U of Michigan Business School Club Panel Challenges Auto Industry To Consider New Development Methods, Different Revenue Models

Telematics seens as new opportunity for automakers.

Published: 07-Nov-2000

SAN DIEGO, Nov. 7 /PRNewswire/ -- Sensoria Corporation CEO Dave Gelvin, in a presentation delivered at the October 17 meeting of The University of Michigan Business School Club of Detroit, challenged the automotive industry to accelerate development of advanced electronics, and adopt and promote open standards.

Gelvin explained why the auto industry needs to partner closely with venture-backed electronics and networking companies in order to speed the adoption of advanced electronics and communications technology in automobiles, trucks and other vehicles.

Auto manufacturers typically operate within a four-year-long development cycle, while many electronics manufacturers are accustomed to development cycles of one year or less. Standards allow the most talented, most focused, and fastest-moving organizations to advance the state of the art much more rapidly, as in the personal computer industry. Other panelists also explored this and related themes.

Nearly 150 Attend University of Michigan Business School Club of Detroit Gathering

The event, held Tuesday, Oct. 17, 2000 in the Hale Auditorium at the University of Michigan Business School, featured a panel discussion called "Automotive Telematics: The Emerging Service Business Model." Nearly 150 executives, alumni, business people and students attended the session.

Gelvin and other panelists pointed out the need for the auto industry to adapt to the more rapid rates of change common to the electronics and computer industries. Said Gelvin, "Telematics enables connectivity to the car for safety, security, convenience, personal productivity and entertainment. Providing an ever expanding list of services creates new revenue opportunities for the automobile OEMs and their partners."

The expert panel of academics, suppliers and service providers included:

-- David J. Brophy, Ph.D., Director of the Office for the Study of Private

Equity Finance and Associate Professor, University of Michigan Business

School

-- Dave Gelvin, President and CEO, Sensoria Corporation, a leading

telematics systems provider

-- Tom Godward, Director, PRTM, a leading management consultancy to the

technology industry

-- John Correia, Core Wireless Technologies Multimedia and Telematics,

Visteon Corporation

-- Anthony Musci, Associate Director, IDB Forum, a not-for-profit trade

association dedicated to creating a common electronic bus to connect

wireless and other electronic devices in vehicles.

Telematics provides a feedback link to the end consumer, and service-revenue opportunities as well. This link is crucial to customer satisfaction in many industries, but absent in the current distribution model for automobiles. Panelists also explored such questions as whether the technology and service providers will change the industry structure, and whether telematics technology will live up to its expectations.

The Emerging Telematics Market

Telematics is in its infancy as a market. However, industry analysts predict it will reach $42 billion by 2010 from $1 billion in 2000. Delivering on the expectations for telematics services will require rapid technology innovation, widely adopted standards, and consumer-oriented branding. Working with the companies who can create and deliver these new technologies and services is instrumental to the success of the telematics industry.

Telematics Changes the Car or Truck into a Mobile Information Center

These new telematics services transform the auto or truck from a mode of transportation to a mobile information, vehicle management, and entertainment center. For example, telematics allows the Internet into the car, enables communication between the vehicle and the manufacturer, and makes possible Web-based customer relationships. These all allow the vehicle operator and passengers much more control of their total environment while within the vehicle.

"These services will soon become important differentiating features for vehicle manufacturers, and they allow the manufacturers to establish new, ongoing relationships with vehicle owners," added Gelvin. "These relationships may provide ongoing sources of revenue, rather than the one-time revenue model of the traditional automobile business."

For more information, visit the Web site of the University of Michigan Business School Club of Detroit at www.umbsc-detroit.org.

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