Overview

This study was designed to complement the U.S. Fleet AVL Market Study, released by C.J. Driscoll & Associates in February 2003, which analyzes the size of the potential market for fleet vehicle location systems, market trends and major suppliers. The new Commercial Telematics Systems and Services Study was partially funded by nine companies, including leading U.S. cellular operators, telematics equipment and service providers, fleet vehicle leasing companies and suppliers of telematics technology. Charter subscribers include AT&T Wireless Services, Autodesk Location Services, GE Fleet Services, Nextel, QUALCOMM, SkyTel, Sprint PCS, Telcontar and Thales Navigation.

This comprehensive new study is based on a nationwide telephone of 400 fleet operators. Survey participants included service, delivery and utility fleets, as well as transportation, government and construction fleets. The sample included a balance of small and large fleets and operators of all major classes of vehicles. All regions of the U.S. are represented in the survey.

Study Provides Answers to Key Questions

• Which telematic services are of greatest interest to fleet operators?
• How much will fleet operators pay for individual telematic services?
• How much will fleet operators pay for a package of preferred telematic services?
• Which types of fleets (e.g. service, delivery, transportation) are most interested in vehicle location and other telematic services?
• How do factors such as fleet size and class of vehicles impact interest in telematic services?
• Are fleets that are actively dispatched more interested in vehicle location and other services than those operating on fixed routes?
• How do fleet managers currently communicate with their drivers? e.g. cellular phone, two-way radios, pagers
• What percentage of fleet managers are aware of any suppliers of fleet vehicle location systems or services? Which suppliers?
• What types of devices do fleet operators prefer for accessing telematic services? e.g. in-vehicle device, GPS-capable cellular phone, two-way pager
• What percentage of fleet operators interviewed expect to purchase location devices in the next 12-18 months? Do they favor vehicle-installed devices or GPS-capable cellular phones?
• What percentage of fleet operators are willing to pay for a vehicle location system? How much will they pay? Which fleet segments are most interested?
• How much are fleet operators willing to pay, on a monthly basis, for a vehicle location service? Will some fleet categories pay more than others?
• Which categories of fleet operators are interested in routing assistance or traffic alerts for their drivers and how would they prefer to have drivers access these services?
• Are delivery fleets interested in capabilities such as bar code scanning and signature capture?
• From what type of company would fleet operators expect to purchase telematic systems and services? e.g. from a cellular carrier, two-way radio dealer, paging company, specific application service provider
• What do fleet operators consider an acceptable payback period for achieving a full return on investment in a system that would give them access to the services covered in the study?
• How does interest of fleet operators in telematic services compare to consumer interest? Are fleet operators willing to pay more than consumers for access to comparable services?
  

Services Covered in the Study

Nationwide Telephone Survey

The nationwide telephone survey, conducted in July and August 2003, included interviews of approximately 22-minutes duration with 400 fleet operators. Those interviewed have responsibility for selecting mobile communications systems for their fleet vehicles. Survey participants included representatives from all major U.S. regions. Long haul truckload carriers were not included in the survey, as this market is more
mature than the local or private fleet markets and the needs of truckload carriers for telematic services are better understood.

As shown in Chart 1, two-thirds (66%) of the fleet operators participating in the study reported using cellular phones and over half (52%) use two-way radios. In addition, 18% of the sample reported that their drivers use pagers for communication. The study identifies specific wireless service providers used by participating fleets and compares interest in telematic services among fleets based on their use of wireless communication systems.

Participating fleet operators rated their interest in each service. Those who expressed some interest in a service were asked if they would pay a monthly fee for the service and how much they would be willing to pay. Chart 2 shows participants’ interest and willingness to pay for three of the 15 services covered in the study. As indicated in the chart, about 30% of the respondents expressed some interest (2 - 5 rating on a 5-point scale) in a Data Messaging service that would enable fleet drivers to use a portable or installed device to send and receive status or text messages. Over half of these respondents (17% of the total sample) stated that they would pay a monthly fee for Data Messaging and the median amount they would pay is $20. While a higher percentage of fleet operators (39%) expressed some interest in an Emergency Notification service that would enable drivers to push a button in the vehicle to request emergency assistance, they would pay less on average (median $10/mo.) for access to this service than for Data Messaging. Nearly one-third of the sample expressed some interest in a Stolen Vehicle Tracking service that would monitor the location of a stolen vehicle until it is recovered by police, and those willing to subscribe to this service would pay an average (median) monthly fee of $10 per vehicle.

All survey participants, except those who currently use a vehicle location system, were asked if they expect to purchase an installed vehicle tracking system or GPS-capable cellular phones in the next 12-18 months. As shown in Chart 3, nearly one-third of the surveyed fleet operators (31%) reported that they expect to purchase location devices within the next 18 months. Nearly two-thirds of these respondents expect to purchase GPS-capable cellular phones. The report compares interest in installed AVL systems and GPS-capable phones among small and large fleet operators, operators of different classes of vehicles (i.e. Class 1-8) and among different types of fleets, such as service, delivery, transportation and government fleets.

Detailed Report

The 82-page report of the research findings includes the following sections:

Overview of the study, including objectives and methodology
Executive summary of the key findings
Conclusions of the research
Detailed report on the findings of the nationwide survey
Summary of interest by major fleet categories

Subscribers may purchase a complete package of the survey findings, including the detailed report (paper and electronic copies), three sets of data tables (over 300 pages) and an Excel spreadsheet listing the names and locations of participating fleets, SIC codes and individual responses to each question. Alternatively, the detailed report may be purchased separately.

Optionally, subscribers to this study may schedule an Executive Presentation of the findings, given by the author of the study.

C.J. Driscoll & Associates, founded in 1993, provides marketing consulting services and conducts industry studies in fleet vehicle location and navigation, consumer telematics and other location-based applications. Consulting services include business plan development, strategic planning, due diligence assessments, market studies, public relations support and competitive assessments. Clients include wireless carriers, automotive companies, electronics manufacturers, software companies and other technology providers.

In February 2003, C.J. Driscoll & Associates released the U.S. Fleet AVL Market Study which assesses the size of the potential U.S. market for vehicle location, current AVL penetration levels in each major market segment and prospects for growth. Detailed information is provided on over 80 U.S. and Canadian suppliers of fleet vehicle location systems and services, including current installed base and system pricing. Affiliated Driscoll-Wolfe Marketing & Research Consulting is conducting its 6th multi-client study on U.S. consumer interest and willingness to pay for location-based services and telematics, scheduled for release in December 2003.