"What's the value proposition of telematics? Clearly traffic is top of the list," said Roger Lanctot, associate director, global automotive practice, at market researchers Strategy Analytics.
Lanctot, speaking at a Telematics Update conference here, said surveys show that telematics applications aren't high on the list of priorities for most car buyers. But traffic information is considered key as congestion in major urban areas continues to increase.
"Navigation is at the core of delivering a connectivity solution with daily relevance for which consumers are willing to pay," Lanctot said.
The analyst also said privacy concerns are increasing, as telematics functions depend on service providers knowing where cars are at all times.
"This issue hasn't been clearly resolved by the industry," Lanctot said. "We need a sufficient value proposition so the customer is willing to exchange privacy for the services he gets."
Lanctot was speaking at a Telematics Update conference whose title was "Content & Apps for Automotive Europe 2012."