Communication Service Providers looking to accelerate their revenues in the coming years have a rapidly growing segment within the data network that they can tap into. The 'Connected Car' offers huge growth opportunities in markets where car ownerships are high, where cities and town are distributed far apart and where there is adequate data network coverage, be it 2G, 3G or 4G. According to the recent report by Infonetics, a leading market research firm, the Connected Cars services market is expected to grow at a CAGR of 25% in the next five year, almost 21 times the growth expected for traditional mobile voice and data services. It is expected to rake in revenues of more than $16.9 in 2018, growing 3 times the revenue it generated in 2013.
Infonetics' report, the Connected Car M2M Connections and Services, also highlighted the following key points:
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There are increasing number of partnerships being formed between car makers and service providers, with auto brands such as GM, BMW and Tesla making huge investments in their connected car programs
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Service Providers are seeing as much as 90% of their machine-to-machine (M2M) revenue generated from the connected car segment
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North America leads the global connected car business, accounting for 37% of global service revenue in 2013; Europe and Asia will be fast-growing regions
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With sizeable auto markets and large land areas, countries like the U.S. and China are ideal for connected vehicle services
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The Revenues from the Connected Car will be from the connectivity and other basic value-added services they provide to the automotive, transport, and logistics
Apart from the details on the above, the report also covers business models and trends driving the connected M2M market.
"Unlike the smart grid vertical, which favors 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. 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.”
- Godfrey Chua, Analyst for M2M and The Internet of Things, Infonetics Research
