High hopes for ‘telematics’

Associated Press

SAN JOSE, Calif. — For months now, Nicole Gunther hasn’t heard her 4-year-old daughter whine from the back seat, "Are we there yet?"

The relief came when Gunther and her husband purchased a Honda minivan with a DVD player and satellite navigation system. Now Disney films keep her child quieter on car trips, and the days of getting lost are over as well.

"Every car should have these options," Gunther said.

Soon, many will.

The Gunthers are the kind of consumers that automakers and high-tech companies prize as they rev up on "telematics" — automobile versions of the communication and entertainment staples of the home and office.

Telematics gear is fast expanding past navigation devices and rear-seat DVDs, as new technology such as satellite radios gain traction. Within two years, motorists can expect to get traffic reports specific to their location or commute. Advanced vehicle diagnostics would let cars automatically transmit performance data to dealerships.

Some companies are working on wireless technologies that one day — perhaps in five to 10 years — would allow users to get new movies and songs wirelessly from home, gas stations and convenience stores. Other technologies could control thermostats and lights at home while driving.

For start-ups and tech giants alike, cars represent an untapped frontier. Automakers, meanwhile, are looking to cater to the lifestyle of the digital road warrior.

"People are used to using wireless communications and having continual contact with office and home, and people are used to using these technologies on the road," said Dan Garretson, automotive industry analyst for Cambridge, Mass.-based Forrester Research.

That is why some observers believe the market for automotive electronics is on the verge of a boom.

Forrester predicts the industry will grow in annual revenues to $20 billion in 2006 from $1.6 billion in 2001.

In five years, Forrester predicts, automakers will be installing telematics devices in about 80 percent of new vehicles. Nearly 40 million cars will come with hands-free cell phones. More than 46 million will have monitoring systems that connect motorists to roadside assistance.

Just two years ago, telematics products consisted mainly of navigation systems offered only in a few high-end cars and the fledgling OnStar service from General Motors.

Today, navigation options are found in midrange cars, and factory-installed satellite radios, offered first by Cadillac in two of its 2002 models, are making its way into dozens more 2003 models, including cars by GM, Ford and DaimlerChrysler.

"By this time next year, I think you’ll see nearly all SUVs and minivans have these rear-seat DVD consoles," said Bob Schumacher, head of mobile multimedia at Delphi Automotive Systems, the world’s largest maker of car parts.

Still, high price tags will keep many features from becoming as standard as AM-FM radios, automakers say. An in-dash DVD player with rear-seat display or a navigation system typically costs $1,500 to $2,000. OnStar fees range from $200 to $400 a year.

After a year of offering navigation systems on its entire Acura line, Honda found that only about 5 percent of buyers wanted the option. Sales of rear-seat DVD players offered in its Odyssey minivans stayed flat at about 15 percent of all models sold.