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© Analysys Mason Limited 2014
Connected cars: worldwide trends, forecasts and strategies 2014–2024
Research Report
Connected cars: worldwide trends, forecasts and
strategies 2014–2024
June 2014
Morgan Mullooly and Michele Mackenzie
© Analysys Mason Limited 2014
Connected cars: worldwide trends, forecasts and strategies 2014–2024
About this report
This report provides:
a 10-year forecast of the percentage of new passenger-
carrying road vehicles (cars) sold that include a
connectivity solution, as well as the proportion of vehicles
in use that have a connectivity solution
key implications and recommendations for mobile network
operators (MNOs)
an in-depth analysis of trends in the automotive sector that
will affect the growth of the connected car solution market
an overview of key trends in the connected car sector.
This report is based on several sources.
Analysys Mason‟s internal research, including our
forecasts of M2M device connections, revenue and
average revenue per connection (ARPC), and interviews
with stakeholders in the connected car market.
We have also validated our assumptions by comparing
them with operator insights and discussions with key
stakeholders in the automotive sector.
2
Geographical coverage Connectivity types
Regions modelled:
North America (NA)
Western Europe (WE)
Central and Eastern Europe
(CEE)
Developed Asia–Pacific (DVAP)
Emerging Asia–Pacific (EMAP)
Latin America (LATAM)
Middle East and North Africa
(MENA)
Sub-Saharan Africa (SSA)
Embedded
fully
semi
hybrid
Mobile device tethered
Aftermarket modular
commercial vehicle fleet
tracking
usage-based insurance (UBI)
Figure 1: Summary of report coverage [Source: Analysys Mason, 2014]
© Analysys Mason Limited 2014
Connected cars: worldwide trends, forecasts and strategies 2014–2024
Contents
6. Executive summary
7. The market for connectivity solutions in cars is growing
8. Almost half of all vehicles will have embedded connectivity by 2024,
despite the long lifespan of modern vehicles
9. Key implications
10. Key implications for mobile operators
11. Forecasts
12. A number of connectivity options are being used to connect vehicles to
mobile networks
13. Embedded connectivity will be driven by sales of new cars, robust M2M
module form factors and advances in SIM-card technology
14. Fully embedded connectivity enables vehicle owners to avoid complex
set-up or device pairing processes, which could impair the user
experience
15. Semi- and hybrid-embedded connectivity enables car owners to „bring
your own SIM‟ (BYOS)
16. Embedded connectivity enables the best radio experience and vehicle
design innovations are affecting the in-vehicle performance of handsets
17. The percentage of vehicles with embedded connectivity will be almost
six times greater in 2024 than in 2014, growing from 15% to 89%
18. Mobile device tethered connectivity will be driven by new propositions,
such as Apple CarPlay, MirrorLink and Google‟s Android Projected
Mode
3
19. VMs will not rely exclusively on a single mobile device tethering
platform, so as to cater to their large and diverse consumer base
20. Mobile device tethered connections will grow from 4.3 million in 2014 to
645 million in 2024, at a CAGR of 65%
21. Innovative aftermarket OEMs are taking advantage of the momentum in
the connected car market and forming partnerships with MNOs
22. We expect the overall market for aftermarket modular connectivity
solutions to be small because it will experience significant challenges
23. Additional regional insight on the prospects for aftermarket modular
telematics solutions
24. Aftermarket UBI connections will peak at 56 million in 2019, before
declining as support for UBI through embedded connectivity increases
25. Commercial vehicle fleet tracking connections will grow from 45 million
in 2014 to 177 million in 2024, growing at a CAGR of 15%
26. Key trends
27. Semi-autonomous vehicles are only a decade away from becoming
commonplace
28. In the long term, autonomous cars will be entertainment hubs and drive
huge volumes of mobile data
29. LTE is the basis for new connectivity services in the car
30. Case study: EE has prioritised building out LTE coverage for the UK‟s
transportation network
Slide no. Slide no.
© Analysys Mason Limited 2014
Connected cars: worldwide trends, forecasts and strategies 2014–2024
Contents
31. Operators can climb the connected car value chain with cloud-
connected services that offer anywhere, any-access multimedia and
SaaS
32. M2M middleware cloud platform providers are developing solutions that
enable operators to create value-added services for VMs and end users
33. Some operators are beginning to capitalise on opportunities in the
connected home space, which is linked to the connected car market
34. It is uncertain how willing consumers will be to pay for connected car
services
35. Operators could increase connected car revenue by tapping into the „big
data‟ opportunity, although ICT firms are better placed to do so
36. Regional insights
37. New car sales regional insight: forecasts for new vehicle sales and
vehicles in use
38. New car sales regional insight: North America and Western Europe
39. New car sales regional insight: Central and Eastern Europe and
Developed Asia–Pacific
40. New car sales regional insight: Emerging Asia–Pacific and Latin
America
41. New car sales regional insight: the Middle East and North Africa
and Sub-Saharan Africa
4
42. Market definition
43. Definition of geographical regions [1]
44. Definition of geographical regions [2]
45. About the authors and Analysys Mason
46. About the authors
47. About Analysys Mason
48. Research from Analysys Mason
49. Consulting from Analysys Mason
Slide no. Slide no.
© Analysys Mason Limited 2014
Connected cars: worldwide trends, forecasts and strategies 2014–2024
List of figures
Figure 1: Summary of report coverage
Figure 2: Percentage of new cars sold that include a connectivity solution
by type, worldwide, 2014, 2019, 2024
Figure 3: Percentage of vehicles in use that include a connectivity solution,
by solution type, worldwide, 2014–2024
Figure 4: Summary of connectivity approaches for vehicle manufacturers
Figure 5: The characteristics of fully embedded connectivity
Figure 6: The characteristics of semi- and hybrid-embedded connectivity
Figure 7: Percentage of new cars sold that include an embedded
connectivity solution, worldwide, 2014–2024
Figure 8: Cars in use that include an embedded connectivity solution, by
region, worldwide, 2014–2024
Figure 9: The characteristics of mobile device tethered connectivity
Figure 10: Consortiums that support mobile device tethered connectivity for
vehicles
Figure 11: Percentage of new cars sold that include a mobile device tethered
connectivity solution, worldwide, 2014–2024
Figure 12: Cars in use that include a mobile device tethered connectivity
solution, by region, worldwide, 2014–2024
Figure 13: The characteristics of aftermarket modular connectivity
5
Figure 14: Vehicles in use that include a usage-based insurance connectivity
solution, by region, worldwide, 2014–2024
Figure 15: Vehicles in use that include a fleet management telematics
solution, by region, worldwide, 2014–2024
Figure 16: The evolution of user-facing automotive technology
Figure 17: Mobile data traffic year-on-year growth, by region, 2011–2012
Figure 18: XchangE autonomous vehicle concept by Rinspeed
Figure 19: Operational LTE networks by region, 2Q 2014
Figure 20: EE case study
Figure 21: Deutsche Telekom‟s personalised in-vehicle content concept
Figure 22: Profiles of M2M middleware cloud platforms for supporting
connected car services
Figure 23: Nest integration in Mercedes IVI
Figure 24: Deutsche Telekom‟s business model for connected car „big data‟
Figure 25: New car sales by region, worldwide, 2014 and 2024
Figure 26: Cars in use by region, worldwide, 2014 and 2024
Figure 27: Regional breakdown used in this report
Figure 28: Regional breakdown used in this report
© Analysys Mason Limited 2014
Connected cars: worldwide trends, forecasts and strategies 2014–2024
The percentage of vehicles with embedded connectivity will be almost six
times greater in 2024 than in 2014, growing from 15% to 89%
17
Figure 7: Percentage of new cars sold that include an embedded connectivity
solution, worldwide, 2014–2024 [Source: Analysys Mason, 2014]
Figure 8: Cars in use that include an embedded connectivity solution, by
region, worldwide, 2014–2024 [Source: Analysys Mason, 2014]
15%
22%
30%
38%
48%
57%
66%
74%
80%
85%89%
0%
20%
40%
60%
80%
100%
201
4
2015
201
6
201
7
201
8
201
9
202
0
202
1
202
2
2023
202
4
Pe
rce
nta
ge
of
ne
w c
ars
so
ld
3045
67
97
139
192
259
339
433
539
654
0
100
200
300
400
500
600
700
201
4
201
5
2016
201
7
201
8
201
9
202
0
202
1
202
2
202
3
202
4
Ca
rs (
mill
ion
)
SSA
MENA
LATAM
EMAP
DVAP
CEE
WE
NA
© Analysys Mason Limited 2014
Connected cars: worldwide trends, forecasts and strategies 2014–2024
New car sales regional insight: forecasts for new vehicle sales and
vehicles in use
The economic climate has not been favourable for new car
sales since around 2007. Consumers lacked confidence in
the economy and postponed purchases. Pent-up demand for
new vehicles will boost car sales worldwide in the next half
decade, because sales in developed markets should return to
normal levels. Sales will be strongest in the short term as
dealers push sales to clear their stock backlog.
However, new forms of car rental, leasing and sharing in
developed markets will put some downward pressure on new
sales. Companies such as DriveNow, Hailo, Liftshare,
Sidecar and Uber enable easy and affordable rental and
sharing of vehicles by using technologies such as
smartphones, GPS, social networks, remote unlock, mobile
payments, among others. The emergence of these „dynamic
carpooling‟ businesses could affect sales in urban areas in
particular – where owning a car outright is less necessary
than in rural and suburban areas, and where mobile network
coverage is consistent. However, regulatory uncertainty is
having an impact on these businesses.
In the emerging Asia–Pacific market, large populations, rapid
economic growth, and a growing middle class will boost sales
dramatically, from 26 million in 2014 to 82 million in 2024.
37
Figure 25: New car sales by region, worldwide, 2014 and 2024 [Source:
Analysys Mason, 2014]
Figure 26: Cars in use by region, worldwide, 2014 and 2024 [Source:
Analysys Mason, 2014]
0
25
50
75
100
NA
WE
CE
E
DV
AP
EM
AP
LA
TA
M
ME
NA
SS
A
Ve
hic
les (
mill
ion)
2014
2024
0
200
400
600
NA
WE
CE
E
DV
AP
EM
AP
LA
TA
M
ME
NA
SS
A
Vehic
les (
mill
ion)
2014
2024
© Analysys Mason Limited 2014
Connected cars: worldwide trends, forecasts and strategies 2014–2024 45
Executive summary
Key implications
Forecasts
Key trends
Regional insights
Market definition
About the authors and Analysys Mason
© Analysys Mason Limited 2014
Connected cars: worldwide trends, forecasts and strategies 2014–2024
About the authors
Morgan Mullooly (Analyst) is part of Analysys Mason‟s Enterprise team. His primary area of focus is on the
machine-to-machine (M2M), or Internet of Things (IoT) sector. This includes analysis on a variety of topics including
IoT enterprise requirements, forecasting, vendor profiles and service provider scorecards. Morgan was previously
the lead analyst for Analysys Mason‟s Spectrum research programme, focusing on spectrum valuation, LTE
strategies and white space technologies. Morgan has a Master‟s degree in Philosophy and Public Policy from the
London School of Economics.
Michele Mackenzie (Principal Analyst) is an analyst for Analysys Mason‟s IoT and M2M Solutions research
programme. She has 15 years of experience as an analyst. Prior to joining Analysys Mason in February 2014,
Michele was a freelance analyst with a focus on M2M and IoT technology and trends including smart cities,
transport, intelligent buildings, fleet management and telematics. She has written reports for Machina Research and
produced research for other clients on areas such as mobile broadband and digital media. Michele worked for
Ovum for 12 years where she focused on consumer mobile applications and held various roles including Practice
Leader for Consumer Services. She has also worked as a consultant for Ovum's consultancy division.
46
© Analysys Mason Limited 2014
Connected cars: worldwide trends, forecasts and strategies 2014–2024
About Analysys Mason
Knowing what‟s going on is one thing. Understanding how to take advantage of events is quite another. Our ability to understand the
complex workings of telecoms, media and technology (TMT) industries and draw practical conclusions, based on the specialist
knowledge of our people, is what sets Analysys Mason apart. We deliver our key services via two channels: consulting and research.
47
Consulting
Our focus is exclusively on TMT.
We support multi-billion dollar investments, advise clients on
regulatory matters, provide spectrum valuation and auction support,
and advise on operational performance, business planning and strategy.
We have developed rigorous methodologies that deliver tangible
results for clients around the world.
For more information, please visit www.analysysmason.com/consulting.
Research
We analyse, track and forecast the different services accessed by
consumers and enterprises, as well as the software, infrastructure
and technology delivering those services.
Research clients benefit from regular and timely intelligence in
addition to direct access to our team of expert analysts.
Our dedicated Custom Research team undertakes specialised and
bespoke projects for clients.
For more information, please visit www.analysysmason.com/research.
© Analysys Mason Limited 2014
Connected cars: worldwide trends, forecasts and strategies 2014–2024
Research from Analysys Mason
We provide dedicated coverage of developments in the telecoms, media and technology (TMT) sectors,
through a range of research programmes that focus on different services and regions of the world.
48
Alongside our standardised suite of research programmes, our Custom Research team undertakes specialised, bespoke research
projects for clients. The dedicated team offers tailored investigations and answers complex questions on markets, competitors and
services with customised industry intelligence and insights.
To find out more, please visit www.analysysmason.com/research.
© Analysys Mason Limited 2014
Connected cars: worldwide trends, forecasts and strategies 2014–2024
Consulting from Analysys Mason
For more than 25 years, our consultants have
been bringing the benefits of applied intelligence
to enable clients around the world to make
the most of their opportunities.
49
Our clients in the telecoms, media and technology (TMT)
sectors operate in dynamic markets where change is
constant. We help shape their understanding of the future
so they can thrive in these demanding conditions. To do
that, we have developed rigorous methodologies that
deliver real results for clients around the world.
Our focus is exclusively on TMT. We advise clients on
regulatory matters, help shape spectrum policy and develop
spectrum strategy, support multi-billion dollar investments,
advise on operational performance and develop new
business strategies. Such projects result in a depth of
knowledge and a range of expertise that sets us apart.
We help clients solve their most pressing problems,
enabling them to go farther, faster and achieve their
commercial objectives.
To find out more, please visit
www.analysysmason.com/consulting.
© Analysys Mason Limited 2014
Connected cars: worldwide trends, forecasts and strategies 2014–2024
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