-- =DJ Laws Curbing Car Cell Phone Use To Boost Device Makers --
By Jocelyn Parker
Of DOW JONES NEWSWIRES
(This story was originally published late Wednesday.)
DETROIT (Dow Jones)--New Yorkers aren't the only ones prohibited from using
cell phones while tooling down the road. They have a lot of company - more than
20 nations now ban in-vehicle cell-phone use.
And millions more drivers may soon face such restrictions as at least 39
states are considering hands-free cell phone legislation.
Analysts say this swelling wave of potential legislation means more than just
safer highways - it could translate into a windfall for makers of devices that
allow people to use cell phones hands-free. Specifically, auto-parts makers and
telematics companies - which develop in-vehicle communications - could see a
boon in the near future.
Such legislation increases the need for the service and hardware telematic
companies supply, and it would probably lead to partnerships between suppliers
and cell phone makers as drivers will eventually need a wireless way to talk, as
well as dial phone numbers in their cars. And analysts predict an uptick in
spending at telematics companies, as they look to come up with new technology.
Assuming that many states will pass laws similar to New York's, the telematics
industry will likely grow to a $20 billion market in 2006 from a $1.6 billion
market this year, according to Forrester Research, an independent, emerging
technology research firm.
As it stands now, the New York ban simply prohibits drivers from holding the
cell phone while driving - but allows drivers to talk on the phone using a
headset. At some point, though, New York and other states might also restrict
drivers from dialing phone numbers, which will spark the need for
voice-recognition systems in vehicles, said Brett Hoselton, an auto analyst with
McDonald Investments.
"If you are a Nokia and 70% of airtime minutes are used in the car, you'd
better get on the ball if you don't want to lose business," Hoselton said.
"Nokia is going to figure out a solution to work it (voice-recognition phones)
into the car."
According to J.D. Power and Associates, drivers think it's more distracting to
dial a number on a cell phone than it is to eat, drink and do other activities.
The firm said 64% of nearly 13,000 drivers surveyed said dialing while driving
is very distracting, while only 30% said talking on the phone while driving is
distracting.
Hoselton said state government officials will eventually think the same way.
The Race To Develop The Right Technology
Auto-parts maker Johnson Controls Inc. (JCI) is one of several companies
developing devices that enable hands-free communication in cars and trucks. The
supplier is working on technology that would take an existing speaker and
microphone inside a vehicle and add a Bluetooth node - a low-cost radio system
that wirelessly links electronic devices with each other - to connect the car
with a cell phone. This would eliminate the need for dialing because the system
is voice activated, said Jim Geschke, vice president of Electronics Integration
for Johnson Controls.
Geschke said Johnson Controls is working with cell phone makers such as Nokia
Corp. (NOK), Motorola Inc. (MOT) and Ericsson AB to develop such devices, but
it's still a question as to which cell phones the system will be compatible
with.
The company is also in talks with several auto makers to install this
technology - which is expected to hit the market around 2003 or 2004 - but he
declined to say which ones.
Telematics companies such as General Motors Corp.'s (GM) OnStar unit and Ford
Motor Co.'s (F) and Qualcomm Inc.'s (QCOM) Wingcast are already way ahead of the
curve on in-car communication technology, analysts say.
For instance, Ford said in July that it had signed a $48 million contract with
Cellport Systems of Boulder, Colo., for the installation of hands-free,
voice-activated cell phones in some 2002 Ford models. Ford said Wingcast's
system and Cellport's system have the potential to work together.
DaimlerChrysler (DCX) also said last week that it is partnering with AT&T
Wireless Services Inc. (AWE) to develop voice and data communications systems in
Mercedes-Benz, Freightliner and Chrysler cars and trucks in North America.
OnStar's Near-Term Advantage - And Limitations
OnStar also has a system called "Personal Calling," which allows subscribers
to use voice recognition technology to place hands-free, voice-activated calls
on a nationwide network. A microphone is embedded in the vehicle and the
driver's conversation is heard through the sound system speakers.
Personal Calling is available on 2001 vehicles equipped with OnStar - such as
the Chevrolet Blazer and the Pontiac Bonneville - from $199 to $399 per year,
said Rod Egdorf, vice president of OnStar's wireless business. The company
started developing the system in the past year and a half, he said.
"We positioned OnStar Personal Calling well before legislation came about,"
Egdorf said. "We think handsfree communication provides a safer environment."
Analysts, nevertheless, say telematics services companies such as OnStar might
only be providing a short-term solution to hands-free communication in vehicles.
Even though the voice activation technology is readily available with OnStar's
Personal Calling, it isn't compatible with any other cellphones other than the
ones already built into the vehicles, said Jim Hall, an automotive analyst with
AutoPacific Inc. in Southfield, Mich.
For that reason, companies that use Bluetooth technology, such as Johnson
Controls, will benefit the most long term because it can connect vehicles with a
consumer's existing hand-held cell phone. Consumers would rather use a phone
they already have than use a separate phone that's built into a vehicle, Hall
said.
Bluetooth will also prevent telematics devices from becoming obsolete because
it will connect with constantly changing cell phones.
"In the near term, OnStar has an advantage," said Jim Hall, an automotive
analyst with AutoPacific Inc. in Southfield, Mich. "But the guys who will
benefit are the ones who can make my regular cell phone a hands-free phone."
-By Jocelyn Parker, Dow Jones Newswires, 313-963-7810
(END) DOW JONES NEWS 08-16-01 |
