Earlier this year, Intelligent Mechatronic Systems (IMS) unveiled its DriveSync connected car/telematics solution, which leverages smartphone technology and a self-installed OBD-II port device to provide both infotainment and vehicle performance/diagnostic capabilities to vehicle owners, OEMs, dealers, insurance companies and other entities.
How does the new DriveSync solution work?
We're linking telematics with infotainment. So on one hand you have an OBD-II port device that punches out data from the vehicle like speed, distance, braking, cornering, and all of the vehicle information, to the back end, and on the other hand you have a smartphone. Those two devices talk to each other, as well as to the back-end systems.
For the OEMs, that diagnostic data is generally hidden. They hid those codes because they want to lock you into their ecosystem. We think there is a value to the OEMs because if one of your biggest costs in terms of the service model is warranty repairs, then if you can proactively diagnose cars and shave a few points off the warranty cost, you can make money on this.
There is also a long purchase cycle for cars, which is more than 11 years now. How is an OEM going to keep engaging those drivers over that period of time? Right now they do it with advertising. You can take that money from advertising and move it to a customer relationship management (CRM) play. An OEM can provide you with information about the health of the car, and how you are driving. That keeps them engaged.
We also have the tap and touch smartphone technology, which is all voice-based. You can send a text, e-mail, update Facebook or Twitter, or stream Internet radio, all using your voice.
It's a very economical and immediate way of turning any car into a connected car.
What are the biggest challenges for adoption of these types of non-OEM telematics solutions?
There are really a few key reasons why it hasn't moved faster. Cost is the first thing. There's also the business model: you have to build a device, ship it out, and manage the data. Once things start to move, then Moore's Law kicks in and the technology costs come down, although they haven't come down as fast as predicted. The second thing is consumer adoption. The OBD-II port is pretty simply, but for some vehicle owners it's really a mystery. If you have a self-installed device, you reach a certain saturation point quickly. Based on what the insurance market has seen, you get about 65 percent of people who will put the device in, but it takes a bit of pushing to get the rest of them to install it. You have to have some carrots and sticks.
The technology is also not elegant yet. The technology is still evolving. When it's not elegant, any barrier you put up causes issues with people. This isn't as easy as linking up a computer in your home or office. The car is really the next place for technology to go, and it's going to become a little bit easier, but there are some perceived challenges there. It's getting better, though. Things are changing.
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