The telematics industry is undergoing a seismic shift at the moment.  One could argue that OnStar started this shift years ago by offering drivers the ability to talk to their vehicles to get restaurant locations, traffic, vehicle diagnostics, and emergency services.  You could buy different applications by subscribing to different service packages.  Ford and Microsoft’s SYNC system took it a step further by using voice commands to activate and control vehicle content (GPS, music, phone, etc.).  Now, we have Microsoft again upstaging itself with its Windows Azure cloud computing system, which will increase the apps available in the car and stream content (e.g. live traffic updates and the online music service Pandora can be streamed directly to the vehicle). 

Clearly, telematics is here to stay. 

Or is it?  The challenger to the telematics industry is likely sitting nearby, or in your hand as you read this.  For almost five years mobile devices, such as the iPhone, Android phones, and the iPad have been providing many of the services that we see being added to vehicle telematics now.  As a friend who travels weekly for work pointed out, the iPhone’s turn-by-turn navigation is the “killer app” for him when he arrives in an unfamiliar city, and he now skips the GPS systems offered by rental fleets.  The decline of separate GPS units is attributed to the growth of smartphones and their navigation apps (often included free with phone service).

Now, Apple has introduced the iPhone 4S with one much-heralded feature: Siri.  The conversational voice-commands application has provided another step towards the smartphone’s domination of the in-vehicle experience.  As Apple’s introductory video showed, Siri can provide many of the navigation features, including real-time traffic updates, that are currently reserved for telematics packages.  How effectively the phone can provide rerouting based on traffic is not yet known, but even if it’s of poor quality today, it won’t take long to catch up.  Google’s Android system offers search, dialing, and typing by voice.  Albeit not as robust as Siri, Voice Actions does provide some voice control over the smartphone.

Clearly, smartphones are killing telematics. 

Or are they? Automotive companies, eager to keep control of the vehicle experience, will make sure that the in-vehicle telematics will almost always better integrate the technology with the operation of the car.  From steering wheel and touch screen inputs to voice commands and multiple integrated displays, the telematics of vehicles are designed to tightly fit with the vehicle driving experience.  In addition, many of the telematics packages, such as SYNC MyFord Touch, Entune, and other Windows Azure platform systems, will integrate some content and apps from smartphones, in essence merging the technology of the vehicle and the phone.  In the near future, the vehicle screens seem likely to gravitate towards the big-screen TV model, where vehicles act as receptor screens for the mobile device brought into the vehicle, rather than their own “stand alone computer.”  The vehicle will still provide information such as diagnostics and performance, but the mobile device will become the main content provider and Internet connection for the vehicle, potentially shifting some costs from auto manufacturers to wireless service providers.

Of course, the wild card in this whole conversation is forthcoming “Distracted Driving” legislation, which now seems inevitable.  How this will impact telematics and smartphone integration is still very much up in the air.  Siri, Voice Actions, and voice-operated telematics systems seem to be enough to placate legislators for now, but as the number of apps available through these tools or in vehicles increases, they will get more scrutiny.