Thomas Hallauer, strategic marketing and communication manager for Mobile Devices, on how smartphones could boost the market for fleet telematics
Thomas Hallauer has been in the thick of telematics for more than a decade, specializing in fostering growth in the telematics industry through research and partnerships. His background includes eight years with Telematics Update's conference production team as well as founding TheWhereBusiness, a portal for the navigation and location-based services sector. As strategic marketing and communication manager for Mobile Devices since 2010, he keeps an eye on the convergence of location, navigation, risk management and mobile asset management in this ecosystem. Hallauer talks to TU’s Susan Kuchinskas about black boxes, business models and the growing role of mobile network operators.
What do you see on the horizon for fleet tracking and management services?
For the fleet side, insurance can quite easily become a module. If there was, market-wise or industry-wise, a way of modularizing the services, it would be easy to say, ‘You've got track-and-trace. Do you want to add insurance on top of it?’ Typically, that doesn't work, because the black boxes can't handle the combination of services.
We sell hardware and communications to TSPs, and they have seen big pickup from fleets with mobile devices—phones, smartphones, even consumer-grade tablets. Fleet operators will buy the tablet or phone from the network operator, get a data and voice rate and two-year contract, and get the device for free. After that, they're talking to the TSPs that have applications that can run on those devices. So the phone can be used as a tracking black box. Although it's not perfect, it's a good first step in.
Quite quickly, they start understanding how they can benefit from services beyond basic track-and-trace and understand that the phone or tablet is not an adequate telematics device. This means faster and better pickup of basic telematics services and, ultimately, more conversion to professional hardware. (For more on insurance, see Industry insight: Insurance telematics.)
What are the benefits of an open operating system for telematics devices, and who can best take advantage of them?
You need to understand one single fact: The telematics market is a donkey that is very slow and very stubborn. The value chain is a complete mess. Imagine if you wanted to buy ERP software, and you could only run it on one kind of computer and connect through one operator. That’s where we're at with telematics.
Only in telematics will you find that devices are running on firmware. This means that you can't install new services to the device once it's inside the vehicle. An open operating system in telematics means that you have a platform that is accessible with an SDK; it can be shared between different types of devices across vertical markets. You enable all these devices to accept different third-party applications.
Once you have an open operating system, you can have a marketplace and an app shop. Our operating system is now being used in a car and being used to sustain an app store for the car manufacturer. I can't disclose which one. (For more on apps, see Industry insight: Telematics and apps.)
Why not just use the Android OS?
A lot of people are trying to do exactly that and asking us that question. Android is a fantastic operating system made for smartphones. But it requires dual-core processors and big hard drives; that kind of hardware is not well priced for the telematics market. You could probably run a version of Android on the cheap hardware needed for telematics, but that is very slow process, and there's no support from Android. It would take months, and those developers are very expensive.
Also, Android is not really made for telematics. For example, low-level peripherals are not typically covered by Android. There are few or no generic APIs to manage these peripherals. Each device manufacturer must develop its own API, such as CAN bus, accelerometer, OBD or memory management specifically for the storage and frequent data removal.
Many in the telematics industry think personal navigation devices will be eliminated by competition from embedded devices on the high end and smartphones on the low end. But Mobile Devices thinks PNDs will continue to have a place in the ecosystem. What should PND manufacturers do to ensure they remain competitive?
We are building PNDs, and it's a fact that in Europe and the U.S., they are dying a quick death. In my opinion, that's because there hasn't been much innovation in the market for years. Smartphones have taken a share of the market, but also the PND is exactly the same as five years ago, so it's not particularly appealing. Smartphones are not always as ideal as PNDs for navigation, and there is still a small share of the market that will need an actual PND.
Also, people who use PNDs—or used to—use them for more than navigation, including regional points of interest, eco driving, radar alerts or traffic information. There isn't yet a PND that does both navigation and regional specific interests very well. If you don’t have an open operating system, you have to build different PNDs for different countries, because the service sets have to be different. If you have the ability to integrate third-party applications, you immediately have a device that’s able to adapt to regional market.
Mobile network operators are, along with everyone else, searching for the right business models and market strategies for connected-car services. What do you think is the best role for them to play?
They are becoming an extremely important force in providing telematics to fleets. The operators used to be just data pipes; now they are becoming TSPs themselves. Of course, with them being able to sell smartphones and tablets, they are at center of the introduction of telematics to fleets. They also have a very simple sales channel for selling connected devices to big enterprises. We're starting to see operator-led marketplaces where, for example, two TSPs will be presented and competing to the telco's customers. I believe that it won’t take long until you see telematics marketplaces with an operator's brand. The fleet manager will be able to buy black boxes or/and in-cab displays at the same time as the fleet management solution, everything will be connected, integrated and able to be rolled out in a matter of weeks. (For more on connected cars, see Industry insight: The connected car.)
Susan Kuchinskas is a regular contributor to TU.
For more on fleets, see Industry insight: Fleet telematics.
For all the latest telematics trends, visit Content and Apps for Automotive USA 2012 on December 4-5 in San Diego.
Coming up in 2013: Consumer Telematics Show 2013 on January 7 in Las Vegas, V2X for Auto Safety and Mobility Europe 2013 on February 19-20 in Frankfurt, Telematics for Fleet Management Europe 2013 on March 19-20 in Amsterdam, Insurance Telematics Europe 2013 on May 8-9 in London and Telematics India and South Asia 2013 on June 5-7 in India.
For exclusive telematics business analysis and insight, check out TU’s reports on In-Vehicle Smartphone Integration Report, Human Machine Interface Technologies and Smart Vehicle Technology: The Future of Insurance Telematics.
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