Study On The Business Model Of Ow-End Telematics Business

Telematics which covers machinery, electronics, communications, IT, media, finance, medical treatment, administration and other industries is one of the fastest-growing areas which also attract most attention. It is widely believed that Telematics industry will be the star of the industry in the next few years. Since2009, the first year of China’s Telematics, it has enjoyed rapid development. However, due to the influence of numerous factors, the Telematics service in China is limited to specific high-end cars by now, the huge low-end market demand has not yet be effectively met.Firstly, this paper reviews the development status of Telematics and looks to the future development trend. This part starts by PEST analysis of automobile industry, and focuses on the analysis of the trend of user needs transferring from a simple need of product to service, as well as presents China’s Telematics application, market features and future market potential.Secondly, this paper probes into the prospective of future innovative applications and services, combining with information technology innovation and development trend.Finally, business model of China’s low-end Telematics is discussed through the analysis of the "i-telematics" business model. Based on the Porter five forces competitive model analysis, five major advantages of the low-end Telematics market in China are summed up:the numerous users, low charge standards, user-friendly operation, economic in operating funds, convenient channel of marketing. Through the value chain analysis of Telematics industry, three problems of low-end Telematics business model in China needed to be solved are concluded as follow:make clear the profit source, attract enough subscribers, and resolve user payment. Pros and cons of the free model of Telematics application in the low-end business areas are discussed in the final part.