New Research Signals Telematics Market Shift as Consumers Take the Driver’s Seat

Hughes Telematics research shows buyers are gearing up to make purchase decisions based on vehicle telematics services

ATLANTA – May 31, 2007 – According to new research from Hughes Telematics, Inc., in-vehicle telematics – or, services powered by wireless and satellite in-car communications – are no longer simply for gadget gurus or purchasers of high-end vehicle trim levels. Based on the research, consumers now not only expect safety and emergency telematics services to be standard in a new vehicle; they are also increasingly interested in services once deemed ‘futuristic,’ such as remote diagnostics and integrated infotainment.

The research, conducted by J.D. Power and Associates for Hughes Telematics, was presented at the recent 2007 Detroit Telematics Update conference, an annual gathering of vehicle telematics and automotive industry leaders.

“As the benefits of telematics services become more evident to a growing number of consumers, we are seeing clear signals that they are viewing diagnostics and integrated infotainment as ‘need to have’ versus ‘nice to have’,” says Erik Goldman, president of Hughes Telematics. “Car buyers have already fully embraced the need for safety and emergency services, and in fact tend to expect features like automatic crash notification integrated into their next car.” Goldman points out that buyers will next look to manufacturers for personalized telematics services that can further improve their driving experience and lifestyle.

According to the study, consumer interest in telematics features has shifted dramatically. In the past decade, the services associated with a connected car were pushed more by the manufacturers and the industry instead of being driven by customer demand. This new research shows that the market has shifted to a consumer-driven model.

According to qualitative research conducted during a series of focus groups across the nation, consumer interest and expectations are largely focused on services and benefits that meet these criteria:

• “Cool” never goes out of style – drivers like services and benefits that have a high “Wow” factor
• Safety sells – security and safety services lead in terms of immediate demand
• Security isn’t optional – consumers want safety and security services as part of a standard equipment package, much like air bags
• Use it or lose it – daily utility is key to long term take rates, so services must offer value each and every day
• Infotainment matters – seamlessly integrated in-car information and entertainment, packaged to the consumer’s unique needs, is high on wish lists
• It’s all about me - consumers want personalization and flexibility, much like personalized ring tones