Car to driver: Please replace my fuel pump
Imagine your car warning you of an icy road ahead, reading aloud the text messages arriving on your phone and sending you an e-mail that your fuel pump needs replacing soon.
This is the vision driving automotive telematics, a technology that has been largely a flop so far but that proponents say needs only a successful business model to be a runaway hit.
"I personally believe it is going to be in every car. It is just a matter of time," said Karl-Thomas Neumann, the head of German supplier and tiremaker Continental AG's <CONG.DE> automotive division.
Continental agreed in April to pay $1 billion for Motorola's automotive electronics business and thus vault itself into vehicle computing and communications technology.
It thus became a leader in a market whose potential, Neumann said, was "billions, definitely."
Thomas Weber, head of research at global number five carmaker DaimlerChrysler <DCXGn.DE>, said telematics technology was far advanced in Europe but still needed authorities to award, for example, frequencies that would let cars talk to one another.
"When these agreements take hold we will have a real boom," he said.
Carmakers have already been marketing the technology as a safety boon, for instance by automatically altering rescue crews if your car's airbags detonate, a so-called emergency call.
"What has not been solved is managing the e-call center and handling the costs for a call center in a Europe that is not so unified and that has lots of individual states and languages. There is still some work to do there," Weber said this month.
A debate is raging over whether the technology should be embedded in the car or if the vehicle should simply support portable gadgets like mobile phones and digital media players.
Philippe Aumont, head of product planning at French automotive supplier Faurecia <EPED.PA>, said the devices had to be embedded to protect them from thieves.
"Integration remains important to ensure you keep your stuff," he said.
Mark Spain, senior director of U.S. software group Microsoft's <MSFT.O> automotive business unit, said the answer was installing cheap and updateable software in the car that would support a broad range of hardware and services.
"The reality today is that digital experience breaks as you enter the car and we believe that should not happen," he said, especially at a time when people often spend more time in their cars then in front of their computers.
"The cockpit of a car is a very interesting environment and we believe that software is the key to unlocking it," he said.
Once cars are equipped with a global positioning system, a wireless communications connection and a link to a service provider, the sky is the limit on what services are available.
Paying for them is a different matter, however, with many potential customers baulking at paying monthly subscription fees for e-call or remote door unlocking services they may never need.
"The consumer is going to think: 20 euros a month, that's 240 euros a year," said Hans Eric Destree, a mobile electronics expert at auto supplier Visteon Corp <VC.N>.
"How often does it happen that I'm going to have an acute car problem? Maybe once every 5 years. That is 1,200 euros for that one telephone call. I think I'm not going to do that. That is the problem that we have with telematics."
Russell Shields, chief executive of U.S. group Ygomi, said early projections for the telematics market have been mainly disappointing.
"If there was a belief that people were running off and buying cars because of the telematics service then you would see a strong effort from people to get it right. It hasn't reached that point yet but it may in another two or three years," he said.
"If you look down the road 10 years from now you are almost sure to have the safety communications in the higher-end cars at least, but the actual way that evolves is completely unclear."
What could serve as a money spinner for carmakers is telematics' ability to feed back data on how cars are performing and what potential problems may soon arise.
This could save millions by allowing dealers to stock only the parts they know customers will need at their next service.
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