© Copyright 2005 Connected Vehicle Trade Association ™ Telematics NetSeminar Scott McCormick Connected Vehicle Trade Association™

© Copyright 2005 Connected Vehicle Trade Association ™ Delivering Telematics The industry has struggled with delivering commercially viable telematics systems. –First and second generation systems were expensive and required a self-contained infrastructure –Automaker-independent systems relied on intellectual property of specific suppliers –After market devices violated vehicle warranty and caused problems due to RF interference, power consumption and driver distraction

© Copyright 2005 Connected Vehicle Trade Association ™ In asking “when” we first need to understand adoption cycles When Will Telematics be Successful?

© Copyright 2005 Connected Vehicle Trade Association ™ The Evolution of a Solution All significant changes undergo a process of experimentation, development and delivery mechanisms prior to adoption. During times of heavy experimentation, even faulty technologies and architectures can gain temporary acceptance. The experimentation also comes in the form of new alliances, business models, and deployment alternatives. Reliance on a single ‘killer’ application, single delivery mechanism, or single technology fragments the market into niche areas – none of which will find universal appeal Adoption success comes from clear benefits, standard technologies and ecosystem readiness.

© Copyright 2005 Connected Vehicle Trade Association ™ Key Success Factors Clear Benefits Cost Efficient Standard- ized ScalableSecure Inter- operable Ecosystem Aligned OEM Buy- in Infra- structure ready Customer Buy-in All substantive advances require the adoption by, and support of, the Social, Business, Technical and Policy stakeholders. Once the entire set of interests affected by the change are aligned, adoption will commence at A significant rate What effects the Adoption Rate?

© Copyright 2005 Connected Vehicle Trade Association ™ So What is Needed? The Telematic Solution is not one means of communication, an application or a specific service. It is a process of providing end-user value along common protocols, conduits and delivery mechanisms In order to provide a common means of delivering content to vehicles, and acquiring useful information from the mobile traffic, certain elements must be available to all the stakeholders –Communication protocols must be universally acceptable –Vehicle and stationary transponders must be standardized so that all automakers can embed –The information provisioning framework must be useable for both commercial and safety applications There needs to be a compelling motivation to collaborate and consense on the framework for creating this vehicle communication paradigm.

© Copyright 2005 Connected Vehicle Trade Association ™ Why is Safety one Justification? Road injuries and fatalities are unbearable in both human and financial terms –40 million disability-adjusted life years lost annually –19 fatalities per 100,000 people, annually worldwide, at an estimated cost of $450 billion –The 1.2 million world road fatalities represents 23% of the world’s injury mortality It is estimated that new technologies can reduce these fatalities by 40% Deployment of a communications system to reduce accidents and congestion.

© Copyright 2005 Connected Vehicle Trade Association ™ How Expensive is Congestion? The average American spends 46 hours in congested traffic annually. The average European spends 66 hours. One third of the average travel time is spent in congestion – equal to 11 billion hours of delay in the US and Japan alone (2% of the GDP) Worldwide, the wasted fuel, time and related cost is over $1 trillion annually Reducing congestion reduces accidents, improves efficiency and saves time and money.

© Copyright 2005 Connected Vehicle Trade Association ™ Solution: Interdependency Governments and emergency response systems need to be integrated Emergency device suppliers must be coordinated with communications platform Frequencies used need to be standardized internationally and made available in major countries Communications infrastructure need to be multichannel, pervasive in a territory and 100% reliable and secure Car software must be 100% secure from attacks, disturbance or false-manipulations Dealers will need to be trained to maintain and upgrade these platforms Nomadic devices have different lifecycles than the car and thus need to be car-agnostic as well as robust and evolutive

© Copyright 2005 Connected Vehicle Trade Association ™ The Stepping Stone to Commercial Telematics Without a pervasive and compelling reason to build out a communications solution, commercial telematics will remain a localized and expensive technology With a broad collaboration that incorporates all stakeholders, from government through private entities, we have an opportunity to add both social and commercial value on a tremendous scale Once the infrastructure and delivery protocols are in place, commercial Telematics will have a common platform to add user-specific value that works acceptably within the HMI for each vehicle.

© Copyright 2005 Connected Vehicle Trade Association ™ Scott McCormick President Connected Vehicle Trade Association