Telematics is a broad term that may be applied to a wide range of automotive IT solutions. Berg Insight's definition of a car telematics solution in this report is an automatic system designed for passenger cars which incorporate some form of wireless communication via a wide area network. The history of car telematics can be traced back to the first stolen vehicle
tracking systems based on RF communication using unlicensed frequency bands, which appeared on the market in the 1980s. Subsequently mobile networks have enabled true online connectivity with two-way communication at the same time as GPS technology has
been commoditised to the extent that high-accuracy satellite positioning can be integrated into virtually any device. Today a standard telematics unit features GPRS, GPS and frequently also some kind of interface to the electronics systems of the vehicle. This kind of device may be used as a platform for one or several types of applications. Several categories of car telematics applications are today offered on a commercial basis. These include eCall and driver assistance, SVR, motor insurance telematics, leasing and rental fleet management and vehicle diagnostics. eCall and driver assistance applications deliver value in the form of improved safety and better convenience when travelling. SVR facilitates recovery of the car in case of theft and frequently entitles the owner to insurance benefits. Motor insurance telematics combines SVR with innovative business models such as
PAYD (Pay-As-You-Drive). Leasing and rental fleet management gives owners better control over hired-out vehicles and enables new forms of contracts. Vehicle diagnostics allows car manufacturers, dealers and workshops to improve their service offering to car owners. The automotive industry has two traditional tracks for new innovations to reach the market. One is the car manufacturers (OEMs) who can offer new functionalities as factory-installed standard or optional features. The other is aftermarket vendors that develop products which can be installed by car-owners regardless of brand or model. In many cases there is a parallel development of both OEM and aftermarket products.