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Worst case scenario

John Day

John Day

Posted Jun 19, 2010

If you weren’t watching as closely as Roger Lanctot was, you may have missed the significance of a recent announcement from telematics systems vendor ATX Group.

ATX provided TeleAid services to Mercedes-Benz customers until last fall, when Mercedes switched to Hughes Telematics and launched mbrace. Mercedes wants customers to switch from TeleAid to mbrace, but ATX recently launched a downloadable smartphone application called iRoute that it hopes will maintain and extend its relationship with Mercedes customers who use TeleAid (ATX Connected Vehicle Service). ATX’s free app provides customers who choose to continue as ATX subscribers many of the functions that are available in mbrace.

By tapping on the iRoute icon on their iPhone, drivers can link to ATX to perform point of interest searches, remotely unlock the doors of their vehicle, or to call for roadside assistance.

Lanctot, a director at the research firm Strategy Analytics, notes that mbrace was the first app from an automaker to enable remote functions from a handset, and the ATX app is the first instance of a service provider competing with an automaker for the automaker’s customers.

“The introduction of the ATX downloadable app is perhaps the worst case scenario for an OEM given the existing relationship with Mercedes TeleAid subscribers,” Lanctot writes. “OEMs are being forced into the business of certifying applications for use in the car at the risk of losing control of both the customer and the user experience. Nearly every OEM is scrambling to demonstrate or introduce an app store strategy of some kind following the perceived success of Ford’s Sync model. But no one is pondering the potential for an application to commandeer an OEM’s marketing, sales and telematics strategy as well as the user experience in the vehicle.”

Mercedes plans to introduce new applications soon, but Lanctot asks, “If ATX can divert Mercedes’ TeleAid customers, which OEM will be the next to see an app divert their customers?”

TeleAid, Strategy Analytics, Hughes Telematics, ATX Group, Mercedes-Benz, Roger Lanctot, iRoute, mbrace

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John DayJohn Day recently launched John Day’s Automotive Electronics News ( to provide news and feature coverage of the automotive electronics industry. Earlier he wrote for Auto Electronics magazine, Auto E-lectronics, EE Times, and other business and engineering publications. Visit John Day

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