6 predictions for the connected car market
As more and more wirelessly connected cars hit the market, a number of trends are becoming evident. RCR Wireless News will spend this month examining the connected car market, including these six predictions:
The connected car market will be big, broad and global. Connected cars are already driving the machine-to-machine space, Infonetics has concluded. Gartner predicts there will be a quarter-billion connected vehicles on the road by 2020, with new vehicles dramatically increasing the proportions of connected cars. In particular, regulations requiring emergency connectivity, or eCall, for new vehicles in Europe, are helping to drive the ecosystem. Gartner said “the proliferation of vehicle connectivity will have implications across the major functional areas of telematics, automated driving, infotainment and mobility services.”
Multiple radio access technologies will be in play. From 2G and 3G for light, telematics-based connectivity to LTE and Wi-Fi for heavy infotainment use, automakers seek to integrate a wide range of wireless technologies in their vehicles. Infonetics has found that although LTE connectivity is expected to grow the fastest, there will be use cases for 2G and 3G as well as demand for access to multiple generations of wireless technologies.
Services and analytics for the connected car will be a huge factor in the revenue it generates. More on that from Infonetics, which predicts that “revenue derived by service providers for the connectivity and other basic value-added services they provide to the automotive, transport, and logistics (a.k.a. connected car) segment to more than triple from 2013 to 2018, to $16.9 billion worldwide.” The research firm also noted that “the connected car services market is growing at a 2013–2018 compound annual growth rate (CAGR) of 25%, nearly 21 times the growth rate expected for traditional mobile voice and data services during the same time period.”
Embedded connectivity options will dominate the connected car market. Other options include relying on smartphone integration or after-market devices for connectivity, but embedded solutions are expected to eventually dominate the market. Indeed, a recent commercial for the Chevrolet Cruze shows would-be buyers having their cellphones shredded (to their dismay), before the phones reappear unharmed – but the vehicle is offered as an acceptable and even more powerful alternative. “What’s more important, the phone or the connection?” says one character. “So this thing puts out its own signal?” an observer asks.[embedyt]http://www.youtube.com/watch?v=ro0UEwuOR1Q[/embedyt]
The connected car begins as a luxury/high-end play, but is already moving to the midmarket. High-end carmakers are eager to offer connected car features, such as Porsche’s Car Connect, as well as players including Tesla and BMW. But as that Cruze commercial demonstrates, wireless connectivity is broadening to different price points.
“The connected car is already a reality, and in-vehicle wireless connectivity is rapidly expanding from luxury models and premium brands, to high-volume midmarket models,” said James F. Hines, research director at Gartner, in a statement.
Capable is not the same as connected. BI Intelligence noted that although it expects healthy numbers for connected capability – 75% of vehicles will be capable of Internet connectivity by 2020, or around 220 million – only about 88 million of those cars will actually be activated end points, as some car owners opt out.
Join RCR on Oct. 28 for a webinar on the consumer drivers for, and the technical challenges of, the connected car. A special report on the topic will be published the same day.
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