June 2004

1. TELEMATICS: The Last Missing Link for Ubiquitous Society June 2004 J. H. Derick Sohn, Ph. D. University of Seoul dericks@unitel.co.kr

2. TELEMATICS AND INTELLIGENT VEHICLE TELEMATICS AND INTELLIGENT VEHICLE

3. TELEMATICS AND INTELLIGENT VEHICLE INTELLIGENT VEHICLE: THE FUTURE CAR Intelligent Vehicle: That enhances user convenience and social requirements by providing safer driving and by creating entirely new functions, without affecting the environment. Navigation Traffic Information Accidents/Emergency Anti-Theft LBS Entertainment Mobile-Commerce E-mail Automotive-IT Integration

4. TELEMATICS AND INTELLIGENT VEHICLE TELEMATICS: IN THE BEGINNING Traffic Information Services Dynamic Real Time Routing TeleAid Intelligent Emergency Call System Emergency/Accidents Safety/Security Routing Information Navigation/Traffic Volume Direction/Navigation Information Before you hit the road…

5. New Type of Mobile Communication Total Traffic Management System Infrastructure Automotive Integration Distribution/Logistics Taking full advantage of IT TELEMATICS AND INTELLIGENT VEHICLE BUSINESS APPLICATIONS: TELEMATICS SERVICES Car Multimedia Transport Traffic Management Navigation Voice Based eMail LBS Emergency Services Car Intelligence Driver Support. Expanded Functions of Automobiles. Full Integration with Social Infrastructure. Logistics Facilities Logistics Management ETC: Electronic Toll Collection

6. TELEMATICS AND INTELLIGENT VEHICLE MOBILE PORTAL • AccidentAssist • Remote Diagnotics • Remote Door Unlock • Theft Tracking SAFETY/ SECURITY • Navigation • Routing • Dynamic Traffic Information TRAFFIC INFORMATION Mobile Portal • LBS • M-Commerce • Voice Integrated E-Mail PERSONAL INFORMATION/ ENTERTAINMENT

7. Analog Devices • Hitachi • Infineon • Intel • Motorola TELEMATICS AND INTELLIGENT VEHICLE TELEMATICS SERVICE REQUIREMENTS SERVICE PROVIDERS GPS CHIP/MODULE PROVIDERS • ATX • OnStar • Tegaron • Monet • NATE/SK Telecom • Analog Devices • Infineon • Motorola • SiRF • SnapTrack • Trimble • Picci TELEMATICS PROCESSING UNIT VENDORS EQUIPMENT PROVIDERS • Alpine • Clarion • Code Technologies • Delphi • Motorola • Siemens • Visteon VOICE RECOGNITION SOFTWARE VENDORS • IBM • ScanSoft (L&H) • Visteon

8. TELEMATICS AND INTELLIGENT VEHICLE MOBILE SERVICES STRUCTURE Right Data, Right Time, Right Person DIS Internet Access Entertainment Total LIT Access Mobile Portal M- Commerce M-Business Applications ENABLERS DEVICE NETWORK PLATFORM SOLUTION PDA Handsets Multifunction Display HMI Wired/Wireless Integration SP Business Business Solutions Data Management IT Platform Access Hosting INTEGRATION!!!!

9. TELEMATICS AND INTELLIGENT VEHICLE CONVERGENCE: SOMETHING NEW TSP Telematics Service Provider Japan & Korea US & Europe Tentative Conclusion: Western Model worked better.

10. US$ Million 4,000 3,000 2,000 1,000 0 2000 2001 2002 2003 2004 2005 2006 2007 TELEMATICS AND INTELLIGENT VEHICLE TELEMATICS SERVICES Telematics Market Forecast Mobility Services Source: Mindbranch Reseach, 2002 Automotive Telematics Consumer Telematics • ITS/Navigation • ERA • Remote Diagnosis • Wireless Service Not Essential. • E-Mail, Computing, Internet Access • News, Shopping • Entertainment (Music, DVD) • LBS (Location Based Services)

11. TELEMATICS AND UBIQUITOUS SOCIETY TELEMATICS AND UBIQUITOUS SOCIETY

12. TELEMATICS AND UBIQUITOUS SOCIETY VISION: THE IT ERA UBIQUITOUS COMMUNICATION Anytime, Anywhere, Any Device

13. TELEMATICS AND UBIQUITOUS SOCIETY UBIQUITOUS COMPUTING Mobile Computing Mobile UBIQUITOUS COMPUTING Pervasive Computing Today’s Computing Wired Visible Invisible Anytime, Anywhere, Any Device Users not recognizant or unaware of their computing environment Small & Intelligent Digital Devices (One Person, Many Computers) Internalized Computing Wearable Computing

14. TELEMATICS AND UBIQUITOUS SOCIETY UBIQUITOUS COMPUTING Home Office And on the Road….

15. TELEMATICS AND UBIQUITOUS SOCIETY EVOLUTION PHASES OF IT REVOLUTION LAST MISSING LINK!!! Phase 1 Phase 2 Phase 3 Early 1990’s Mid 1990’s 2000’s WIRED Groupware ERP E-Business TELEMATICS Automotive as Digital Device On & Off Board Integration LBS/ITS/Telematics Multimedia Devices WIRELESS Pager Cell Phone PDA

16. TELEMATICS AND UBIQUITOUS SOCIETY E-BUSINESS AND DATA 구매 생산/ Operation 영업 공급자 고객 Workforce Optimization SCM CRM DATA MANAGEMENT TELEMATICS DATA MANAGEMENT (B2B) Simulation Decision Support Optimization

17. TELEMATICS AND UBIQUITOUS SOCIETY LAGGING TELEMATICS MARKET DEVELOPMENT Delays in Telematics Market Development Value Proposition & Business Model Lack of Infrastucture • Limited consumer interest: Mainly on navigation and ERA. • Lack of bundled services, based on technology-marketing combination. • Differentiation failure from substitute services. • Huge amount of early investment necessary. • Inter-industry cooperation/resource allocation faulure Low Customer Support & High Cost Structure • Lacking customer base. • High prices. Enlarging Financial Losses!!!

18. TELEMATICS AND UBIQUITOUS SOCIETY VALUE PROPOSITION Strong PUSH from Service Providers MUST HAVE Limited PULL From Convinced Customers NICE TO HAVE Lacking CUSTOMER VALUE PROPOSITION & BUSINESS MODEL

19. TELEMATICS AND UBIQUITOUS SOCIETY TELEMATICS SERVICE DEVELOPMENT • Accurate Profiling of Prospective Customers. • Priotization of Customers’ Implicit Needs. • Bundled Service Offering. • BUSINESS MODEL and Roadmap for Additional Revenue Sources Step 1 Step 2 Step 3 Customer PROFILING Service BUNDLING Additional REVENUE Telematics Data Management • CRM, Wireless Hosting Service, Managed Content Delivery Service • M2M Telematics

20. B2B/B2C INTEGRATION M-Commerce Community B2C M-Business M-Solution B2C/B2B Integrated M-Commerce Telematics Data Mgmt. B2C M-Business M-Solution TELEMATICS AND UBIQUITOUS SOCIETY POSSIBLE APPROACHES B2C Approach Concurrent Entry Speedy Implementation Integrated Approach

21. 1999 2004 CAGR (%) 489 695 7.3 Content Software Applications 115 235 15.1 ConsumerSolutions BusinessSolutions Portal/MediationSolutions 47 233 37.7 Communications Solutions Web Hosting Services Internet Access Services 31 82 21.9 Data Transport Services Wireless Voice Services 225 430 13.8 Wireline Voice Services 564 815 7.6 TELEMATICS AND UBIQUITOUS SOCIETY TELEMATICS BASED SOLUTION SERVICES Service Provider Revenue • Diversification into Solution/Contents • Ubiquitous Service through Telematics US$ Billion • M-Commerce Realization • Corporate Mobile Intranet/Extranet/Wireless E-Business Application SEAMLESS USER ENVIRONMENT

22. TELEMATICS AND UBIQUITOUS SOCIETY BUSINESS MODEL: REVENUE SOURCES Business Model Service Scope Platform Contents Partnership Network

23. Automotive Revenue SMB 1 SMB 2 SMB 3 TELEMATICS AND UBIQUITOUS SOCIETY IMPACT ON REVENUE To Be As Is Automotive Revenue Contents Access Airtime Service Application LBS

24. TELEMATICS AND UBIQUITOUS SOCIETY Understanding Environments Understanding Customers Understanding Competitions Understanding Our Capability

25. 미국 서유럽 일본 • 다중언어/문화권 • 국가간 여행 용이 • Cellular 및 SMS 활성화 • Sq. Mile 당 차량 92대 • 동일문화권 • Navigation의 어려움 • 강력한 ITS 장기 Vision • Packet-based cell phone • Sq. Mile 당 차량 493대 • 넓은 지역 • Wireless Coverage 부족 • 4대 대형 이동통신사 • Sq. Mile 당 차량 58대 시장특성 • 여행정보 • 실시간 교통정보 • Navigation • 안전/Security • 여행정보 • 실시간 교통정보 • Navigation • 안전/Security • 안전/Security • Content 및 LBS 정보 • Cellular와의 통합 • Navigation Telematics 주안점 • OnStar와의 경쟁 • 교통사고 서비스 • Active Safety systems • Mobile 정보 Website • 휴대폰 통합 • Active safety systems • 정부주도 ITS • Web cell phone usage • Active safety systems 시장원동력 Telematics 전략 • Safety/Security에 Content와 Service 등 부가가치 제공 • 휴대폰/SMS 네트워크의 활용 • Navigation System과 휴대폰 Network의 활용 • Navigation System 100만 • Telematics 차량 350만대 • Telematics 사용자 250만 • Navigation System 200만 이상 • Telematics 차량 5만대 미만 • Navigation System 600만 이상 • VICS 수신기 400만대 이상 • Telematics 차량 4만대 미만 현재 시장상황 TELEMATICS AND UBIQUITOUS SOCIETY 한국시장의 특성 • 현재 Telematics Service를 주도하는 시장은 미국, 서유럽, 일본임. 그러나 이 3대시장은 서로 뚜렷이 구분되는 특성을 가지고 있음. • 한국시장은 일본과 상당히 유사한 모습을 보이고 있으나, 적절한 Business Model을 개발하기 위해서는 그 특성을 주의깊게 분석해야 함.