As the "digital life" concept expands from the home into automobiles, Taiwan can leverage its strength in mobile information technology (IT) products and low-cost manufacturing to tap into the fast growing sector, an industry watcher said yesterday.
"We have seen growing demand worldwide in the car telematics market," Hou Chun-yian (
Telematics means telecommunication plus informatics, referring to global positioning and wireless systems installed in vehicles to provide drivers with a variety of information and services, such as maps or voice navigation, and real-time information services.
The global auto telematics sector is expected to grow by a compound annual growth rate of 27 percent to US$35 billion in 2010 from US$4.1 billion in 2001, according to ITRI's figures.
72 percent growth
The Asia-Pacific and European regions are two fast-growing car telematics markets, recording 72 percent and 47 percent growth last year, from a penetration rate of 2.7 percent and 6.6 percent in 2003, respectively, ITRI said.
Since most car telematics systems remain expensive -- costing US$1,000 to US$2,000 -- Taiwanese companies can take advantage of competitiveness in IT products and low-cost manufacturing to make inroads into the low-end, retail car telematics market, Hou said.
Personal-digital assistants (PDAs) equipped with global positioning systems (GPS) and wireless communication functions, as well as smart phones with price tags under US$500 could meet consumer demand in the low-end segment, he added.
As a pioneer in the sector, Mitac International Corp's (神達電腦) GPS PDA products, which have been well-received in the European and some Asian markets, have made the company the fourth largest PDA maker, Hou said.
Mitac's own-brand and contract manufactured PDA products combined to account for around 15 percent of the global market, and the company is expected to ship 2.2 million units this year, up from some 1 million units last year, a Chinese-language report said earlier this month.
In addition to the consumer market, the key components of telematics systems, including GPS modules and small-to-medium display panels, also provide good opportunities for Taiwanese upstream suppliers, Hou said.
PC firms move in
A number of personal computer (PC) manufacturers, in a bid to diversify product line-ups amid deteriorating gross margins, are also moving to break into the automobile electronics sector, which encompasses electronic controls in engines, chassis and body, among other areas.
The segment's market value is expected to grow to US$20 billion this year from US$15 billion last year.
The world's No. 1 notebook assembler, Quanta Computer Inc (廣達電腦), is slated to set up an automobile electronics unit next month to enter the market, company president Michael Wang (王震華) said earlier this month.
The firm made the decision following Hon Hai Precision Industry Co (