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Technavio: Rising demand for smartphone integration to aid growth of connected cars market

According to the latest market study released by Technavio, the global connected car market is expected to reach USD 144.95 billion by 2020, growing at a progressive CAGR of more than 32%. To calculate the market size, the report considers the revenue from the connected car technologies across all regions.

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The demand for in-vehicle connectivity and telematics has led to technological improvements, which aim at enhancing the overall in-vehicle experience of both the passengers and drivers. As a growing number of consumers have increased the amount of time spent on their personal mobile devices, they expected the same experience from their in-vehicle entertainment and information systems, especially with respect to user interface.

Automobile OEMs have been trying to establish maximum control points in the global connected car market. They have been employing business models to grab the center stage of the connected car ecosystem. Hence, there have been a rise in collaborations between OEMs and other players in the global connected car market to encourage adoption of embedded solutions.

According to Neelam Barua, a lead automotive electronics analyst from Technavio, the luxury car segment will register high adoption of embedded solution as cost is not a parameter for this segment, and these OEMs create differentiation for their product by developing the unique system for their models.

The smartphone penetration across the world has risen significantly in the recent past, and it is expected to grow further thus driving the need for integrating them with the vehicle systems. It is estimated that the global smartphone penetration was about 25% in 2015 and it is expected to reach 38% by 2020. As a result, there has been a rise in demand for high resolution HMI, which can be integrated with smartphones.

“Consumers prefer availability of a strong application base for their connected devices. For instance, Android operating system for smartphones has the highest number of users in the market owing to its support for an array of third-party applications,” says Neelam.

Tethered solutions like Mercedes Command use cell phones for connectivity, and run the apps on the in-car infotainment instead of smartphones. Apple Carplay and Android Auto are the prominent players in the tethering technology, and their growing adoption across vehicles is a positive trend for the tethering solutions segment of the global connected car market.

MirrorLink is another tethering solution that allows smartphone compatible. With MirrorLink, the user can power the car’s digital display and this feature makes it a low-cost alternative when compared with the embedded solution. Hence, this segment is expected to grow in terms of adoption from developing regions of the world.

The top vendors highlighted by Technavio’s research analysts in this report are Alpine Electronics ,BMW ,Delphi Automotive, Ford Motor, NXP Semiconductors.

About Piyush Rajan

Asst. Editor |Telematics Wire | Smart automotive

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