Buy into the wireless machine revolution

Telematics is a rapidly-growing, €700bn industry which has enough government and commercial support to enable it to go mass-market. Eoin Gleeson examines the technology and picks the best stock in the sector.

When a CategoryThree hurricane is heading for your home, you could be forgiven for panicking. But as towns along the Gulf of Mexico were evacuated last month ahead of Hurricane Gustav, some cars and jeeps simply peeled calmly out of their drives, then fanned out in every direction as if guided out of town by some invisible hand. In fact they were. As they cruised out of their neighbourhoods, owners of General Motors-manufactured vehicles switched on new computers they'd had installed and were immediately hooked up to a local command centre. There, advisers waited with computerised maps and advice for the best back-road route out of town. By the time drivers had made it out of New Orleans and Louisiana, the computer had told them where to get the best gas prices, where to stay in the next State and even what progress their loved ones had made out of town.

This technology is called 'telematics', or machine-to-machine (M2M) technology. It's a €700bn industry, which is growing at 14% a year. Telematics is about sending and receiving information to cars or machines over mobile networks. The GM cars allowed drivers to call the command centre for directions. But if they'd crashed, the computer would also have notified the emergency services feeding ambulances information en route about the scale of the impact and any important medical details they'd need to know about the passengers. And if the car had been hijacked, the culprits wouldn't have got far, as the police would be tracking them.

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Eoin came to MoneyWeek in 2006 having graduated with a MLitt in economics from Trinity College, Dublin. He taught economic history for two years at Trinity, while researching a thesis on how herd behaviour destroys financial markets.