Technavio’s latest report on the global connected car machine to machine (M2M) market provides an analysis on the most important trends expected to impact the market outlook through 2020.
Technavio defines an emerging trend as a factor that has the potential to significantly impact the market and contribute to its growth or decline.
The research study reports that the global connected car M2M connections market is expected to multiply at a CAGR of over 28%, whereby the global connected car M2M services market is expected to post a CAGR of over 30% during the forecast period. Some of the major factors contributing to the growth of the market are growing concern for safety and security, rising demand for infotainment services, burgeoning usage of broadband, and the emergence of Internet of things.
The top four emerging trends driving the global connected car M2M market according to Technavio’s research analysts are:
Introduction of autonomous vehicles
According to the report, autonomous vehicles, which have secure social, economic, and mobility-related benefits, are among the major innovations in the automotive industry. Although sophisticated autonomous or unmanned vehicles are already in existence, these vehicles are yet to be commercialized. Many automobile manufacturers are conducting pilot tests to launch fully automated driverless cars in the market. For instance, Google and car manufacturers like Ford and Volvo have taken the first step to bring driverless cars into the market.
“In early 2015, Volvo announced the testing of its autonomous driving system Drive Me, which uses a combination of lasers, radars, and cameras to keep a track of the surroundings and help cars navigate independently,” says Rakesh Kumar Panda, Technavio’s lead M2M and connected devices research analyst.
Transformation of non-connected cars into connected cars
Car manufacturers are converting and upgrading old cars that are not Internet-enabled to connected cars. Many telecommunications operators and telematics companies provide connected car services such as vehicle monitoring, roadside assistance, and other services for older cars at minimal costs. For instance, Verizon provides Verizon Vehicle, an after-market connected car service, designed to provide connected car features to around 200 million cars at a cost of USD 14.99 per month under a two-year contract agreement. Verizon’s connected car services offer accident notifications, easy access to customer-care agents, parking services, stolen vehicle location assistance, and predictive diagnostics for vehicles.
Advertisements in app-connected vehicles
Most application developers enable connections between smartphones and connected cars. As connected cars store data pertaining to user’s preferences, numerous companies are advertising their products and services in connected cars. App developers gather data from car telematics or drivers’ smartphones to send targeted advertisements.
“In 2014, Kiip, which is a mobile advertisement company and Mojio, a connected car company, entered into a partnership to provide in-app advertisement for connected cars and reward drivers with coupons and discounts,” says Rakesh.
Growing popularity of EVs
The popularity of electric vehicles (EVs) is increasing at a rapid pace among consumers worldwide. As per Technavio’s estimation, almost 120,000 units of EVs were sold in 2014 and it is likely that more than 280,000 units will be sold by 2020. Some of the EVs manufactured by OEMs are Nissan Leaf, Toyota Prius, Toyota RAV4 EV, BMW i3, Honda Accord Plug-in Hybrid, Renault Zoe, Chevrolet Volt, and Mahindra Reva e20.
Connected car M2M connections are contributing to the growing popularity of EVs. The sales of EVs are increasing as related M2M connections enable power management, LBS for charging points, electronic meters, and safety and security devices. Moreover, many cloud service providers are investing in R&D for the development of smart grids for EVs.
Some of the top vendors in the global connected car M2M market as analyzed by Technavio’s analysts are: BMW, Gemalto, General Motors, Sierra Wireless, Verizon Telematics