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TomTom slams telematics industry

Date: 08 June 2010

TomTom has slammed the telematics industry saying it is "failing to capture the real value of its offerings and is not building sustainable business models for the long run".

Michael Geffroy, vice president international sales for TomTom Work, the firm's commercial vehicle fleet division, said: "I am frequently asked why this industry hasn't achieved general acceptance or market penetration greater than 50% of the CV market. Moreover, why hasn't the dramatic decline in the costs of technology in recent years (wireless data, processors, memory, LCDs, maps, etc) fuelled the adoption levels predicted?

"It is my belief that in general most vendors are failing to capture the real value of their offerings and are not building sustainable business models for the long run.

He added: "It is well known that both in Europe and North America, penetration rates among the LCV population are on average less than 10% in most market segments. Although growth rates began to improve pre-recession, the current economic climate has created more havoc by stalling growth for most sellers/

Geffroy thinks telematics companies need to build business models that produce customer value and drive customer confidence.

He added that most businesses "have underestimated the cost of developing and supporting a high-quality telematics service platform - a telematics service platform needs specialised experts in hardware and firmware, web-based applications, wireless communications, network operations, and vehicle systems".

He concluded: "The challenge to providers is to find, train, retain, and continually pay for these specialised resources given downward pricing pressure from the market."

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