The Connected Car:

Driving the Industry

Forward

Hughes Telematics, Inc. Proprietary & Confidential

Telematics Update Munich

November 2009

Can Telematics Fuel Industry Recovery?Can Telematics Fuel Industry Recovery?Can Telematics Fuel Industry Recovery?Can Telematics Fuel Industry Recovery?

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Can Telematics Fuel Industry Recovery?Can Telematics Fuel Industry Recovery?Can Telematics Fuel Industry Recovery?Can Telematics Fuel Industry Recovery?

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What NEW is Driving this Optimism?What NEW is Driving this Optimism?What NEW is Driving this Optimism?What NEW is Driving this Optimism?

Feature Integration

� Connected Services

� Overnight InnovationConsumer Interest

� Technology

� Connectivity

OEM Cost Reduction

� Device Integration

� Repairs

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Consumer Savings

� Pay as You Drive Insurance

Continues to Grow

Government Regulation

� eCall

� Congestion Charging

� Emissions Reduction

� Car-to-Car Communications

� Driver Information

Let’s Consider the BuyerLet’s Consider the BuyerLet’s Consider the BuyerLet’s Consider the Buyer

� Who is the next generation buyer?

� What do they want?

� How will TSPs deliver it?

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� How will TSPs deliver it?

� When must OEMS deliver?

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What Do Tomorrow’s Buyers Look Like?What Do Tomorrow’s Buyers Look Like?What Do Tomorrow’s Buyers Look Like?What Do Tomorrow’s Buyers Look Like?

� The Next Gen 1

o Under 35 years of age

o Mostly female

o Moderate education

o Avid internet users

2nd highest ownership of

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o 2nd highest ownership of

electronic devices

o Try to stay current with new

technology

o 50% are very interested in

purchasing telematics in

next vehicle

1 GfK Automotive Study, 2007

What Do Tomorrow’s Buyers Look Like?What Do Tomorrow’s Buyers Look Like?What Do Tomorrow’s Buyers Look Like?What Do Tomorrow’s Buyers Look Like?

� The Mega Techies 1

o Under 35 years of age

o Mostly male

o College Grads

o Actively adopt new technology

o Want instant access

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o Want instant access

o Highest ownership of electronic

devices

o 70% are very interested in

purchasing telematics in next

vehicle

1 GfK Automotive Study, 2007

Consumers Crave ConnectivityConsumers Crave ConnectivityConsumers Crave ConnectivityConsumers Crave Connectivity

� Smartphones were 21% of

European mobile phone sales

in Q2 ‘09 – IDC

� Mobile Internet adoption is

set to grow to 39 percent in

Western Europe in 2014 from

13 percent in 2008.– Forrester

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13 percent in 2008.– Forrester

Research

� International Facebook users

grew from 34 million at the

beginning of ‘08 to 95 million

users in ‘09 – Facebook

In Fact In Fact In Fact In Fact –––– Consumers Are ObsessedConsumers Are ObsessedConsumers Are ObsessedConsumers Are Obsessed

� The average European

averages 4 texts a day;

teenagers can average as high

as 100. – Tomi Ahonen Mobile

Telecom Annual Review 2009

� In February 2009, Facebook

accounted for 4.1% of all

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accounted for 4.1% of all

minutes spent online in Europe.

– ComScore

� 77% of Europeans could not

live without daily access to the

internet, compared to 54% for

access to a car. – AMD & YouGov

Buyer Values Are Changing Buyer Values Are Changing Buyer Values Are Changing Buyer Values Are Changing ---- DramaticallyDramaticallyDramaticallyDramatically

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Buyer Values Are Changing Buyer Values Are Changing Buyer Values Are Changing Buyer Values Are Changing –––– DramaticallyDramaticallyDramaticallyDramatically2222

� Thrifty

o Virtual Accessories, Mobile

Coupons, Social Apps, PAYD, SVT

Insurance Discounts

� Adaptability

o OTA Reflash, Application Store,

Mobile Apps, Web Personalization

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� Consumer to Consumer

o Social Apps, Web Affinity Groups

� Green

o Diagnostics, Emissions, Eco

Navigation, Smart Charging

2 Consumer Psychology, The Economist, April 2009

Driving Connected: Driving Connected: Driving Connected: Driving Connected:

High Interest

Daily Utility

Opportunities

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Safety and Security

Navigation

Convenience

Diagnostics

Infotainment

High D

aily

Utility

Opportunities

Driving Connected: The OpportunityDriving Connected: The OpportunityDriving Connected: The OpportunityDriving Connected: The OpportunityEnhancements

Peace of Mind

NavigationPOI Search

Traffic ProductivityOTA Updates

Social Apps

Info On Demand

Streaming

Media

Services that

Create Daily Utility

Opportunities to

Lifestyle

M-Commerce

Mobile Apps

Weather

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High Integration

Low D

aily

Utility

InfotainmentNavigation DiagnosticsSafety &

Security

ACN/E-Call

Diagnostics

Emissions

Convenience

Internet

Gaming

Concierge

Low Integration

Core ServicesOpportunities to

Create LoyaltyEco-Telematics

Dealer Connect

VII

How to Deliver Today’s ServicesHow to Deliver Today’s ServicesHow to Deliver Today’s ServicesHow to Deliver Today’s Services

� Flexible and Scalable Architecture

� Supports Rapid Service and 3rd Party Integration

� Multiple HMIs

� Multiple Hardware Platforms

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How to Deliver Tomorrow’s ServicesHow to Deliver Tomorrow’s ServicesHow to Deliver Tomorrow’s ServicesHow to Deliver Tomorrow’s Services

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Telematics AvailabilityTelematics AvailabilityTelematics AvailabilityTelematics Availability

30%

40%

50%

60%

70%

Percentage of New Cars Shipping with Telematics Percentage of New Cars Shipping with Telematics Percentage of New Cars Shipping with Telematics Percentage of New Cars Shipping with Telematics in Europein Europein Europein Europe3333

Research suggests 65% of vehicles

will ship with telematics by 2014

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0%

10%

20%

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

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3 ABI Research, 2009

Willingness to PayWillingness to PayWillingness to PayWillingness to Pay

� PEoD for Safety and

Security is only -0.13. – GfK Automotive

� 48% of people are

definitely/probably

interested in In-

Vehicle Internet. – JPDA,

0%

10%

20%

30%

40%

50%

60%

70%

$10 $15 $20 $25

Safety & Security

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Vehicle Internet. – JPDA,

2009

� 52% of people are

definitely/probably

interested in Personal

Assistance Safety

Services. – JDPA, 2009

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$10 $15 $20 $25

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

$5 $8 $11 $14

Navigation

TimelineTimelineTimelineTimeline

� “By 2012, the majority of

vehicle manufacturers will

concentrate product

development efforts for

mature markets on enabling

wireless data connectivity in

more than half of their next-

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more than half of their next-

generation cars.” – Gartner

Predicts 2009

� “A critical turning point for

vehicle ICT solutions is only

two model generations away.” – Gartner

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The Hughes Telematics ResponseThe Hughes Telematics ResponseThe Hughes Telematics ResponseThe Hughes Telematics Response

� Keys for Success

o Develop a flexible architecture for future growth

o Look beyond current interest levels and build towards latent

consumer trends

o Break free from stale business models

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o Break free from stale business models

o In a word – Simplicity

o Integrate with the rest of the ‘connected’ ecosystem

o ‘Cool’ never goes out of style

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Contacting Hughes TelematicsContacting Hughes TelematicsContacting Hughes TelematicsContacting Hughes Telematics

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