2. Quantitative Analysis
           1. Subscriber Base Drivers and Restraints
           2. Retention Rate Analysis
           3. Subscriber Base Forecast
           4. Price Drivers and Restraints
           5. Price Forecast
           6. Revenue Forecast
    3. Competitive Analysis
           1. Competitive Structure
           2. Market Shares

5. Remote Vehicle Diagnostics Market
      1. Overview
           1. Market Overview and Definition
           2. Origins of Remote Vehicle Diagnostics
           3. Role of Key Market Participants
           4. Capabilities and Benefits
      2. Market Analysis
           1. Market Drivers
               a. Lower Warranty Costs Prompt Automaker Interest
               b. Extensive Real-Time Information Gathering Helps Improve Vehicle Design
               c. Advanced Customer Relationship Management Helps Improve
                   Customer Retention
               d. RVD Supports Move towards Fully Electronic Systems
               e. Growing Customer Awareness Creates Demand
               f. Applications Beyond the Auto Industry Create Additional Constituencies
               g. Benefits to Vehicle Owners Support Demand
               h. Greater Customer Loyalty and Brand Differentiation Benefits Vehicle
                   Makers and Dealers
           2. Market Restraints
               a. Privacy Issues Are a Growing Concern
               b. Lack of a Profitable Business Model Hinders the Market
               c. Low Perceived Value Restrains Demand
               d. Lack of Industry-Wide Standards Raises a Hurdle
               e. Existing Products and Alternative Practices Compete with Remote
                   Vehicle Diagnostics
               f. Vehicle Makers' Internal Infrastructure Issues Slow Market Development
               g. Other Telematics Applications Distract Interest from Remote Vehicle Diagnostics
           3. Demand Analysis
           4. Pricing Analysis
           5. Revenue Possibilities
           6. Impact of New Vehicle Sales
           7. Impact of New Model Introductions
      3. Competitive Analysis
           1. Impact on the Auto Repair Industry
           2. Impact of Aftermarket Participants
           3. RVD Systems in Development
           4. Conclusion

6. Telematics Cellular Airtime Market
      1. Overview
           1. Market Overview and Definition
           2. Market Engineering Analysis
      2. Quantitative Analysis
           1. Response Center Calls
           2. Personal Calling
           3. Total Airtime Revenue Forecast
     3. Competitive Analysis
           1. Competitive Structure
           2. Wireless Communications Technologies

7. Appendix
      1. Abbreviations and Equations
           1. Abbreviations
           2. Organizations
           3. Compound Annual Growth Rate
           4. Conversion Equations
     2. Related Frost & Sullivan Studies
           1. Related Frost & Sullivan Studies
     3. Exchange Rates
           1. Exchange Rates -- U.S. versus Canada; Europe; Japan; Mexico; and U.K.

8. Decision Support Database
      1. Decision Support Database
           1. Global Trade Regulations
           2. Joint Ventures and Affiliations
           3. Light Vehicle Sales
           4. Vehicle Production
           5. Vehicles in Use
           6. Average Annual Miles Driven
 



List Of Figures

Chapter 2

  • Total Passenger Vehicle Telematics Market: Impact of Top Industry Challenges (North America), 2004-2010
  • Total Passenger Vehicle Telematics Market: Hardware Unit Shipment Forecasts (North America), 2000-2010
  • Total Passenger Vehicle Telematics Market: Subscriber Forecasts (North America), 2000-2010
  • Total Passenger Vehicle Telematics Market: Cell phone Airtime Forecasts (North America), 2000-2010
  • Total Passenger Vehicle Telematics Market: Price Forecasts (North America), 2000-2010
  • Total Passenger Vehicle Telematics Market: Revenue Forecasts (North America), 2000-2010
  • Total Passenger Vehicle Telematics Market: Competitive Structure (North America), 2004
  • Total Passenger Vehicle Telematics Market: Database of Key Industry Participants by Product Type (North America), 2004
  • Passenger Vehicle Telematics and Remote Vehicle Diagnostics Market: TrimTrac’s Benefit Analysis (North America), 2004

Chapter 3

  • Passenger Vehicle Telematics Hardware Market: Unit Shipment Drivers and Restraints Ranked in Order of Impact (North America), 2004-2010
  • Passenger Vehicle Telematics Hardware Market: Demand Forecasts (North America), 2000-2010
  • Passenger Vehicle Telematics Hardware Market: Price Drivers and Restraints Ranked in Order of Impact (North America), 2004-2010
  • Passenger Vehicle Telematics Hardware Market: Manufacturer-Level Price Forecasts (North America), 2000-2010
  • Passenger Vehicle Telematics Hardware Market: Unit Shipments versus Average Price (North America), 2000-2010
  • Passenger Vehicle Telematics Hardware Market: Revenue Forecasts (North America), 2000-2010
  • Passenger Vehicle Telematics Hardware Market: Competitive Structure (North America), 2003
  • Passenger Vehicle Telematics Hardware Market: Market Shares of Major Market Participants (North America), 2003

Chapter 4

  • Automotive OE Telematics Services Market: Response Center Operators by Automaker (North America), 2004
  • Total Automotive OE Telematics Market: Services by Response Center Operator (North America), 2004
  • Passenger Vehicle Telematics Services Market: Subscriber Base Drivers and Restraints Ranked in Order of Impact (North America), 2004-2010
  • Passenger Vehicle Telematics Services Market: Renewal Rate Forecasts (North America), 2000-2010
  • Passenger Vehicle Telematics Services Market: Subscriber Forecasts (North America), 2000-2010
  • Passenger Vehicle Telematics Services Market: Subscriber Forecasts (North America), 2000-2010
  • Passenger Vehicle Telematics Services Market: Demand Forecasts (North America), 2000-2010
  • Passenger Vehicle Telematics Services Market: Price Drivers and Restraints Ranked in Order of Impact (North America), 2004-2010
  • Passenger Vehicle Telematics Services Market: Price Forecasts (North America), 2000-2010
  • Passenger Vehicle Telematics Services Market: Revenue Forecasts (North America), 2000-2010
  • Passenger Vehicle Telematics Services Market: Competitive Structure (North America), 2003
  • Passenger Vehicle Telematics Service Market: Revenue Shares of Major Market Participants (North America), 2003

Chapter 5

  • Remote Vehicle Diagnostics Market: Demand Drivers Ranked in Order of Impact (North America), 2004-2010
  • Remote Vehicle Diagnostics Market: Demand Restraints Ranked in Order of Impact (North America), 2004-2010

Chapter 6

  • Telematics Cell phone Airtime Market: Response Center Call Volume Forecasts (North America), 2000-2010
  • Telematics Cell phone Airtime Market: Response Center Airtime and Revenue Forecasts (North America), 2000-2010
  • Telematics Cell phone Airtime Market: OnStar Personal Calling Airtime Forecasts (North America), 2000-2010
  • Telematics Cell phone Airtime Market: OnStar Personal Calling Airtime and Revenue Forecasts (North America), 2000-2010
  • Telematics Cell phone Airtime Market: Total Revenue Forecasts (North America), 2000-2010
  • Telematics Cell phone Airtime Market: Wireless Carriers (U.S.), 2004

Chapter 7

  • Passenger Vehicle Telematics Market: Exchange Rate (Canada: US), 2002-2004
  • Passenger Vehicle Telematics Market: Exchange Rate (Europe: US), 2002-2004
  • Passenger Vehicle Telematics Market: Exchange Rate (Japan: US), 2002-2004
  • Passenger Vehicle Telematics Market: Exchange Rate (Mexico: US), 2002-2004
  • Passenger Vehicle Telematics Market: Exchange Rate (UK: US), 2002-2004

Abstract

High Prices Cause Slower-than- Expected Uptake of Telematics

While consumers are attracted by the idea of telematics, the market has not taken off as expected. This significantly slow market development is chiefly due to high prices for both initial installations and service subscriptions. This prompts consumers to seek alternatives for the same functions, leading to low adoption rates for optional telematics services and low renewal rates when service is standard. However, the market has developed considerably in spite of low consumer demand, due to the thrust provided by automakers. Some incorporate telematics either as standard equipment in their vehicles or bundled with other options and provide a free initial year of service.

This Frost & Sullivan research offers up-to-date forecasts of the telematics hardware, services, remote vehicle diagnostics, and cellular airtime sectors. The detailed analysis of the market, its drivers, restraints, and technology trends provides inputs for market participants to streamline their business development strategies.

Lower Prices and Value-added Features to Boost Sales

"Although the revenue forecast has been scaled back substantially from earlier projections, the market still is expected to grow," says the analyst. Decreasing hardware prices at both the manufacturer and retailer levels, by greater integration of components, automation, and higher volumes of production, is likely to increase telematics sales and expand the subscriber base.

Lower prices may be necessary for the market to fulfill its potential; however, participants are striving to create more compelling value propositions including safety and security features, dynamic routing, and remote vehicle diagnostics (RVD). Expanding the portfolio of services offered should increase the desirability of telematics and lead to increased installation and renewal rates.

Critical Mass Needed for Profitability

"The telematics industry is in need of a sufficient number of subscribers so that it can stand on its own," says the analyst. "Emerging market trends such as flexible plans, promotion of dealer awareness, and cost reduction can provide this market with the required critical mass," he adds. Flexible plans can help users tailor services to suit their needs and match the brand identity that automakers seek for their vehicles.

Awareness among salespeople and dealers can help them promote telematics when systems are optional, and educate vehicle buyers when they are standard or bundled in an options package. This could encourage buyers to use the systems and also to renew their subscriptions. Lower vehicle insurance rates payable by owners of telematics-enabled vehicles may be another benefit that could support the market. Such emerging market and technology trends could accelerate the development of the telematics market in coming years.



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