Monday, 1 August 2011

Machina Research Press Release: Automotive M2M forecast to hit 1.4 billion connections generating revenue of EUR157 billion by 2020

The automotive sector promises a plethora of connected applications from in-vehicle entertainment to pay-as-you-drive car insurance making it one of the biggest and most dynamic M2M opportunities

[London, UK 1st August 2011]

Automotive will be one of the most vibrant sectors for machine-to-machine (M2M) communications over the next ten years according to a new report from M2M analysts Machina Research. From less than 90 million connections globally in 2010 the market will grow to almost 1.4 billion connections by the end of 2020. Of these, over one billion will be application-specific ‘aftermarket’ devices, and over 300 million will be vehicle platforms, such as GM’s OnStar, supporting multiple applications.

Commenting on the findings, the report’s author Matt Hatton said: “With 1.4 billion connected devices in 2020, automotive will be one of the biggest M2M segments. Today it is dominated by security and tracking applications, courtesy of high adoption of stolen vehicle recovery (SVR) services in markets such as Brazil and South Africa where concern over car theft is rife. By 2020 the domination of security applications will have given way to a more diverse landscape, with major applications including emergency assistance (on the back of regulatory mandates such as eCall in Europe), multi-application vehicle platforms and pay-as-you-drive insurance.”

Revenue will rise from EUR10 billion in 2010 to EUR157 billion in 2020. In the early years, aftermarket hardware sales will account for a large proportion of the revenue: 40% in 2011. Over the forecast period, as the market starts to saturate and applications gradually migrate to the vehicle platform, the importance of the devices market diminishes. By 2020 it accounts for only 20% of revenue. The provision of services over the hardware comes to dominate. However, for mobile network operators there is not guarantee of riches in store. The proportion of overall revenue generated by mobile network traffic is small, reaching only 3.2% (EUR5 billion) in 2020. Commenting on these numbers Hatton said: “As with most other M2M sectors mobile network operators are not going to make their fortunes from the mobile network traffic generated by the automotive sector. They need to be more involved with the service wrap. Worldwide only EUR5 billion is guaranteed to them for carrying mobile traffic but there is a further EUR120 billion in service revenue of which they should aim to take a portion”.

It would be a mistake, cautions Hatton, to consider the automotive M2M opportunity as a homogenous mass: “Automotive M2M is a diverse market and MNOs, module vendors, automotive OEMs and all other service providers must be aware of the dynamics of each of the sub-segments. It involves a combination of B2B, B2C and B2B2C sales either provided via aftermarket devices or through the vehicle platform. Services range for very low bandwidth, high integration and rarely-used applications such as security and tracking through to high bandwidth in-vehicle infotainment which is more reminiscent of consumer mobile broadband.”

About the report

Machine-to-machine (M2M) Communication in the Automotive Sector 2010-20 provides invaluable qualitative and quantitative analysis of the emerging opportunity for machine-to-machine communications in cars, motorcycles and other road vehicles. The report reviews the major drivers and barriers for growth of M2M in the sector and analyses the key market dynamics, including how MNOs, fixed operators, service providers and vendors might go about identifying and realising addressable opportunities. Each application is examined individually with case studies and forecast analysis.

The forecast excel data sheet includes very granular 10 year market forecasts for 54 countries and 6 regions. The forecast covers numbers of connections, traffic and revenue for each of the identified automotive application groups (including Vehicle Platforms, Security & Tracking, Emergency Assistance, Vehicle Recovery/Roadside Assistance, Entertainment & Internet Access, Navigation, Voice, Insurance and Manufacturer) with splits by technology (2G, 3G and 4G) and a break-out of mobile traffic revenue.

For a copy of the executive summary, table of contents and a blank sample data sheet, or to order your copy, find out more about the report or discuss annual subscriptions please contact sales@machinaresearch.com.

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