Connected car service providers to reap US$17 billion in 2018 as GM, BMW and Tesla ramp up smart apps

Campbell, California, USA – Market research firm Infonetics Research has released excerpts from its new Connected Car M2M Connections and Services Market Size and Forecasts Report, which focuses on the telecom-related services available for automotive applications, fleet management, and telematics, as well as the business models and trends that are driving the connected car M2M market.

 

“Unlike the smart grid vertical, which favours 2G technology to keep usage cheap, or connected cameras, which require at least 3G and ideally 4G technology for good quality, the connected car vertical is able to make use of every generation of cellular technology available. This means that just about any communications service provider, whether they have 2G, 3G, 4G, LTE or a combination of technologies, can find a niche in the connected car space,” says Godfrey Chua, directing analyst for M2M and the Internet of Things (IoT) at Infonetics Research.

 

Chua adds: “Next-gen 3G and 4G technologies are paving the way for improved interactivity, video, real-time analytics, and other smart apps in the connected car space—and thus a greater probability for service adoption. LTE will be the fastest-growing cellular technology in cars, expanding 135% annually between 2014 and 2018. A major boon will come from AT&T’s agreement with GM to deploy LTE for the OnStar service.”

 

The Connected Car Report’s highlights include:

 

• Infonetics expects revenue derived by service providers for the connectivity and other basic value-added services they provide to the automotive, transport, and logistics (connected car) segment to more than triple from 2013 to 2018, to US$16.9 billion worldwide.

• In an effort to differentiate their vehicles, major auto manufacturers including GM, BMW, and Tesla are making significant investments in connected car programmes; the result is growing partnerships between leading M2M service providers like AT&T and China Mobile and automotive brands.

• Some service providers are seeing as much as 90% of their machine-to-machine revenue generated from the connected car segment.

• North America is the foundation of the global connected car business, accounting for 37% of global service revenue in 2013; Europe and Asia will be fast-growing regions. With sizeable auto markets and large land areas, countries like the U.S. and China are ideal for connected vehicle services.

• 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.

 

 

 

 

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