Connected car services to bring in $40 billion in annual revenue by 2020
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A report from SNS Research estimates that connected car services will bring in nearly $40 billion (£27.3bn) in annual revenue by 2020, including infotainment, navigation and fleet management among others.
The connected car segment is the fastest growing vertical in the Internet of Things (IoT) market due to the growth in use of embedded in-vehicle connectivity and smartphone integration platforms, the researchers argue. All major automotive OEMs are investing in connected car programs in order to generate recurring post-sale service revenue streams.
Other ecosystem players, such as mobile operators and telematics specialists, are also looking to make the best of this opportunity. Consolidation is underway in the connected car market as larger players undertake acquisitions to increase their market share, capability, revenue and geographic reach, the report explains. Several mobile operators are also offering end-to-end connected car platforms directly to automotive OEMs and aftermarket suppliers.
The ratio of connected car service revenue for driver assistance systems and autonomous driving applications is slated to see a sharp rise from merely 5% in 2014 to over 11% by 2020. Big data and analytics technology investments in the automotive sector, largely on account of connected car services, are slated to see CAGR of over 14% in the period 2015–2020 and reach $5 billion by 2020.
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