Electronics and the Gartner Hype Cycle - Opinion & Analysis Electronics - vehicle telematics - Brief Article

Automotive Industries,  August, 2002  by Paul Hansen

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I was talking recently with Jim Geschke, in charge of electronics for Johnson Controls Inc., about Bluetooth and telematics aboard the vehicle and how some carmakers and suppliers have become disillusioned with the technologies' business prospects. He explained that while some companies are disappointed now, they eventually will recover and get back to work on appealing products at the right price for consumers. To illustrate his point, Jim referred me to the Hype Cycle, an analytical tool invented by Gartner Inc., a global research and consulting firm that tracks market trends and technology. Gartner uses the Hype Cycle to explain the scenario that often occurs alter a new technology first explodes into public awareness.

Gartner's Jackie Fenn, who coined the term Hype Cycle, began publishing Hype Cycle graphs in 1995 to help present Gartner's view on the prospects for emerging technologies. Fenn, and others at Gartner, recognized that news about a new technology often starts with a flurry of stories that wildly exaggerate how quickly markets based on the technology will emerge. Eventually, after many companies enter the market and fail to come up with winning new products, the press jumps on the disappointments. This triggers a steep fall from the "Peak of Inflated Expectations" into a "Trough of Disillusionment."

While some technologies get stuck in the Trough for a long time, others emerge in a few years--after much hard work to bring the technology closer to market realities--and eventually, commercially viable products can be offered. Fenn told us that the con cept is not at all scientific, but "the Hype Cycle is a good snapshot of where technologies are at a certain point in time," she added.

I applied the Gartner Hype Cycle to a few emerging automotive electronics technologies; the graph shows where in the cycle I believe they fit.

OnStar

With more than two million subscribers, OnStar is the largest telematics business in the world. It has made huge investments but is still losing money, a condition that could continue, as GM tries to convert free subscribers into paying subscribers. Unless it shows a profit soon, OnStar business models and the technologies on which they are based will languish in the Trough of Disillusionment. OnStar hardware doesn't yet exploit the Internet or personal computers embedded in the vehicle.

Advanced Telematics

Telematics that takes full advantage of the Internet and computing will eventually find its way into standard factory-installed applications, once developers find realistic business models for inexpensive and appealing products. High costs and the lack of killer applications will block the emergence of advanced telematics for at least the next five to seven years.

Automotive Bluetooth

There were many positive stories and speeches back in 1998 and 1999 about Bluetooth wireless connectivity and its applications in vehicles, but the initial hype hasn't yet led to high-volume applications. Among the obstacles is the limited availability of affordable Bluetooth-enabled mobile phones. Another is the lack of standards. To be sure that Bluetooth transmissions don't interfere with other systems on the vehicle or with nearby vehicles, the auto industry must agree on automotive-specific standards. While according to Gartner, non-automotive Bluetooth is finally emerging out of the Trough of Disillusionment, it will take several more years to make Bluetooth ready for the auto industry.

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PAUL HANSEN is a strategy and market research consultant in Rye, N.H. He publishes The Hansen Report on Automotive Electronics, a business and technology newsletter. [www.hansenreport.com]

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