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How Connected Cars will Create Multiple Opportunities

Important developments in the consumer and commercial telematics arena have subtly changed the nature of the industry altogether -- particularly within the consumer telematics space. Vehicle manufacturers are taking telematics extremely seriously, as connectivity can now make or break the sale of a much more valuable item, that is, the purchase of an automobile.

Global revenues from consumer and commercial telematics are forecast to reach nearly $20 billion by 2018 -- with additional soft revenues being generated from areas such as car servicing, big data enabled by telematics, and enhanced customer service offerings.

These additional soft revenues will form a key part of the future Connected Cars market as they will allow automotive manufacturers to generate revenues throughout the lifetime of the vehicle, rather than just at the point of sale.

Findings from a new market study by Juniper Research, however, claims that these soft revenues will still remain a major untapped revenue source for the consumer telematics industry.


How Embedded SIM Cards Enable New Revenues

Meanwhile regulation in key markets -- especially those in Europe and Latin America -- will mandate the inclusion of Subscriber Identity Modules (SIMs) in all new vehicles allowing Original Equipment Manufacturers (OEMs) to develop revenue streams around the embedded SIM model.

According to Juniper's assessment, split billing will also become increasingly important.

"The ability to split the telematics bill, pioneered by major operators and systems integrators will have a positive impact on the telematics market. Granular billing for infotainment and other services will lead to new business models," said Anthony Cox, associate analyst at Juniper Research.

Juniper anticipates that app integration into the vehicle through smartphone-tethering and direct integration into the head-unit will be accelerated by the launch of services like Apple’s in-vehicle offering CarPlay.

It argued that in-vehicle apps will become widespread in the next five years, even though most apps will be available free of charge.

Further findings from the market study include:
  • Widespread smartphone-tethering and in-vehicle Apps will continue to drive down the price of vehicle manufacturers’ own embedded infotainment services.
  • The use of 4G LTE is becoming widespread in developed markets for telematics and infotainment, particularly in North America and Europe, despite a higher module cost.

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