Connected cars to save telecom industry?

Telecom Lead Asia: Mobile industry reports suggest that connected cars are set to save the telecom industry.

The global connected car market shipments are expected to reach 59.86 million units and likely to reach $98.42 billion by 2018.

Global Information Inc (GII) says the market presents direct revenue channel from applications, services, and content, and experts believe that software and apps will become a major revenue generator.

In a March 20, 2013 report, Juniper Research said that advancements in entertainment head-units and higher smartphone penetration will result in App-capability reaching a fifth of all consumer vehicles in the developed markets of North America and Western Europe by 2017.

The success of new standards such as MirrorLink will be instrumental in creating the foundations for the connected car ecosystem to flourish.

“Sky-high smartphone ownership and a standardised approach to integrating apps into the vehicle head-unit mean that the barriers to making the connected car a reality have all but gone,” said Juniper Research’s Anthony Cox.

Software can help keep older cars competitive and up-to-date for years past release, essentially tied to the regular maintenance of the vehicle, according to GII.

In a webinar in April 2013, IDC will discuss that there are as many potential participants and stakeholders, each vying for standing in this rapidly evolving market. However, vague business models, disconnects between the participants in this ecosystem, government involvement, and, above all poor understanding of consumers needs, lead to slow adoption.

IDC says innovation in in-vehicle electronics and the ability of cars to store and exchange information engenders many conversations about connected cars of the future, and how they will shape everything from active safety to how we see mobility.

As smartphones begin to approach market saturation – and with smartphone shipments forecast to account for two-thirds of all phone shipments by 2017, this point is rapidly approaching – carriers will need to seek out new sources of revenue.

Global service provider revenue is on track to reach $1.9 trillion in 2012, up 4 percent from 2011. Asia Pacific will account for about 1/3 of global service provider revenue by 2016, propelled by China Mobile, the world’s largest mobile operator by revenue and subscribers, said Infonetics Research.

Upselling services and increasing bandwidth caps may provide some cover in the short term, but long term solutions will only come from new technologies, new implementations, and new markets. The Connected Car segment is shaping up to be one such new market.

AT&T has signed GM, lining up to provide 4G LTE connectivity across most of the 2015 fleets for Chevrolet, Buick, GMC, and Cadillac. This is just the sort of new-market strategy that will keep major carriers growing, even as their traditional consumer mobile device markets slow.

According to Juniper Research, consolidation within the commercial fleet telematics space has yet to run its course, though ultimately global fleet telematics players are likely to emerge from today’s front-runners.

Trials of V2V (vehicle to vehicle) and vehicle to infrastructure (V2I) are on-going in some markets, although wide-spread deployment remains a long way off. Insurance telematics is reaching the point of wide-scale deployment particularly in certain markets such as the US, Italy and the UK. Commercial Telematics, meanwhile, will spread to smaller commercial vehicle classes, driven by potential efficiency gains and proven cost-savings.

With consumer demands and government mandates driving the connected car market, industry experts believe the connected car will be the next big thing for the automotive industry.

Future generations of cars and devices will rely more on cloud-based backend systems for content, information, and services, turning the car as we know it into a huge data repository, opening new avenues of business opportunities for service industries and content providers.

Arvind Krishna

[email protected]