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Connected Vehicles Apply Open Source Technologies

The Internet of Things (IoT) is already having a significant impact on product development in the automobile industry. As the IoT applications mature, analysts are predicting the increasing adoption of open source hardware and software technologies.

Moreover, while 4G networks would be preferred by automakers to power the connected car, it is 3G networks that will carry the data driving the majority of its global telematics and infotainment services revenues.

In fact, according to the latest market study by ABI Research, it will be after 2020 that 4G becomes the leading connection technology for OEM telematics revenues.

It is typical for verticals with long product lifecycles, such as automotive, to show delayed uptake of next generation technologies, such as 4G, due to slower penetration into the installed vehicle base.

"There are exceptions. For instance, in the United States, Japan and Korea, 4G will lead revenue generation," said Dan Shey, VP and IoT practice director at ABI Research.

But interestingly it will take until 2018 and into 2019 for 4G to carry the majority of the connected vehicle data traffic driving OEM telematics revenues.

In India, 2G will stay the dominant telematics network carrier for the next 5 years; China's revenue segmentation is similar to India but crosses to 3G driving the most revenues in 2020.

The types of supply chain services generating connected car revenues are equally diverse and highly country dependent. Today, professional services including hardware and software integration, consultancy, and project management generate the majority of global IoT supplier revenues.

But by 2019, revenues from OEM telematics platform vendors such as Ericsson, Verizon, Wireless Car and Airbiquity will take the lead. Data and analytics revenues will also become a major revenue generator later in the forecast period exceeding connection, security and network services revenues.

By 2020, the connected car supply chain will start seeing some dramatic shifts, which are reflected in the changing revenue ratios between the different service categories.

Open source hardware reference platforms, third party mobile ecosystem integration, and the shift towards open cloud-based approaches will start eating into traditional Tier-one professional service revenues, forcing vendors such as Harman, Bosch and Continental to move into new areas and competences -- including data analytics, OTA and security monitoring services.

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