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European eCall Legislation Will Accelerate the Growth of Connected Car Services by Mandating Embedded Mobile Technology
London: The GSMA today issued research that details the disruptive impact embedded mobile technology will have on the automobile industry, revolutionising the motoring experience and helping to create a connected car market worth almost 40 billion globally in 2018, up from 13 billion in 20121. According to research firm SBD, 32.6 billion of revenues 83 percent of the total will be driven by the growth of embedding SIM technology into new vehicles to enable mobile connectivity. This will encourage a range of mobile-based services around safety, security, infotainment, traffic information, navigation and vehicle diagnostics. SBD predicts that most, if not all, new cars will have some form of connectivity by 2025, due largely to the rapid growth of embedded mobile technology.
The growth of the connected car market will also be boosted by the European Commission's selection of embedded mobile' for its eCall in-vehicle emergency call services mandate, in place of alternative connectivity means such as smartphone integration or tethered solutions. The initiative requires all new car models in member states from 2015 to have fitted the European eCall system, which will connect a vehicle to emergency services following a collision and provide vital location and impact information. The mandate's impact in Europe will be felt almost immediately, with eCall sales in 2016 expected to reach 7 million units.
Embedding mobile technology in cars will not only save lives, but also drive a range of new services and provide a significant revenue opportunity for the mobile and automotive industries, said Michael O'Hara, Chief Marketing Officer, GSMA. The rapid growth of this market will be driven in part by positive regulatory action, particularly in Europe and in emerging markets such as Russia and Brazil. We are in the midst of a connected car revolution and it is vital that the mobile and automotive industries work together to deliver scalable and pervasive connected experiences and ensure this market reaches its potential.
Sales of new cars are expected to reach more than 100 million2 globally by 2018, more than 35 million3 of which will be shipped with embedded mobile technology, representing a 31 percent penetration rate and far outstripping growth of alternative connectivity means. By contrast, 21 million cars will be fitted with smartphone integration (18 percent) and just 10 million with tethered solutions (nine percent). The rapid growth of the connected car market will result in associated revenues three times larger in 2018 than in 2012, comprising:
24.5 billion from in-vehicle services, such as traffic information, call centre support and web-based entertainment (up from 9.3 billion in 2012)
6.9 billion from the sale of hardware, such as telematics control units (up from 1.2 billion in 2012)
4.5 billion from the delivery of telematics services, such as customer relationship management, (up from 1.8 billion in 2012)
4.1 billion from the provision of connectivity, which includes revenues from mobile data (up from 814 million in 2012)
Due to regulatory mandates such as eCall, safety and security will be the most common services supported by connected cars, shipping in 41.7 million vehicles globally in 2018, up from 7 million in 2012. In-car infotainment services such as news, weather, social networking and music streaming are expected to be supported by 32.1 million cars (up from 4.3 million in 2012), with navigation services set to ship in 28.5 million cars in 2018, compared with 5.12 million in 2012. Vehicle management applications, such as remote diagnostics and maintenance, will be supported by 14.8 million cars, compared with 5.5 million in 2012.
With greater demand for new cars in emerging nations, legislative action in the BRIC countries (Brazil, Russia, India and China) will also be pivotal drivers of the connected car market. Regulators in Russia are set to deploy legislation for new cars and trucks to ship with embedded mobile systems that will alert the emergency services in the event of an accident. Sales of cars with embedded connectivity should also be boosted by regulation in Brazil that stipulates that all new vehicles are equipped with stolen vehicle tracking systems.
The growth of the connected car market is also being aided by key initiatives such as the GSMA's Connected Car Forum, where leading mobile operators and automakers come together to overcome barriers to growth and to improve the speed and uptake of telematics and infotainment services, said O'Hara. As a result, not only will mobile operators play a major role in connecting all new cars by 2025, they are also well positioned to move further up the value chain and provide innovative value added services to their customers.
For more information on SBD's forecasts, please see www.gsma.com/connectedliving/connected-car-forecast-next-five-years.
For more information about the GSMA's mAutomotive programme, please visit http://www.gsma.com/connectedliving/mautomotive.
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