Friday, 19 February 2016

To Embed, to Tether or to Integrate - the Dilemma of the $141 Billion Connected Car Market

To embed, to tether or to integrate? Most people would probably wonder what we are talking about, but those in the Connected Car business know that these three verbs define the entire sector. The Connected Car, just like any other mobile connectivity service, can be delivered via a multitude of ways. The car can have an embedded SIM provided by the auto-maker for purposes relating to telematics, or the car could come with a digital interface that can be powered by a SIM of the driver's choice or the car could just have a compatible digital display that a connected mobile device can be plugged into, activating the display and the knobs and controls the driver can use to access features on his phone while he is driving.

In the marketplace, all these 3 methods have seen an increasing traction, as leading auto-makers, service providers and tech giants such as Apple and Google roll out Connected Car solutions that leverage their existing offering. Apple via its CarPlay and Google via its Android Auto are driving the take up on the tethering technology. So does MirrorLink, a OS-agnostic tethering solution with its cross-platform tethering solution that enables any MirrorLink compatible smartphone to power the car's digital display. For embedded services, major Operators such as AT&T, Orange and Telefonica have long partnered with leading auto-makers and transport service providers to provide telematics and fleet management solutions for their M2M services. As for the integrated solution, which is undoubtedly the most promising revenue driver for service providers' Connected Car service, service providers partner with auto-makers to provide 3G or 4G connectivity to cars by providing subscribers a SIM that can be used to deliver both telematics and infotainment services in the car. To date, the integrated model has been rolled out by a large number of operators on newly launched car models. In US, the connectivity to the car is included in standard shared plans at an access fee of just USD$10.

Allied Market Research, a research company, in its recent report on the Connected Car Market said that although the embedded connectivity is still the most used connectivity method for the Connected Car with a 40% share of the market in 2013, by 2016, the integrated connectivity will take over with a market share of 45%. The firm anticipates the global connected car market to hit USD$141 Billion by 2020, growing at a CAGR of 32.7% from 2014 to 2020. According to AMR, the integrated technology grants users the freedom to choose their own data plans which could be one of the major reason why this method will surpass others in the market in the consumer market. 

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