U.S. CAR TELEMATICS DEVICES MARKET EXPLODES AFTER YEARS OF STAGNATION

Venture Development: US. estimates that telematics and communication devices will continue to grow explosively through 2007 and beyond. Telematics devices - a term that describes location-based communication and information applications (i.e., information is customized to where you are and what your car is doing, providing enhanced security, safety, navigation and convenience to the mobile user) - are expanding at a compound annual growth rate (CAGR) of 13.7% and will reach over $1.2 billion by 2007.

The growth in telematics is being driven by the following trends:

• Affordable hardware. Increased volume and subsidies from OEMs has led to a decline in hardware costs, making telematics more affordable for consumers and OEMs.

• Increased demand. The North American market was initially slow to adopt navigation and other telematics related technology. However, the OEM penetration rate is fostering awareness and as a corollary, demand.

• Technology trends. Embedded technology applications pervade the modern automobile. These applications and functions work through a network, which uses telematics as the platform to bring various technologies together.

• Information Services - Traffic conditions, weather alerts, news flashes, etc.

• Safety Monitoring - Collision notification, airbag/ restraint system deployment, other vehicle condition/ status, and eventually passenger status

• Vehicle Diagnostics - Virtually all electronically monitored or controlled subsystems can be enhanced with telematics-enabled remote monitoring and control

• Communications - Multiple configurations of hands-free communication – addressing the dual need to support increasing driver calls, but with greater safety

• Entertainment - Music and video downloads, audio and video streaming

U.S. CAR TELEMATICS DEVICES MARKET Publ 20060308