Telematics to Become $8 Billion Industry by 2005, According to New Study From Allied Business Intelligence.

High Tech & Business Editors

OYSTER BAY, N.Y.--(BUSINESS WIRE)--Sept. 27, 2000

The telematics industry stands poised for tremendous growth and will be one of the most lucrative segments of the intelligent transportations systems (ITS) industry, according to a new study from Allied Business Intelligence (ABI).

The global in-vehicle information system (IVIS) market for personal vehicles will rise from a $1 billion market in 2000 to over $8 billion by 2005, according to the findings of "Intelligent Transportation Systems: A Strategic Analysis of Global In-Vehicle Information, Navigation, Communications and Roadside Technologies." The recurring annual revenue for IVIS services alone will account for over $3 billion of that 2005 total.

"Several factors will drive this growth in telematics (IVIS)," said ABI analyst Frank Viquez, the author of the report. "Many firms were taking a wait-and-see attitude with IVIS. The pioneer efforts of GM's OnStar and ATX Technologies established the validity of the industry, and starting next year, several large new players will enter the marketplace. To further drive the industry, new IVIS services will also be introduced next year, such as hands-free speech recognition, satellite radio and web-based services, such as weather, news and stock quotes and truncated websites. 2001 will be seen as the year that IVIS takes off."

With a projected 1 million combined subscribers between OnStar and ATX Technologies by the end of 2000, a viable market has been established. Starting in 2001, new entrants such as LoJack Corporation, the American Automobile Association (AAA) and Wingcast (a partnership between Qualcomm and Ford Motor Company) will initially roll out basic IVIS services.

Other ITS applications such as radio data system-traffic message channel (RDS-TMC), radio frequency identification (RFID), fleet management systems

(FMS), in-vehicle navigation systems (IVNS), in-vehicle computing, collision avoidance systems (CAS) and adaptive cruise control (ACC) are rapidly gaining momentum as well.

The global commercial FMS market will grow from a current level of $1 billion to $3 billion by 2005. As these ITS applications continue their assimilation into the vehicle, the need for a plug-and-play market becomes inherent, and sets of standards will be put into place by the end of 2000. ITS covers the US, European, Japanese, Latin American and rest of world markets for FMS, IVIS, IVNS, ACC, transponders and RDS-TMC.

Allied Business Intelligence Inc is an Oyster Bay, NY-based technology research think tank publishing strategic research on the broadband, wireless, electronics, automation, energy and transportation industries. Details can be found at www.alliedworld.com or by calling 516-624-3113.