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IoT Apps for Public Transport will Transform Smart Cities

The Internet of Things (IoT) has many use cases within the public sector, but none will likely have the positive economic impact of comprehensive smart city initiatives across the globe. A key component of these plans is transportation optimization and enhancement in congested urban areas.

Berg Insight released new findings about the growing market for Intelligent Transport Systems (ITS). The market value for ITS deployed in public transport operations in Europe was €1.35 billion in 2015. Growing at a compound annual growth rate (CAGR) of 7.2 percent, this number is expected to reach € 1.91 billion by 2020.

ITS Technology Market Development

The North American market for public transport ITS is similarly forecast to grow at a CAGR of 8.1 percent from €0.59 billion in 2015 to reach €0.87 billion in 2020.

According to the Berg Insight assessment, the market for ITS in public transport is in a growth phase which will continue throughout the forecast period. Increased funds made available to infrastructure spending, demands from travelers and smart cities initiatives contribute to a positive market situation.

A group of international aftermarket solution providers have emerged as leaders on the market for public transport ITS. Major providers across Europe and North America include Canada-based Trapeze Group and Germany-based INIT with significant installed bases in both regions.

IVU is a major player primarily in the German-speaking part of Europe and has also expanded in the North America. Clever Devices and Xerox hold leading positions on the North American public transport ITS market, and the latter also is an international provider of fare collection systems.

Additional companies with notable market shares, according to Berg analysis of the North American market, include RouteMatch, Cubic-owned NextBus, Avail Technologies and TransLoc.

"Similarly to adjacent telematics verticals, the market for public transport ITS has in recent time seen a number of significant cross-border mergers and acquisitions involving European and North American players," said Fredrik Stålbrand, analyst at Berg Insight.

Outlook for Telematics and ITS Growth 

Berg Insight anticipates that the vendor consolidation trend will continue in the upcoming years. "Several players continue to have inorganic growth as a key strategy and further M&A activity can be expected among telematics and ITS providers for public transport in 2017–2018," concluded Mr. StÃ¥lbrand.

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