Automotive > Infotainment & Telematics Blog

Hughes Opening New Doors in Telematics

by Roger Lanctot | 4月 03, 2011

The measure of a creative and powerful marketing organization is often best taken when the chips are down. For Hughes Telematics that measure might have been taken two years ago when Chrysler and Hughes agreed to part company with Chrysler in the throes of a Chapter 11 filing.


The loss of Chrysler meant that Mercedes-Benz (Mbrace) might be left as Hughes’s lone OEM customer in North America. The loss of Chrysler also looked like the final straw that might bring down Hughes’ once-grand vision of a cross-OEM hybrid telematics system integrating cellular and satellite connectivity. That vision included a hardware module, call centers, service partners and an integrated three-screen solution enabling Web and smartphone access to vehicle information along with remote control.


Today, all of those pieces – except the satellite connectivity – are still in play, but Hughes has repositioned itself to address a wider scope of potential verticals (including healthcare and insurance) while still addressing automotive OEM and aftermarket opportunities.  Hughes is approaching the market with a less grandiose and more flexible offering – in-Drive.  


in-Drive to the Rescue


In-Drive allows Hughes to pursue fleet, insurance or aftermarket vehicle tracking and recovery solutions as a white label provider of software systems capable of supporting wired or wireless modules or even smartphone-based solutions.  The introduction of in-Drive, heralded at the 2010 CES show and even more advanced at the 2011 show in January, showed Hughes bouncing back with a new vision.  


Paramount to that new vision is an emphasis on the insurance side of telematics.  Thanks to intellectual property acquired from NetworkCar, Hughes has the most flexible and extendable platform available in the insurance telematics market.  Also thanks, in part, to that technology positioning, the company is engaged with unidentified insurers to bring a next-gen telematics solution to the market.  (Hughes declines to identify any potential partners or the nature of any systems that may be in development.)


The importance of the insurance telematics angle ought not to be underestimated by car makers.  Progressive’s launch of its Snapshot usage-based insurance product ( - Usage-Based Insurance Brings New Competitors to Telematics Market) has the potential to fundamentally change the relationship between insurance companies and their customers.


Progressive’s Snapshot product tracks vehicle miles driven, amount of time driven and time of day and calculates speed, though it does not correlate speed to posted speed limits.  The online reporting tool shows these figures along with a calculation of the number of “hard braking” incidents. 


The Snapshot reporting tool also displays a graph characterizing the driving behavior as to whether the driver is maximizing MPG correlated to the time of day of that driving activity.  In this way Progressive is opening the door to a new relationship with the customer.  To Hughes’ credit, the company described its own solutions around eco-routing and eco-driving three or more years ago.


Hughes Enabling Next-Gen UBI Solutions


Hughes’ insurance offering, like Snapshot, might be an OBDII plug in, or it can be implemented in a variety of ways including wireless connectivity.  Hughes is not wed to a particular platform and is capable of deploying its solution on any platform.  More important is the back-end analytical tools Hughes brings to the proposition allowing for everything from traditional safety and security to vehicle diagnostics, emissions, concierge services or family monitoring.


The system/service bundles offered by Hughes via in-Drive ( include:


Automotive Data Services


Family Co-Pilot


Hughes’ newfound flexibility means the company is free to pursue opportunities in the fleet market as well as in the consumer market.  In fact, thanks to its wireless patents, Hughes could launch its own OnStar-like aftermarket telematics mirror with CAN connectivity for capturing vehicle data if it so chose.  In other words, Hughes could out-OnStar OnStar.


Working through insurance partners, Hughes is in position to help its partners redefine that customer relationship.  An insurance telematics device is perfectly capable of providing vehicle tracking and recovery – like LoJack – roadside assistance, navigation and POI assistance, or any of a variety of concierge and vehicle diagnostics capabilities.


The vehicle diagnostics capabilities offered by Hughes include vehicle emissions monitoring for inspection purposes as well as the checking of error codes.  In the event of a breakdown, a Hughes-based insurance telematics solution could provide names of nearby approved service or repair providers.


The same kind of functionality is true for emergency circumstances.  A Hughes module, provided by an insurance company and equipped with appropriate sensors and CAN connectivity, could alert emergency responders – again, in an OnStar-like fashion.


To paint an even rosier picture of Hughes’ renaissance, prospects are good for the signing of a second OEM telematics relationship later in 2011.  Between its improving OEM outlook and robust aftermarket prospects, Hughes is tracing an improving trajectory.




Hughes Telematics’ emergence in the insurance market changes the prospects for this application segment.  Until now, insurance telematics solutions did not stray far from the basic collection and analysis of driving time and time of day – with some exceptions ( - #Allianz Changing the #PAYD #Insurance Game - blog).  The range of solutions available from Hughes for collecting and analyzing vehicle information opens the automotive market to new opportunities for insurers.


The fleet industry is already looking at behavior modification-type solutions tied to vehicle tracking.  ( - Behavior Modification Comes to Fleet Telematics from the Cloud)  Progressive has already taken the step of integrating ecological driving elements in its UBI solution.  A wide range of possibilities are available to auto insurers, but there are obstacles.


Devices, like Progressive’s, that connect with the vehicle CAN bus via the OBDII port are problematic.  Some cars are known to respond unpredictably to such plug ins and gleaning the necessary data can be a challenge.  The value proposition difference between such a device and one that is not connected to the vehicle is significant.  


It is still early days for UBI-based underwriting.  But Hughes participation in this market has the potential to change the market significantly.


Progressive Update:


This analyst is currently participating in a trial of Progressive’s Snapshot UBI service.  Progressive said it could not provide an OBDII Snapshot plug in for my 2009 BMW 5 Series, but it could provide one for my 2004 Toyota Sienna.  The initial reporting appears below:






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