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The Car and Truck Fleet and Leasing Management Magazine

Study Says Need for Traffic Data to Create $7-Billion Market

July 26, 2001

The need of government agencies, consumers, fleet operators, and other enterprises for fast, accurate, real-time traffic data, as well as the demands of individual telematics end-users for personalized, high-level traffic information will create a $7 billion traffic information market dominated by a few major players, according to a study UBS Warburg, a global financial services firm. But the approach to gathering and disseminating traffic data in the future will be significantly different from the present, where news media play the dominant role with its use of traffic information for spot news broadcasts, according to UBS Warburg. “We believe that other market segments, particularly enterprise (fleet companies, high-level telematics end-users) and mass market telematics (navigation systems and other devices), will soon surpass news media in terms of revenues for traffic providers,” says Saul Rubin of UBS Warburg. UBS Warburg analyzed the prospects of 11 companies serving the traffic data market in compiling the report. Its initial conclusions include: -- In the near term, Westwood One will maintain its dominant position in the market and mobility technologies will emerge as its only significant competitor in the “end-aggregator” role. -- Both CUE and US Wireless Corp. will be important players, CUE almost immediately and US Wireless within a few years. -- Other companies such as TrafficCast and TrafficStation may find little niches within the market. -- Because of its experience, TrafficMaster “is worth keeping an eye on” and ClearChannel, an important player today, is expected to remain so in the future. The UBS Warburg researchers noted that the telematics market “has developed a bit more slowly than we had forecast” in last year’s industry-spanning report, Worldwide Telematics Market: Eyes on the Road, Hands on the Wheel. “This lag has been marked both by dawdling of the important players in the market and slow consumer demand,” they observed. “It is likely that consumer demand will not really take off until a ‘killer app’ emerges. Real-time personalized traffic data could potentially fill this role.” The traffic information market falls into four basic segments: media, both radio and television; enterprise, such as fleet companies and other logistics users; telematics, primarily onboard navigation systems, personal digital assistants (PDAs), and cell phones; and government services, which use the data for traffic management efficiency evaluation. The study does not focus on telematics aggregators like OnStar that only disseminate traffic information, since traffic information is just one service among many that telematics aggregators provide. UBS Warburg will focus more on these service aggregators in its next report.
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