Connected Car Emerges as IoT Use Case
The outlines of a data-driven connected car market are emerging with the rise of infrastructure and “vehicle-to-everything” communications seen as key drivers of growth, a new analysis concludes.
A growing list of established networking vendors also are creating an emerging use case for the Internet of Things, observers note.
By 2022, market watcher Juniper Research forecasts that 50 percent of all passenger cars will have at least one network connection. As car makers and network operators join with developers of so-called V2X services, the connected car market is expected to expand at roughly a 21-percent annual rate over the next five years to an estimated $49.2 billion, the researcher said in a report released Monday (June 19).
Among the emerging applications for V2X services are automated payments for gas, parking and tolls. “Early rollouts of infrastructure could take up to five years to implement, allowing stakeholders time to cultivate pertinent use cases” such as IoT, the market researcher stressed.
Meanwhile, connected car infrastructure and services will require buy-in not only from automakers but also from other stakeholders who will need to forge public-private partnerships. That view is based on the notion that cars are becoming mobile data platforms and, according to Juniper analyst Sam Baker, “level of service will be more important to drivers than vehicle performance itself.”
Along with V2X communications, consumers are expected to opt in larger numbers for telematics, which uses wireless devices to transmit real-time data related to vehicle use and maintenance requirements. Juniper forecasts that consumers will spend more than $100 billion by 2022, creating major incentives to invest in rolling out “vehicle-to-infrastructure” services.
Those services will include emergency response, weather and road condition updates, navigation and “smart city integration,” the researcher predicted.
Meanwhile, network operators are expected to be among the key telematics service providers. Larger players such as AT&T NYSE: T), Verizon (NYSE: VZ) and Vodafone have already made early forays into the telematics market, a white paper noted.
Connected cars are also seen as a key IoT play, with companies such as Cisco System’s (NASDAQ: CSCO) Jasper IoT unit—which the networking vendor acquired last year—seen as among the “established leaders” in the nascent market along with European network operator Vodafone (NASDAQ: VOD), U.K.-based Octo Telematics and KORE Wireless, an IoT and machine-to-machine (M2M) connectivity specialist based in Alpharetta, Ga.
As the market expands from fleet-oriented commercial telematics to a much larger consumer market, Juniper predicts major infrastructure investments in V2X services as vendors seek to tap into another huge source of big data. For example, network operators providing M2M connections are expected to begin upgrading to 3G, 4G and high-capacity 5G networks in order to collect more driver data in real time.
Low latency, high bandwidth and wide coverage of 5G networks “will be key to implementing these new services,” the market researcher said. “Once full V2X technology is included in vehicles, 5G will increase data attributable to connected vehicle services.”
For now, it added, Western Europe and the Asian Pacific look to be the biggest connected car markets, with the North American not far behind.