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    2. Telematics: The Dark Horse of eCommerce David Viney & Peter Maronge 6 June 2001 Telematics: the Dark Horse of eCommerceTelematics: the Dark Horse of eCommerce

    3. Introductions Firstly a little about us and our credentials. <click> My name is David Viney and….<talk to slide> <click> Peter is our Telematics lead and….<talk to slide>Firstly a little about us and our credentials. <click> My name is David Viney and….<talk to slide> <click> Peter is our Telematics lead and….<talk to slide>

    4. Outline Agenda Outline Agenda (DV) I am going to kick off the presentation by setting the context and introducing you to both Centrica and theAA.com. <click> Firstly, I am going to tell you a bit about Centrica itself; who we are, what we do and why we are special. 4 slides on that <click> Secondly, I am going to talk you through our strategy, both for the Company as a whole and for our eCommerce area in particular. <click> Thirdly, I am going to focus in for a time on theAA.com, taking you through what we have to offer and our multiple channels to market. <click> I will also take you through some recent research into the global telematics industry, undertaken by UBS Warburgs at the end of last year. Finally, the really interesting part! I will hand over to Peter, who will talk you through our own experiences in Telematics. Peter will also demo some of the software involved and field the more detailed questions I am sure you will have. <click> The key question we hope to have answered by the end of the presentations and your own Q&A will be: {read from slide}Outline Agenda (DV) I am going to kick off the presentation by setting the context and introducing you to both Centrica and theAA.com. <click> Firstly, I am going to tell you a bit about Centrica itself; who we are, what we do and why we are special. 4 slides on that <click> Secondly, I am going to talk you through our strategy, both for the Company as a whole and for our eCommerce area in particular. <click> Thirdly, I am going to focus in for a time on theAA.com, taking you through what we have to offer and our multiple channels to market. <click> I will also take you through some recent research into the global telematics industry, undertaken by UBS Warburgs at the end of last year. Finally, the really interesting part! I will hand over to Peter, who will talk you through our own experiences in Telematics. Peter will also demo some of the software involved and field the more detailed questions I am sure you will have. <click> The key question we hope to have answered by the end of the presentations and your own Q&A will be: {read from slide}

    5. Who we are <click> You will all, no doubt, remember the “Tell Sid” advertising campaign of 1986 - one of the enduring images of the wave of privatisations in the UK. Well, Sid has come a long way since then, including a share price gain overall of over 400%. In February 1997, British Gas plc was demerged into two parts. For Sid it meant a new share certificate; Centrica plc, priced at the princely sum of 42.5 pence . He may not have really understood what he was getting at the time.. But he has certainly not regretted it since. <click> The remainder of BG Group was demerged further in December 1999, creating Lattice Group plc and BG plc. Lattice provides, manages and services infrastructure networks, including technology, energy and property services. It’s core business is transporting gas in the UK, with Transco being its best known trading name. BG plc is an Integrated Gas Major; finding, refining, storing and distributing gas in some twenty countries across four continents. It also owns the rights to use the British Gas brand overseas. <click> Centrica, upon formation, owned the British Gas brand in the UK and the tricky job of billing and collecting from most of the customer households in the UK. <click> We had two major problems to deal with straight away. Firstly, we were saddled with a number of very onerous take or pay contracts. Secondly, there was the impending opening of the gas market to competition in May 1998, with prices firmly controlled thereafter by regulators. The general verdict of the time was that Centrica would fade and die. Even the Morecombe gas field (vested to Centrica to shore up it’s balance sheet) was a declining asset.<click> You will all, no doubt, remember the “Tell Sid” advertising campaign of 1986 - one of the enduring images of the wave of privatisations in the UK. Well, Sid has come a long way since then, including a share price gain overall of over 400%. In February 1997, British Gas plc was demerged into two parts. For Sid it meant a new share certificate; Centrica plc, priced at the princely sum of 42.5 pence . He may not have really understood what he was getting at the time.. But he has certainly not regretted it since. <click> The remainder of BG Group was demerged further in December 1999, creating Lattice Group plc and BG plc. Lattice provides, manages and services infrastructure networks, including technology, energy and property services. It’s core business is transporting gas in the UK, with Transco being its best known trading name. BG plc is an Integrated Gas Major; finding, refining, storing and distributing gas in some twenty countries across four continents. It also owns the rights to use the British Gas brand overseas. <click> Centrica, upon formation, owned the British Gas brand in the UK and the tricky job of billing and collecting from most of the customer households in the UK. <click> We had two major problems to deal with straight away. Firstly, we were saddled with a number of very onerous take or pay contracts. Secondly, there was the impending opening of the gas market to competition in May 1998, with prices firmly controlled thereafter by regulators. The general verdict of the time was that Centrica would fade and die. Even the Morecombe gas field (vested to Centrica to shore up it’s balance sheet) was a declining asset.

    6. What we do The Centrica of today is a very different animal. We renegotiated the take or pay contracts. We have held our gas market share at 70% and actually grown our share of the total energy market to over 40%. <click> Our core business can simply be described as owning the home, the car and the customer. <click> In the home, we supply gas and gas services but now also electricity and telecommunications. Through our dual fuel proposition and otherwise, we now supply 4.4m UK customers with electricity, making us one of the largest RECs in the UK. From a standing start in October 2000, we expect to have over 1m teleco customers in the UK by the end of 2001. By acquiring Direct Energy in Canada and Energy America in the US, we continue to grow that customer base and apply our successful model overseas. <click> On the road, Centrica acquired the AA in September 2000. In it’s first full year within the group, it has been cash positive, with roadside membership at record levels of 11m. In addition to breakdown services, the AA is also very strong in insurance and a number of ancillary services, including warranties, vehicle inspections and car data checks. <click> Goldfish remains one of the most successful new UK brand launches of recent years. Through a JV with Lloyd’s bank, announced in December 2000, we are building the Goldfish Credit Card into a fully fledged online bank. In addition, we have moved successfully into providing personal loans and, most recently, establishing an Independent Financial Advisor through the AA brand.The Centrica of today is a very different animal. We renegotiated the take or pay contracts. We have held our gas market share at 70% and actually grown our share of the total energy market to over 40%. <click> Our core business can simply be described as owning the home, the car and the customer. <click> In the home, we supply gas and gas services but now also electricity and telecommunications. Through our dual fuel proposition and otherwise, we now supply 4.4m UK customers with electricity, making us one of the largest RECs in the UK. From a standing start in October 2000, we expect to have over 1m teleco customers in the UK by the end of 2001. By acquiring Direct Energy in Canada and Energy America in the US, we continue to grow that customer base and apply our successful model overseas. <click> On the road, Centrica acquired the AA in September 2000. In it’s first full year within the group, it has been cash positive, with roadside membership at record levels of 11m. In addition to breakdown services, the AA is also very strong in insurance and a number of ancillary services, including warranties, vehicle inspections and car data checks. <click> Goldfish remains one of the most successful new UK brand launches of recent years. Through a JV with Lloyd’s bank, announced in December 2000, we are building the Goldfish Credit Card into a fully fledged online bank. In addition, we have moved successfully into providing personal loans and, most recently, establishing an Independent Financial Advisor through the AA brand.

    7. Why we are special > 42.5p in 1997 > 246p today > Still rated a strong buy by brokers Why are we special? Well, as you can see, Sid 42p is now worth a great deal more and most brokers expect this phenomenal growth to continue.Why are we special? Well, as you can see, Sid 42p is now worth a great deal more and most brokers expect this phenomenal growth to continue.

    8. Why we are special Shareholder Value growth Among highest in FTSE 100 Customer Centric Lifetime customer value Imitation sincerest flattery Our shareholder value growth has in fact been amongst the highest in the FTSE 100 and the group is now worth more than Ł10bn. The secret? Well the world has woken up to the fact that selling loads of stuff to a large customer base is a pretty good business model. If any of you enjoy reading the Harvard Business Review, you’ll be aware that recent research points to Customer Retention and Loyalty being a direct product of the number of products you sell to any individual. Imitation is the sincerest form of flattery and several other UK plcs, including Powegen and, more recently, BT are waking up to the potential for working the customer base.Our shareholder value growth has in fact been amongst the highest in the FTSE 100 and the group is now worth more than Ł10bn. The secret? Well the world has woken up to the fact that selling loads of stuff to a large customer base is a pretty good business model. If any of you enjoy reading the Harvard Business Review, you’ll be aware that recent research points to Customer Retention and Loyalty being a direct product of the number of products you sell to any individual. Imitation is the sincerest form of flattery and several other UK plcs, including Powegen and, more recently, BT are waking up to the potential for working the customer base.

    9. The Centrica Strategic Programme You’ll be pleased to hear I’m not going to talk you through this slide in detail. As you can probably gather, this is a recent view (which we presented to the City) of the Centrica Medium-term Strategy. The key piece I wanted to pull out for you is the success factors line. The key to our longer term value will be getting a single view of our customers and selling more and more products and services to them. We are ruthless about this. This will mean developing new products and propositions. In some cases, this will be done through acquisition. In most cases, however, we will look to build partnerships to move forward. You’ll note, right in the middle of the slide, our eCommerce propositions. This is not lip service to a city fad. For us, our web propositions are central to our mission to turn a product-silo business into a customer-centric one. This process begins with our web sites, but will run back through our business over time.You’ll be pleased to hear I’m not going to talk you through this slide in detail. As you can probably gather, this is a recent view (which we presented to the City) of the Centrica Medium-term Strategy. The key piece I wanted to pull out for you is the success factors line. The key to our longer term value will be getting a single view of our customers and selling more and more products and services to them. We are ruthless about this. This will mean developing new products and propositions. In some cases, this will be done through acquisition. In most cases, however, we will look to build partnerships to move forward. You’ll note, right in the middle of the slide, our eCommerce propositions. This is not lip service to a city fad. For us, our web propositions are central to our mission to turn a product-silo business into a customer-centric one. This process begins with our web sites, but will run back through our business over time.

    10. eCommerce Objectives Our eCommerce objectives are centred on three cornerstone websites: <click> Goldish.com is on the verge of becoming a fully fledged Internet bank. Watch out for the (soft) launch in the next few weeks <click> House is an exciting new proposition which will ultimately absorb our gas.co.uk and talkgas.co.uk telco site. The proposition really is to own everything in and around the home. Through a series of affinity partnerships and own-build, we will offer everything from home finding & purchase through moving in to utility services and online billing. Launching in November 2001, it will become an online sub-brand of the British Gas brand. Longer term, House will move into the growing J2E world of home automation. Your meter really will read itself! <click> Theaa.com is our most visited site and was, in fact, in the early 90s amongst the top 10 most visited sites in the UK. As an Internet pioneer, it has now been re-invented as the leading motoring & travel portal. The great Getaway one-stop-shop: Where to go; How to get there; Where to stay; What to do; Where to eat. Books, guides & CD-ROMs to take with you when you go. Travelwatch is joined-up transport at its best: Plan your route and get great en-route information, be it for road, rail, tube or coach; Get traffic alerts for your route direct to your PC, Mobile etc. All About Cars is Customer event centric business proposition that bundles together existing AA products and services with a number of new, bought-in elements: Find, check, inspect, finance and buy the ideal car; Protect, insure and warranty your car as you drive; Get a great deal when you sell you car. <click> I’m now going to focus in a little on theAA.com to set the context for our telematics section.Our eCommerce objectives are centred on three cornerstone websites: <click> Goldish.com is on the verge of becoming a fully fledged Internet bank. Watch out for the (soft) launch in the next few weeks <click> House is an exciting new proposition which will ultimately absorb our gas.co.uk and talkgas.co.uk telco site. The proposition really is to own everything in and around the home. Through a series of affinity partnerships and own-build, we will offer everything from home finding & purchase through moving in to utility services and online billing. Launching in November 2001, it will become an online sub-brand of the British Gas brand. Longer term, House will move into the growing J2E world of home automation. Your meter really will read itself! <click> Theaa.com is our most visited site and was, in fact, in the early 90s amongst the top 10 most visited sites in the UK. As an Internet pioneer, it has now been re-invented as the leading motoring & travel portal. The great Getaway one-stop-shop: Where to go; How to get there; Where to stay; What to do; Where to eat. Books, guides & CD-ROMs to take with you when you go. Travelwatch is joined-up transport at its best: Plan your route and get great en-route information, be it for road, rail, tube or coach; Get traffic alerts for your route direct to your PC, Mobile etc. All About Cars is Customer event centric business proposition that bundles together existing AA products and services with a number of new, bought-in elements: Find, check, inspect, finance and buy the ideal car; Protect, insure and warranty your car as you drive; Get a great deal when you sell you car. <click> I’m now going to focus in a little on theAA.com to set the context for our telematics section.

    11. What we have to offer First, the key question for any website.. What do we have to offer? In terms of information assets, products & services, these can be grouped into four main areas: <click> Traffic info. First we obtain traffic speed data, from the Traffic Master sensors in the overhead gantries on major roads. This only tells us where there are problems and how bad they are in terms of driver delay. We augment this information with on the spot reports from our motorbike riders and AA breakdown patrols. This tells us what caused the hold-up and therefore how long it is likely to last. <click> Travel info. To basic data obtained from Navtech and the Ordnance Survey, we add our own unique knowledge. Through our signage business, we have in-depth information on the timing and location of most major UK events. From our atlas business, we add thousands of different points of interest, including banks, petrol stations and Little Chefs to name but a few. From our Hotel Business, we add the location and quality rating of hundreds of UK hotels. Our Publications business brings further information on pubs, restaurants and mush more, including intuitive directions. <click> Our motoring info includes where to find the cheapest petrol, from Petrolbusters.com, acquired in 2000. We also publish the results of car safety tests and other sticky content from our Motoring Policy unit. We window onto Glasses Guide for Used Car Valuations and will soon offer new car sourcing through an affinity deal with Autobytel. <click> Our products and services are numerous and varied, including insurance, breakdown cover and many many more.First, the key question for any website.. What do we have to offer? In terms of information assets, products & services, these can be grouped into four main areas: <click> Traffic info. First we obtain traffic speed data, from the Traffic Master sensors in the overhead gantries on major roads. This only tells us where there are problems and how bad they are in terms of driver delay. We augment this information with on the spot reports from our motorbike riders and AA breakdown patrols. This tells us what caused the hold-up and therefore how long it is likely to last. <click> Travel info. To basic data obtained from Navtech and the Ordnance Survey, we add our own unique knowledge. Through our signage business, we have in-depth information on the timing and location of most major UK events. From our atlas business, we add thousands of different points of interest, including banks, petrol stations and Little Chefs to name but a few. From our Hotel Business, we add the location and quality rating of hundreds of UK hotels. Our Publications business brings further information on pubs, restaurants and mush more, including intuitive directions. <click> Our motoring info includes where to find the cheapest petrol, from Petrolbusters.com, acquired in 2000. We also publish the results of car safety tests and other sticky content from our Motoring Policy unit. We window onto Glasses Guide for Used Car Valuations and will soon offer new car sourcing through an affinity deal with Autobytel. <click> Our products and services are numerous and varied, including insurance, breakdown cover and many many more.

    12. Over 8,500 Sources of T&T Information: Talk to slideTalk to slide

    13. Channels to market As with any e-Business, our channels to market are numerous and varied. Our business today is centred on Radio/Broadcast sales (where we account for over 80% of all UK radio stations’ traffic & travel info), publishing, our 2222 mobile traffic info line and our web site. Our site is one of the largest in the UK, with monthly page impressions of over 1 million. We process 25% of our insurance quotes online and 15% of our insurance sales… a high percentage of which we are very proud. However, our channel profile continues to change and in the future we expect to generate sizeable revenue contributions from Digital TV, chargeable SMS products and in-car telematics. <click> It is telematics that we will focus on for the rest of the presentation.As with any e-Business, our channels to market are numerous and varied. Our business today is centred on Radio/Broadcast sales (where we account for over 80% of all UK radio stations’ traffic & travel info), publishing, our 2222 mobile traffic info line and our web site. Our site is one of the largest in the UK, with monthly page impressions of over 1 million. We process 25% of our insurance quotes online and 15% of our insurance sales… a high percentage of which we are very proud. However, our channel profile continues to change and in the future we expect to generate sizeable revenue contributions from Digital TV, chargeable SMS products and in-car telematics. <click> It is telematics that we will focus on for the rest of the presentation.

    14. Telematics Telematics is a word derived from the German words for telecommunications and information. ..in the automotive industry, telematics refers to the provision of two-way voice and data communication between the vehicle and information service providers Our definition includes “SatNav” systems and more traditional “in-car telematics” Telematics is a word derived from the German words for telecommunications and information. ..in the automotive industry, telematics refers to the provision of two-way voice and data communication between the vehicle and information service providers Our definition includes “SatNav” systems and more traditional “in-car telematics”

    15. The Essence of Telematics Talk to slideTalk to slide

    16. Customer needs In a sense, this can be re-expressed as follows: ‘peace of mind/safety’ is the emotional reason for purchase Information services are the rational reason for purchase In a sense, this can be re-expressed as follows: ‘peace of mind/safety’ is the emotional reason for purchase Information services are the rational reason for purchase

    17. Three Distinct Regions Japan Sizeable lead in market size & technology Lead by Electronics Manufacturers Charge for hardware; free services bundled The telematics market should be considered in three distinct geographic regions - Europe, Japan, and the United States - as each of these regions operates in a unique way. <click> Japan currently has a sizeable lead in telematics. Of the $8billion UBSW estimate the telematics market to currently be worth, Japan accounts for about $5 billion. In addition to size, Japan is also the world leader in technology, having brought to market 2G products such as turn-by-turn navigation and real-time traffic information. The market in Japan is led by navigation hardware manufacturers such as Matsushita, Alpine, and Denso. OEMs do not play a major role. Services are generally bundled for free with the hardware. <click> In the US, progress is hampered by the lack of a ubiquitous digital wireless standard. OEMs lead here, but only through separate companies they have established, in the hope of a future money-spinning sell-off. The model is very much to make revenues through a recurring charge for services. Onstar, for example, charge each subsrciber between $17 and $35 per month. <click> Western Europe, as usual, lies somewhere between the US and Japan, except that, here the players view telematics as remaining a part of their core businesses, seeing it as a critical customer relationship management (CRM) tool in the future. The European approach is perhaps most likely to succeed.The telematics market should be considered in three distinct geographic regions - Europe, Japan, and the United States - as each of these regions operates in a unique way. <click> Japan currently has a sizeable lead in telematics. Of the $8billion UBSW estimate the telematics market to currently be worth, Japan accounts for about $5 billion. In addition to size, Japan is also the world leader in technology, having brought to market 2G products such as turn-by-turn navigation and real-time traffic information. The market in Japan is led by navigation hardware manufacturers such as Matsushita, Alpine, and Denso. OEMs do not play a major role. Services are generally bundled for free with the hardware. <click> In the US, progress is hampered by the lack of a ubiquitous digital wireless standard. OEMs lead here, but only through separate companies they have established, in the hope of a future money-spinning sell-off. The model is very much to make revenues through a recurring charge for services. Onstar, for example, charge each subsrciber between $17 and $35 per month. <click> Western Europe, as usual, lies somewhere between the US and Japan, except that, here the players view telematics as remaining a part of their core businesses, seeing it as a critical customer relationship management (CRM) tool in the future. The European approach is perhaps most likely to succeed.

    18. The ten year view Over the next 10 years, the US and Europe are forecast to catch up with Japan, as the overall market grows ten-fold to nearly $50bn.Over the next 10 years, the US and Europe are forecast to catch up with Japan, as the overall market grows ten-fold to nearly $50bn.

    19. A growing market Dominated by Hardware today Longer term, Services the key to growth It is worth considering briefly how the projected market growth breaks down: <click> Today the market, dominated by Japan, is hardware oriented <click> longer term, services are likely to take over as the main source of revenue for the industry.It is worth considering briefly how the projected market growth breaks down: <click> Today the market, dominated by Japan, is hardware oriented <click> longer term, services are likely to take over as the main source of revenue for the industry.

    20. The two biggies Onstar appears in the US at end of 1997 Reached 1m subscribers in April 2001 Ford in catch-up mode with Wingcast As far as the two US-based biggies are concerned, <click> Although Ford was really first on the scene with its “rescue” system, this position was lost to Onstar, who were the first to create a distictive telematics offering in the US market. Onstar is forecast to maintain it’s lead over Ford Wingcast, who have yet to begin their launch in earnest <click> Onstar reached 1m subscribers in April 1997.. Slightly slower than forecast by UBSW in August 2000, but nonetheless still an impressive early rate of growth. <click> Ford is well positioned to catch up, as Wingcast will be a more mature offering. By 2005, UBSW expect the two big players to be roughly neck-and-neck.As far as the two US-based biggies are concerned, <click> Although Ford was really first on the scene with its “rescue” system, this position was lost to Onstar, who were the first to create a distictive telematics offering in the US market. Onstar is forecast to maintain it’s lead over Ford Wingcast, who have yet to begin their launch in earnest <click> Onstar reached 1m subscribers in April 1997.. Slightly slower than forecast by UBSW in August 2000, but nonetheless still an impressive early rate of growth. <click> Ford is well positioned to catch up, as Wingcast will be a more mature offering. By 2005, UBSW expect the two big players to be roughly neck-and-neck.

    21. Considerations for the future <click> A pertinent issue, not least for the AA, is that 1G telematics outside of Japan has tended to focus on systems to enhance vehicle safety (for example breakdown and emergency buttons). This does not sit well with in-car navigation and traffic systems, which tend to distract the driver. There was a famous incident recently, where a German driver drove his BMW into a river, so convinced was he that his navigation system was showing a bridge. It was, in fact, a ferry. <click> Will the future telematics device be a Palm Pilot in a cradle, a hands-free Nokia WAP phone or an uder-the-bonnet device connected to a dashboard facia? Most pundits believe there is room for all these. The wireless device is not confined to the vehicle, but onboard systems will always have bigger power sources, larger screens and more functionality. <click> Vehicle consoles will need to run on some operating system. Microsoft’s Windows CE for Automotive is the system currently used by most in-vehicle computing systems. However, Java is inherently more stable, flexible, and secure than Windows and typically less consumptive of system resources. <click> Floating car data (FCD) is an idea which turns the vehicle itself into a gatherer of data about traffic flow, road conditions and weather. The vehicles would constantly transmit their positions to some central aggregator, allowing the generation of highly accurate real-time traffic maps which are then fed back to the vehicles. <click> GPS has certain drawbacks. Whilst more accurate than 2.5G Cellular technology for positioning, it relies on line-of-sight with orbiting satellites. GPS does not function well in valleys, or under trees, and does not function at all in tunnels. In the US, the Government control all GPS satellites, and do not guarantee availability to commercial operations in the event of national security emergencies.<click> A pertinent issue, not least for the AA, is that 1G telematics outside of Japan has tended to focus on systems to enhance vehicle safety (for example breakdown and emergency buttons). This does not sit well with in-car navigation and traffic systems, which tend to distract the driver. There was a famous incident recently, where a German driver drove his BMW into a river, so convinced was he that his navigation system was showing a bridge. It was, in fact, a ferry. <click> Will the future telematics device be a Palm Pilot in a cradle, a hands-free Nokia WAP phone or an uder-the-bonnet device connected to a dashboard facia? Most pundits believe there is room for all these. The wireless device is not confined to the vehicle, but onboard systems will always have bigger power sources, larger screens and more functionality. <click> Vehicle consoles will need to run on some operating system. Microsoft’s Windows CE for Automotive is the system currently used by most in-vehicle computing systems. However, Java is inherently more stable, flexible, and secure than Windows and typically less consumptive of system resources. <click> Floating car data (FCD) is an idea which turns the vehicle itself into a gatherer of data about traffic flow, road conditions and weather. The vehicles would constantly transmit their positions to some central aggregator, allowing the generation of highly accurate real-time traffic maps which are then fed back to the vehicles. <click> GPS has certain drawbacks. Whilst more accurate than 2.5G Cellular technology for positioning, it relies on line-of-sight with orbiting satellites. GPS does not function well in valleys, or under trees, and does not function at all in tunnels. In the US, the Government control all GPS satellites, and do not guarantee availability to commercial operations in the event of national security emergencies.

    22. Likely future developments As with most New Media Markets, it is possible now to envisage how telematics offerings will change over the next 10 years. <click> Step 1 offerings focus on establishing a hands-free voice connection between the driver and a call centre agent. Whilst this might sound somewhat arcane, it goes down well with consumers and is currently preferred by risk-averse vehicle manufacturers who want something that works, rather than something clever. It also has the benefit of minimum distraction of the driver, which fits well with the “safe and secure” positioning of early systems. <click> Step 2 offerings, already available in Japan, feature turn-by-turn navigation hardware and real-time traffic information, as well as some automation of basic commands in all centres through the use of IVR technology. <click> Step 3 offerings will essentially resemble “Voice portals” and will be IP-based. This will allow applications such as email to voicemail conversion, news on demand and entertainment offerings. <click> At some point during this development, floating car data is likely to make an appearance. This will enhance the quality of the real time traffic and travel information received by the driver and will go down particularly well in markets where typical commutes exceed 30 minutes (eg. US, UK and France)As with most New Media Markets, it is possible now to envisage how telematics offerings will change over the next 10 years. <click> Step 1 offerings focus on establishing a hands-free voice connection between the driver and a call centre agent. Whilst this might sound somewhat arcane, it goes down well with consumers and is currently preferred by risk-averse vehicle manufacturers who want something that works, rather than something clever. It also has the benefit of minimum distraction of the driver, which fits well with the “safe and secure” positioning of early systems. <click> Step 2 offerings, already available in Japan, feature turn-by-turn navigation hardware and real-time traffic information, as well as some automation of basic commands in all centres through the use of IVR technology. <click> Step 3 offerings will essentially resemble “Voice portals” and will be IP-based. This will allow applications such as email to voicemail conversion, news on demand and entertainment offerings. <click> At some point during this development, floating car data is likely to make an appearance. This will enhance the quality of the real time traffic and travel information received by the driver and will go down particularly well in markets where typical commutes exceed 30 minutes (eg. US, UK and France)

    23. Likely future developments A glimpse of the future can be discerned in the ambitious plans of Peugeot-Citroen’s partnership with Vivendi to luanch the first internet portal for the European motorist.A glimpse of the future can be discerned in the ambitious plans of Peugeot-Citroen’s partnership with Vivendi to luanch the first internet portal for the European motorist.

    24. Our own experiences A long gestation period & some aborted projects Finally close to giving birth Exciting partnership with a major OEM Subject to confidentiality Talk to SlideTalk to Slide

    25. Our Dev Talk to Slide Talk to Slide

    26. Demo: Customer Details & Telematics Functions Talk to Slide Talk to Slide

    27. Demo: Vehicle Position at Street Level Talk to Slide Talk to Slide

    28. Demo: Text & Map View of Local Route Talk to Slide Talk to Slide

    29. Demo: Points of Interest Talk to Slide Talk to Slide

    30. Demo: Added Value for Points of Interest Talk to Slide Talk to Slide

    31. Demo: Vehicle Trail based on GPS Talk to SlideTalk to Slide

    32. The final question Initially, mid-range and high-end marques OEMs take telematics to the mass market Telematics as a core CRM tool for OEMs Guaranteed captive market Stimulates more impulse purchasing So, our final question: “How will L-commerce in general, and telematics, in particular change the way companies reach their customers and the products and services that they sell to them?” <click> Delays to market launch in the UK has ensured a wider market launch. As in the US, Safety and Security will be at the centre of the proposition. However, Step2 information services will also form a central part of the proposition. <click> The presence of major OEMs, and the marketing resources they bring to bear, is the key to taking Telematics to the mass market. <click> In the longer term, just as for ABS brakes and air bags, telematics as a standard fit will become the rule rather than the exception. Typically, the hardware will be installed and it will be up to the motorist to opt in or out of the service. In this sense, it will be an important core feature of how vehicle manufacturers relate to and retain their customers. This means OEMs will wish to own and control the customer relationship. The after sales market will provide the best opportunity for brand penetration by other suppliers. <click> Perhaps a key point is the ability to reach the customer on her normal commute or other journey.. A time when she is essentially a “captive market”. <click> Most revenues for the value chain as a whole will come from the division of monthly charges for service provision. However, L-commerce will lead to more impulse purchasing and perhaps less planning ahead at the start of a journey. For example, the business driver who books his hotel for the night at the last minute.So, our final question: “How will L-commerce in general, and telematics, in particular change the way companies reach their customers and the products and services that they sell to them?” <click> Delays to market launch in the UK has ensured a wider market launch. As in the US, Safety and Security will be at the centre of the proposition. However, Step2 information services will also form a central part of the proposition. <click> The presence of major OEMs, and the marketing resources they bring to bear, is the key to taking Telematics to the mass market. <click> In the longer term, just as for ABS brakes and air bags, telematics as a standard fit will become the rule rather than the exception. Typically, the hardware will be installed and it will be up to the motorist to opt in or out of the service. In this sense, it will be an important core feature of how vehicle manufacturers relate to and retain their customers. This means OEMs will wish to own and control the customer relationship. The after sales market will provide the best opportunity for brand penetration by other suppliers. <click> Perhaps a key point is the ability to reach the customer on her normal commute or other journey.. A time when she is essentially a “captive market”. <click> Most revenues for the value chain as a whole will come from the division of monthly charges for service provision. However, L-commerce will lead to more impulse purchasing and perhaps less planning ahead at the start of a journey. For example, the business driver who books his hotel for the night at the last minute.

    33. Credits: Worldwide Telematics Industry: Eyes on the Road and Hands on the Wheel [Aug 2000] Global Autos Team +1.212.821.2317 Download at: http://www.eye4auto.com/content/ubs_warburg.pdf Other resources: Visit Ford Wingcast at http://www.wingcastmobility.com Visit OnStar at http://www.onstar.com Contact Details We’d like to thank you for listening to our presentation. Please do ask questions now and don’t hesitate to contact us in the future if you’d like to find out more about Telematics, theAA.com or Centrica in general. Thankyou.We’d like to thank you for listening to our presentation. Please do ask questions now and don’t hesitate to contact us in the future if you’d like to find out more about Telematics, theAA.com or Centrica in general. Thankyou.

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