In-car telematics installations are expected to become very popular as drivers start to appreciate the advantages of GPS and cellular communication, according to analysts.

ABI Research predicted that OEM and aftermarket consumer telematics hardware and services will generate annual revenues of $41bn by 2013.

Dominique Bonte, principal analyst at ABI, highlighted three main factors which will drive the growth of consumer telematics.

Car manufacturers will deploy telematics hardware as a standard feature to enable remote diagnostics which reduces maintenance and repair costs.

Governments will make telematics safety systems such as emergency calling mandatory in new cars in regions such as the EU.

Insurance companies will provide premium discounts to drivers willing to install telematics systems to monitor driving behaviour and for stolen vehicle tracking and recovery.

ABI Research said that an important evolution is the emergence of affordable portable and converged telematics offerings.

These entry-level products will play an important role in increasing consumer awareness of the benefits of telematics, which in turn will drive the adoption of OEM systems.

However, Bonte warned that several barriers will need to be removed before consumer telematics can enjoy mass market adoption.

Data communications costs charged by cellular carriers need to come down, and standardisation efforts will have to be accelerated in order to reduce fragmentation and hardware costs, and to allow end-to-end service offerings.

Services and user interfaces will also have to be simplified dramatically in order to guarantee an intuitive user experience.