Technavio Predicts Explosive 32% CAGR Surge in Connected Car Market
The global market for connected cars is projected to hit $145 billion by 2020, expanding at a strong annual growth rate of over 32%, according to a study by Technavio.
Increasing demands for in-vehicle connectivity and telematics have driven technological advancements aimed at improving the in-car experience for both drivers and passengers. With more people spending significant time on their smartphones, they expect a similar interface and experience from their car’s entertainment and information systems.
The report titled “Global Connected Car Market 2016-2020” analyzes market revenue and emerging trends. It calculates market size by considering the revenue from connected car technologies across all regions.
Analysts divided the connected car market into three main segments based on connectivity type: embedded, integrated, and tethered products.
Embedded
Car manufacturers (OEMs) are striving to control a larger share of the connected car market by collaborating with other key players. They are focusing on embedded products, especially in the luxury car segment where cost is less of a concern. Luxury car brands develop unique systems for their models to stand out.
Integrated
Smartphone use worldwide has surged and is expected to keep growing, leading to a need for integration with vehicle systems. In 2015, global smartphone penetration was about 25% and is predicted to reach 38% by 2020. This growth drives the demand for high-resolution HMIs (Human-Machine Interfaces) that work seamlessly with smartphones. Consumers prefer a wide range of applications for their connected devices, much like the Android operating system, which supports various third-party apps.
Tethered
Tethered products like Mercedes Command use mobile phones for connectivity, allowing apps to run on the car’s infotainment system. Key players in this segment include Apple CarPlay and Android Auto, which are increasingly being adopted in vehicles. MirrorLink, another tethering technology, allows compatibility with smartphones to control the car’s digital display, offering a cost-effective alternative to embedded products. This segment is expected to grow, particularly in developing regions.
The top vendors in the report are Alpine Electronics, BMW, Delphi Automotive, Ford Motor, and NXP Semiconductors.
