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Emerging Market Apps for IoT and Fleet Management

While much of the prior research about applications for the Internet of Things (IoT) tend to focus on the developed nations, we're starting to see more interesting opportunities in emerging markets -- particularly in the Asia-Pacific region and in Latin America.

The ongoing development of practical transportation-related use-cases is very promising, given the anticipated return on investment. Commercial vehicle fleet management, specifically the use of sensors and telematics, is an area that's evolving rapidly.

According to the latest market study by Berg Insight, the number of active fleet management systems deployed in commercial vehicle fleets in China was 2.1 million in the fourth quarter of 2014.

Growing at a compound annual growth rate (CAGR) of 22.9 percent, this number is expected to reach 5.9 million by 2019.

Track and Trace systems dominate the market and the installed base so far includes a significant share of low-end systems with comparatively limited functionality by Western standards.

The steep growth anticipated in the upcoming years is expected to be driven by a combination of political decisions to track selected commercial vehicles and the booming e-commerce market which creates demand for efficient transport operations.

According to the Berg assessment, a range of different players are active on the Chinese fleet management market. Top local telematics providers with installed bases of more than 100,000 units include E6GPS and Etrans.

Other major vendors are for example Beijing Zhongdou Technology (Ccompass), Shenzhen Huabao Electronics Technology, Shenzhen Weitongda Electronics and 666GPS. Also a number of Chinese commercial vehicle OEMs have introduced telematics systems.

Examples include Foton and Shaanxi Automobile Group in the truck segment as well as Yutong and King Long Group in the bus segment. The latter is also known as the Three Dragons and includes the brands King Long, Golden Dragon and Higer which are all active in the telematics space.

Only a few international aftermarket solution providers have so far entered the Chinese FMS market and the installed bases of the foreign vendors remain limited.

"Most Western players present in China have installed no more than a few thousand units on this market," said Jan Unander, analyst at Berg Insight. Examples of international fleet management providers active on the Chinese market include Trimble, MiX Telematics, Microlise and Navman Wireless.

There are regulatory hurdles for foreign players related to maps, data handling and SaaS cloud computing models. Unander adds that these issues are expected to remain in the upcoming years.

Berg Insight nevertheless expects that there are promising future business opportunities for Western fleet management providers on the fast-growing Chinese commercial vehicle telematics market.

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