Copyright 2007, Traffic World, Inc.
Rapid changes in technology and major acquisitions are redrawing the map to the fleet management services market.
As computers and other electronic devices become smaller and more powerful and cell phone networks handle more data, technology companies are blending systems used to manage fleets of trucks and communicate with drivers with the latest onboard digital navigation and routing systems.
Some systems are available today, but more may come in the next few years, as companies that make consumer automotive navigation products target commercial transportation companies. That could challenge existing suppliers to add new features to their products and perhaps benefit managers of smaller fleets that can''t afford current mobile communications and routing technology.
Pending major acquisitions of digital map suppliers by portable communications providers could spur the market. Nokia offered $8.1 billion for Chicago-based Navteq, a large mapping data provider, around the same time early this month that Dutch navigation systems company Tomtom formalized an offer to buy digital map supplier Tele Atlas.
Portable navigation devices, or PNDs, integrate large, high-resolution color displays with fast microprocessors, capacious hard drives and software to manipulate mapping data in handheld devices suitable for use in moving vehicles. PND industry revenue worldwide hit $4.2 billion last year; 12.7 million units were sold in 2006.
Alongside these products, cell phone manufacturers have been bulking up their devices with increased on-board memory or slots to hold removable memory cards, as well as larger displays, GPS and wireless communication modules.
The proposed mergers suggest a convergence of portable navigation technologies with cell phone networks.
"What we''re seeing is a sort of feature-device convergence which will occur, we expect, around 2010," said Richard Robinson, principal automotive analyst at consulting firm iSuppli.
For some, that convergence is already here. ALK Technologies, Princeton, N.J., offers CoPilot GPS, which blends mapping and routing software, mobile communications and the global positioning satellite network.
CoPilot is available in several versions for different types of devices and operations, including CoPilot Truck, which ALK introduced in 2001. It operates on Pocket PCs, Pocket PC Phones and laptop computers. Other versions aimed at different types of fleets and consumer are available on smartphones, Treos and other devices.
The company recently signed an agreement to distribute CoPilot Truck through Barjan outlets at TravelCenters of America truckstops nationwide.
Alain L. Kornhauser, founder and chairman of ALK, said the Nokia-Navteq and Tomtom-Tele Atlas deals indicate the PND industry may take a different route than his company.
Those companies appear to be planning to offer systems based on existing onboard devices, using partners or acquisitions to add communications capability for an additional cost. PND maker Garmin International is on that road. It says it will use partnerships with content vendors to fuel its small but expanding (99 percent growth in its automotive and fleet tracking sales, to $508 million, from second quarter 2006 to second quarter 2007) sales of mobile mapping and tracking devices.
"Dynamic content is something that we are continually adding to our devices and something that fleet management services would be able to take advantage of," said Jessica Myers, spokesperson for Garmin. "Once you can provide a driver with that, they are able to make better decisions while they''re driving, being more efficient."
For Kornhauser, the critical element isn''t the onboard device but the communications network - the phone.
"The (portable navigation) device becomes a phone, is the way I look at it, because without the phone (the device) may have value to the driver but it doesn''t have value to the system," said Kornhauser. By installing mapping and routing software on GPS-equipped phones, ALK is able to link them to its FleetCenter mobile asset management system, used by dispatchers at truck terminals or company offices.
Kornhauser said large capacity hard drives and powerful microprocessors allow modern handhelds to store and use most of the mapping and routing information a trucker needs to get through a day''s route. Traffic and weather updates, in-transit routing changes and other variable data can be transmitted over standard cell phone networks without need for proprietary network bandwidths that would be excessive.
Continuous feedback between drivers and their fleet managers may be what carriers are waiting for. "The personal navigation device evolves into the personal navigation phone," Kornhauser said.