Wireless Wheels

Putting all of the hype about killer apps aside, no one really knows what the future of wireless data looks like. The whiz-bang approach to wireless apps has thus far yielded the likes of wireless club guides and dial-a-Coke. Although useful in limited ways, these apps seem to hold little promise as serious business models with staying power.

My bet is that the true killer apps of tomorrow will solve today's basic problems — like getting lost, or getting bored — with telematics and games.

A major wireless carrier recently said its data strategy was built on three markets: wireless Internet access, peripheral device connectivity and telematics. Although the carrier didn't rank these markets in terms of revenue or importance, it's fairly obvious which of the three markets gets the least exposure these days.

The word “telematics” just doesn't evoke excitement the way “wireless Internet” does. Maybe it's an image problem, but the telematics market has languished for years despite its compelling value.

But in-vehicle telematics has been gaining ground recently and could be a serious source of revenue for carriers that play their cards right. The telematics market is expected to grow at 90% a year over the next five years, bringing the total number of cars outfitted with telematics systems to 56 million worldwide by 2005, according to a study from the ARC Group (www.the-arc-group.com). Given that we're entering a period of leaner economic times, finding wireless data revenue sources beyond sexier apps such as Bathroomfinder.com or dial-a-Coke might not be a bad idea.

GM's OnStar system is the best-known telematics system and is primarily thought of as an emergency tool for lost vacationers or road warriors, but there are other players such as Ford RESCU and Mercedes-Benz TeleAid. The in-vehicle telematics market is evolving to include services beyond emergency assistance. Infotainment services such as Internet access and video games will help telematics gain wider consumer acceptance, according to a recent Frost & Sullivan (www.frost.com) report.

Moving telematics from zero to 60 will require more consumer education, value-added services, improved wireless-network coverage and lower costs.

Telematics combines the potential of wireless voice and data communications with GPS location technology to deliver security, entertainment and business information to people in their cars. Because telematics aggregates a number of existing and emerging technologies, it will be necessary for carriers to form partnerships now to capitalize on this often-overlooked opportunity.

An example is Wingcast, the joint venture formed by Ford and Qual-comm last summer. Ford predicts that by 2005, it will have outfitted 9 million cars with wireless services.

The major automakers have recognized the potential of telematics, a market IDC (www.idc.com) predicts will grow to $42 billion by 2010. The time is ripe for the wireless data industry to get on board.

If carriers ignore telematics, they can be assured that automakers aren't ignoring wireless. GM announced last year that it will establish its own mobile phone company in the United Kingdom. And why not? After establishing OnStar as a premier telematics service, the next logical step is to take those wireless services out of the car with the driver. By establishing inroads in telematics today, carriers can move into the driver's seat, rather than getting left behind in the dust.