Over 3 million of today's smartphone users use telematics apps -- apps ranging from navigational services like Waze to streaming music players like the now-ubiquitous Pandora. That figure is expected to rise dramatically over the next five years; in fact, ABI Research estimates that by 2016, it will hit 129 million. So, what does that mean for automakers and their own telematics systems?

We've written a good bit about the in-dash offerings from car companies like Ford, General Motors, Toyota, and Hyundai. Ford seems to be leading the telematics pack with MyFord Touch, which has become increasingly app-centric, but GM recently made an interesting play by making its very popular OnStar available for non-GM vehicles. Many companies -- domestic and foreign -- also offer phone apps that connect users to their cars, allowing them to monitor fuel levels, unlock doors, and keep tabs on maintenance issues.

We've also written about aftermarket devices from companies like Garmin and TomTom. Squeezed by the tech offerings from automakers and app-builders, they've been working overtime to stay relevant.

But the real question is: can automakers and aftermarket companies overcome the allure and capabilities of the smartphone?

Our guess is no.

It seems obvious that the public wants mobility and simplicity. A significant number of adults -- particularly the younger ones -- have ditched landlines in favor of cell phones. The trend toward highly portable laptops and tablet devices has been remarkable. Cloud computing has become popular, not just with telecommuters, but with moms and grandmas who want the ability to carry their stuff with them wherever they go. And in recent months, we've seen many products like the Motorola Atrix 4G and Oxygen Audio's iPhone-centric O'Car stereo that point to a world full of "dumb boxes" -- terminals that rely on smartphones for their "brains".

As the capacity of smartphones increases, with faster processors and larger hard drives, consumers will rely on them more heavily. They'll become more of what they already are: portable do-it-alls that allow us to interface with other devices, from car stereos to credit card swipes.

What does that mean for everyone else? The TomToms of the world will likely (a) change direction entirely, (b) fold, or (c) be bought by car companies in need of tech resources. Automakers themselves might be able to keep drivers hooked with proprietary systems and technology, but that seems like a short-term strategy: if the internet has taught us nothing else, it's taught us that "proprietary" is often a losing game. We don't have to look much further than Android's slow trouncing of the iPhone to see that played out today. 

If you'd like to read ABI's press release, we've pasted it below. And if you have some strong counter-arguments -- or even weak ones -- we'd love to hear 'em.

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Suppliers Rushing to Launch Smartphone Telematics Applications for Vehicles, Says ABI Research

LONDON--(BUSINESS WIRE)--The number of global users of telematics smartphone applications will increase from 3.2 million in 2011 to 129 million in 2016, with North America as the dominant region, according to the latest ABI Research forecasts.

Practice director Dominique Bonte comments: “The integration of smartphones and smartphone applications into vehicles represents nothing less than a renaissance of the interest in both consumer and commercial telematics markets. Car OEMs, automotive Tier Ones, telematics service providers and independent system and software developers are rushing to launch smartphone applications, with new solutions being announced almost on a daily basis. The dynamics of the smartphone and application store revolution are now spilling over into the automotive industry.”

Telematics smartphone applications appear across many categories including infotainment (music streaming), remote control (door unlock), remote diagnostics (battery status), eCall & bCall, virtual dashboards, driver behavior monitoring, advanced navigation, and even social media applications (Facebook and Twitter updates). They take the form of both standalone apps connected to the vehicle OBD-II bus, and apps operating in conjunction with embedded telematics and infotainment systems.

However, issues remain. The most important one is safety: the in-car use of smartphone apps increases drivers’ distraction. While Apple’s iPod Out and Nokia’s Terminal Mode allow users to control and display phone apps using in-car controls and displays, the end-to-end control over HMI design is relinquished by car OEMs to third party developers. Some OEMs are considering launching their own application stores and/or certification processes.

Finally, telematics smartphone applications constitute something of a double-edged sword for car OEMs, allowing them to bring cheap connectivity and innovative features to the market quickly but at the same time forcing them to hand over lucrative business opportunities to the mobile industry, as well as compromising on quality and safety.

ABI Research’s new “Telematics Smartphone Applications” (http://www.abiresearch.com/research/1006434) study covers the different types of telematics smartphone application (standalone, hybrid, embedded), drivers and barriers, main players and solutions, as well as user interface and safety issues. It includes detailed subscriber and revenue forecasts. It is part of the Telematics Research Service(http://www.abiresearch.com/product/service/Telematics_Research_Service), which also includes other Research Reports, Research Briefs, Market Data, ABI Insights, ABI Vendor Matrices, and analyst inquiry support.

ABI Research provides in-depth analysis and quantitative forecasting of trends in global connectivity and other emerging technologies. From offices in North America, Europe and Asia, ABI Research’s worldwide team of experts advises thousands of decision makers through 29 research and advisory services. Est. 1990. For more information visit www.abiresearch.com, or call +1.516.624.2500.