The adoption of automotive telematics systems is on the rise and gaining momentum. These devices are providing individuals and businesses with a wide range of benefits, from improved driving and fuel optimization, to usage-based insurance (UBI) premiums, and even vehicle maintenance alerts and finder/recovery services.
Going well beyond basic vehicle location and routing capabilities, new devices being introduced offer assistance and deep insights regarding driver convenience, behavior, and safety—for example, video telematics and connected vehicle services.
And it’s a lucrative industry.
Research suggests the global commercial telematics market will be worth over $144 billion within the next decade, with North America leading the growth. And we can’t forget about the aftermarket.
According to research by the Internet of Things (IoT) analyst firm Berg Insight, there’ll be approximately 150 million installed aftermarket car telematics devices by 2023.
The firm also forecasts shipment of these devices for consumer applications alone will reach 51 million units during that same time frame.
There are a couple of main catalysts driving this growth.
- Governments are now more willing to mandate specific telematics services. Examples include emergency call capabilities in vehicles and requirements for commercial fleets to record their duty status with IoT devices.
- The second catalyst is consumer demand. A growing number of individuals and businesses are looking for better connectivity and more features within their vehicles.
And the industry is racing to respond.
Combining AI and video to achieve intelligent driver insights
Using video in vehicles isn’t an entirely new concept. Many fleet managers have been employing the basics of this technology for years to both coach drivers and absolve them when accident disputes arise.
However, video is definitely going mainstream, and its new relationship with artificial intelligence (AI) is giving individuals and businesses a whole new level of insight into driver behavior.
The connectivity of video telematics systems, the complex algorithms they use to function, and the deep data they are capable of collecting and providing makes this technology a powerful asset with regard to vehicle safety and efficiency.
Video telematics solutions often involve a camera—or cameras—a mobile app, and perhaps a fleet management platform. The cameras continuously capture road-facing footage, which overwrites until a violation is detected. Violations are detected using AI, and may include events such as speeding, tailgating, hard cornering, hard stopping, lane drifting, rolling at a stop sign, and of course, collisions.
When a violation occurs, video footage is cropped on either side of the event and saved within the app and platform for review. Some solutions even offer live voice notifications so drivers can correct their behavior in real time, as well as facial recognition capabilities to reduce driver behavior risk.
The kind of transparency that video telematics solutions provide is enabling drivers and fleet managers to track infractions during a trip and over time—information which can be used to increase accountability and encourage safer driving habits. It can also be used to reduce liability, because video doesn’t lie.
Video telematics technology has expanded even further over the last few years as more companies enter the space.
For example, Netradyne—a San Diego-based video telematics provider—recently released a camera that offers up to eight different views around a truck. Another example is Samsara—a San Francisco-based leader in industrial IoT solutions—introduced a dual-facing dash camera that uses AI to interpret objects both on the road and inside the cab of a vehicle. Neither of these companies existed five years ago.
The rise of connected vehicle services
As previously stated, drivers are increasingly interested in greater connectivity and intelligence when it comes to their vehicles, which is propelling growth in the connected vehicle services market. In fact, it’s estimated revenue from this market will grow to more than $75 billion for China, the U.S., and the EU by 2030.
Consider Automatic Labs Inc.—a SiriusXM company. Like other connected vehicle service providers, the company offers customers a long list of benefits. In Automatic’s case, these include:
- crash alerts
- roadside assistance
- real-time vehicle location monitoring and sharing
- vehicle health and performance monitoring
- recall notifications and service reminders, and
- integration with smart home devices.
Consumers and enterprises alike can purchase the company’s adapters and subscription options directly from its website, making it easy for Automatic to reach customers at any stage of their cars’ lifecycles. And less than a year ago, Automatic announced a new third-party program that enables auto dealers to offer their customers connected car services.
Through the program, consenting customers receive a free trial of Automatic’s services, which gives them safety and convenience features. Dealers benefit by receiving notifications when their connected customers are due for service. This enables them to follow up and invite their customers back to their dealership to take care of maintenance and repairs, all for a net cost to the dealer of as low as $40 per vehicle.
Spireon is another vehicle intelligence company providing a range of tracking and management solutions to consumers, fleet operators, and third parties, including new and used car dealers, rental car agencies, lenders, and financial institutions. Customers of these third parties enjoy enhanced services upon purchase of a vehicle, and the third parties experience streamlined sales, service retention, improved inventory management capabilities, and more.
Dealers and finance companies in particular are able to use this type of telematics technology to manage their fleets and the lifetime value of their customers.
For example, Spireon offers a connected car and stolen vehicle recovery technology called Kahu, which is aimed at dealerships.
One of the company’s customers offering this technology to its clients says it has a 60 percent penetration rate on all its vehicles. This has cut its inventory management time in half and aided in the recovery of clients’ stolen cars. Another dealership offering this technology to its clients says it has more than 40 percent penetration on its vehicle sales. It also reduced its inventory management time by 75 percent and recovered $100K in assets.
Octo Telematics—yet another leading telematics company—also offers its services through third-party providers. Octo Telematics targets many of its solutions to insurers to help them improve their customer risk assessments, reduce their claims costs, and personalize their policies. The company even goes a step further and assists insurers in eliminating barriers and mitigating the costs of integrating telematics to improve their business processes. The insurers’ end-clients ultimately end up with more accurately calculated rates based on their actual driving habits.
Mobile network operators move into the connected car market
A number of mobile network operators are jumping on the aftermarket car telematics bandwagon and becoming providers and sales channels for these services.
For example, Verizon Connect is the leading provider of fleet telematics systems according to analyst firm Berg Insight. It has held this position ever since it acquired Fleetmatics and Telogis in 2016. It has more than 1.7 million connected units in service in the U.S.
Verizon’s closest competitor is Geotab which has grown considerably in the past years, now having an installed base of well over 1 million active fleet management subscribers in the region”, said Rickard Anderson, Principal Analyst.
Fleet Complete—which is an AT&T partner—is another top U.S. provider, and T-Mobile and Sprint are also expanding into this sector.
These operators are a natural fit in this space as they’re easily able to leverage access to their existing customers to drive sales. A foothold in this market also enables them to explore data monetization opportunities down the road from their installed car telematics solutions.
Data is the future for mobile network operators, as voice has become a saturated market.
Finding new ways to compete
As more businesses enter the automotive telematics market and the competition builds, it’s becoming increasingly important for these businesses—as well as their third-party providers—to find ways to add value for their customers. One way of doing this is by building up their recurring billing capabilities.
Like most IoT markets, automotive telematics typically involves a complex end-to-end billing chain. Monetization, customer management, and hybrid billing models that combine recurring and one-time-charges all need to work together seamlessly for businesses in this industry to scale and meet demand with success.
The solution to this is implementing a dynamic billing platform that can easily integrate with existing business technologies and processes, manage multiple inputs from connected IoT devices, and streamline the entire customer and billing relationship from telematics provider through to end-user. Because while the automotive telematics market and its billing requirements may involve intricacies and complexities, end-users don’t want to see that complexity reflected on their bill.
Continued growth of automotive telematics
Vehicles generate a lot of data with regard to how they’re used, where they’re used, and who’s using them. And as individuals and businesses continue to demand more connectivity and intelligence on the road, industry players will continue competing to develop new ways to monetize this data into valuable products and services.
When it comes to the evolution of the automotive telematics industry, we’ve only just scratched the surface.
