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Automobile Telematics Enable New App Development

The global automotive industry continues to explore ways to integrate the internet of things (IoT) technology into vehicles during the manufacturing process. Connected car capabilities provide the foundation for third parties to offer innovative new telematics-related applications.

According to the latest worldwide market study by Berg Insight, the number of active aftermarket car telematics units will grow at a compound annual growth rate (CAGR) of 20.6 percent from 58.7 million at the end of 2018 to 150 million at the end of 2023.

Automobile Telematics Market Development

Berg Insight’s definition of an aftermarket car telematics solution includes both cellular GNSS and RF-based solutions. A growing number of aftermarket telematics services have in the past few years become available for consumers that want to add services and connectivity to automobiles.

Berg Insight forecasts that shipments of aftermarket car telematics devices for consumer applications will grow from 20.3 million units in 2018 to reach 51.0 million in 2023.

"Aftermarket car telematics solutions are useful in a number of application areas including stolen vehicle tracking and recovery (SVT/SVR), vehicle diagnostics, Wi-Fi hotspot, convenience applications and usage-based insurance," said Martin Svegander, an analyst at Berg Insight.

Vehicle diagnostics allows service providers such as dealers and workshops to improve service offerings to car owners. Dealers and finance companies can also leverage telematics for internal fleet management and manage the customer lifetime value.

Examples of convenience applications enabled by aftermarket telematics devices include remote control of certain vehicle functions such as door lock/unlock and finding the last vehicle parking position.

Aftermarket car telematics services are offered by a wide range of vendors. Examples of leading telematics companies selling services via third parties or directly to consumers include Octo Telematics, Spireon, Ituran, Mojio, Scope Technology, Automatic Labs (SiriusXM), CalAmp (LoJack), Bright Box, Viasat Group and Vodafone Automotive.

Distributing services and products through third parties is the most common way to market for aftermarket car telematics solution vendors. Important sales channels include insurance companies, dealers, mobile network operators and online retailers.

Outlook for Automobile Telematics Application Growth

Some solution vendors also market their products on their own websites and through telemarketing. The connected car market is highly important for mobile network operators that bet on the IoT market.

Many telecom service providers have already started to explore the aftermarket car telematics opportunity and they are well-positioned to provide such services.

"Mobile network operators can accelerate sales by targeting their existing customer base as well as leverage an ecosystem of partners to pursue data monetization opportunities for their installed base of car telematics solutions," added Mr. Svegander.

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