Embedded Telematics Active Subscribers to Reach 158.9M in 2020

A new research report by Berg Insight forecasts that shipments of OEM embedded telematics systems worldwide will grow from 8.4 million units in 2013 to 54.5 million units in 2020 – a CAGR of 30.6 percent.

The number of telematics subscribers using embedded systems is forecasted to grow at a compound annual growth rate of 38.1 percent from 16.6 million subscribers in 2013 to 158.9 million in 2020.

However, the research firms warns that by 2020 many users will only have access to safety services such as eCall. Berg Insight forecasts that the number of active subscribers using at least one additional premium telematics service will grow to about 112 million worldwide at the end of 2020.

“A key factor that influences the growth in active subscribers is the length of the free trial period included in the price of new carsâ€?, explained André Malm, Senior Analyst, Berg Insight.

The free period now typically ranges from 6—12 months in the case of Chrysler, GM, Mercedes-Benz, Toyota and Volkswagen to 3 years for Hyundai and 10 years for BMW.

“Renewal rates for telematics subscriptions after the free period expires are presently relatively low,â€? he added.

However, car brands are now launching packages or offer app stores to better meet the needs of individual customers.

“New split-billing solutions being introduced by telecom operators also increase flexibility in business models for car manufacturers offering connected car services to their customersâ€?, said Mr Malm.

Split-billing can for example enable car manufacturers to bundle services such as eCall, roadside assistance and diagnostics for the lifetime of the car, while high bandwidth applications like infotainment and car hotspot features are billed separately.

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comScore: Google Maps App 64.5M Users, Apple Maps 42M in the U.S.

According to research firm comScore there were 64.5 million adult users of Google Maps apps in the United States in June against 42 Million for Apple Maps.

This is a significant success for Apple considering that Google Maps is present on both iOS and Android.

In June iOS had 62.6 million app users while Android had 76.1 million.

it is also interesting to note that no other LBS app is entering the top 25.

More: see the full comScore report below.

15.7% CAGR for Fleet Management Systems in Russia, CIS & Eastern Europe

The number of fleet management systems (FMS) deployed in Russia/CIS and Eastern Europe is expected to grow from 2.9 million in the last quarter 2013 to 5.9 million by 2018.

This study from Sweden-based market research firm Berg Insight forecasts a compound annual growth rate (CAGR) of 15.7 percent.

The penetration rate of FMS in the total population of non-privately owned commercial vehicles is estimated to increase from 12.1 percent in 2013 to 21.7 percent in 2018.

The Russian market accounts for 45 percent of the region’s total installed base and is forecasted to grow at the same path the rest of the region, from 1.3 million active FM units at the end of 2013 to 2.6 million by 2018.

Reduced forecast

Berg Insight has reduced its previous forecast. One year ago (read here) the analyst house was forecasting the regional market to reach 6.1 million monitored vehicles by 2017 – growing at a CAGR of 22.6 percent – and the penetration to grow up to 23.8 percent in 2017. It is clear that the deceleration of the economic growth in Russia is likely to affect directly the transport sector.

Market led by Gurtam

Belarus-based Gurtam is the leading FM software provider active across most countries in the region with over 300,000 commercial vehicles under management.

Other top providers with more than 100,000 active FM units for commercial vehicles in the region include ENDS, NIS group (which includes M2M telematics), Arvento Mobile Systems and TechnoKom which are all top-ranking telematics players on their respective domestic markets. Additional key vendors include SCOUT, Mobiliz, Omnicomm and Fort-Telecom.

Despite the market growth there are also been a few companies struggling. Both M2M Telematics and Russian Navigation Technologies have lost many employees and the latter even filed for bankruptcy in 2014, indicated Berg Insight.

“There has been an inflow of new start-ups gaining market shares at the expense of struggling Russian top telematics playersâ€?, said Rickard Andersson, Senior Analyst, Berg Insight.

A key example is the Russian newcomer SpaceTeam which was founded one year ago and now already holds a significant market share on the domestic market.

“None of the major international solution providers based in Western Europe, the US or South Africa have however so far managed to capture any leading positions in this regionâ€?, said Andersson. He adds that Berg Insight anticipates increased merger and acquisition activities in the region in the upcoming years as the ongoing consolidation wave in Europe and North America reaches the Russian telematics market.

More than 100M Cars with CarPlay and Google Projected Mode Expected in 2020

The automotive industry will see more than 370 million Smartphone apps integration software units (CarPlay, Google Projected Mode, MirrorLink, etc.) in-use by 2020, according to a forecast from IHS Automotive. This compares with 6.9 million units expected end of 2014.

In this forecast IHS also integrates third party or OEM solutions such as Aha by Harman or Ford SYNC AppLink.

Cars with Google Projected Mode software are expected to top 100 million units (cumulative integrations over the period) by 2020, up from just 86,000 units in 2014.

Cars with Apple CarPlay, with 105,000 units in 2014, will exceed 94 million units in 2020, a compound annual growth rate of 210 percent.

MirrorLink is expected to reach 54 million cumulative sales by the end of 2020. According to Egil Juliussen, the report’s co-author and research director at IHS Automotive: “The rational is that Apple and Google has such clout with apps developers that CarPlay-compatible apps and GMP-compatible apps will quickly appear–much faster than for MirrorLink or other approaches.“

IHS has factored in their MirrorLink numbers the fact that Microsoft will probably use MirrorLink-based approach for Windows 8 phones.

North America Leads the Pack

At a regional level, North America is expected to continue to lead the industry in automotive apps integration, with more than 115 million expected by 2020. This is due to the U.S. being the pioneer in deploying such systems and high Smartphone penetration and with extensive Smartphone apps usage.

Western Europe will remain in second place through 2019 and will have over 65 million apps integration enabled cars in use by 2020.

China will grow rapidly and will surpass Western Europe in 2020, with over 71 million apps integration enabled cars. As the apps integration technology and market matures, the growth will be driven by car sales, Smartphone penetration and apps availability.

General Motors

OEM adoption and integration of apps in vehicles is expected by IHS to be led by General Motors, for whom embedded apps development for infotainment systems will continue to increase.

“GM also is using HTML5 as its apps platform, which is well-known by developers and predicted to continue as the standard for web apps and web content. This platform also creates a larger knowledge and competency base that the auto industry can leverage for growing a large auto apps portfolio,“ wrote IHS Automotive.

“Linux Making Rapid Inroads into Infotainment Systems,“ Said IHS

Global sales of the Linux OS in automotive will rise to 53.7 million units in 2020, up from less than 1 million in 2013, according to IHS Automotive.

The fast growth will allow Linux to overtake its top competitors Microsoft (in 2017) and QNX from BlackBerry (in 2020).

“The market for automotive infotainment operating systems represents a major opportunity for software vendors, with platform sales climbing to nearly 130 million units in 2020–about the size of the global PC market in 1999,” said Egil Juliussen, research director for IHS Automotive.

“Growth is being driven by the multiplicity of platforms in many cars, with a single auto potentially having one OS for the head unit and navigation, another for the telematics system and hands-free interface for mobile phones, and yet another for the rear-seat entertainment system. Over the long term, Linux will take the lead in this burgeoning market, as auto manufacturers and their suppliers are attracted by the advantages of the OS.”

GM Leading Linux Adoption

GM is currently the volume leader in Linux shipments, with most Cadillac models now using the OS in their CUE system. Similar Linux-based head units are also arriving or will be deployed on Buick, GMC, Chevrolet and Opel models.

For their part, BMW, PSA and Jaguar/Land Rover are committed to using a version of Linux that is compatible with the GENIVI platform.

GENIVI version

GENIVI is an industry group founded to drive adoption of an open-source development platform for infotainment. The group’s platform consists of Linux-based core services, middleware, and open application layer interfaces.

While there are many flavors of Linux, IHS expects the GENIVI version to lead the market given the large number of automakers committed to using the platform.

QNX & Microsoft

QNX is today the undisputed market leader in the automotive infotainment OS market with 53 percent share of units in 2013. However, IHS expects it will “cede share to Linux in the coming years because of stronger competitors and uncertainty surrounding its parent firm, BlackBerry.“

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Container Tracking Business: Early Stage But Fast Growing

"The market for container tracking solutions is still in its early stage," according to market research firm Berg Insight in a report published this week.

The number of active tracking units deployed on intermodal shipping containers was 137,000 in the Fourth quarter of 2012, up from 89,000 a year earlier. The first use cases to adopt container tracking (a system that incorporates data logging, satellite positioning and data communication) are aftermarket solutions mounted on high value cargo and refrigerated containers.

Growing at a compound annual growth rate (CAGR) of 49.1 percent, this number is expected to reach 1.0 million by 2017. The penetration rate of remote tracking systems in the total population of containers (around 20 million globally) is estimated to increase from 0.7 percent in 2012 to 4.1 percent in 2017.

Key Players

The satellite communication provider Orbcomm has after the recent acquisitions of StarTrak, PAR LMS and GlobalTrak emerged as the largest vendor of intermodal container tracking solutions featuring GPRS or satellite communication. The company had achieved an installed base of 19,000 units at the end of 2012.

Envotech and Skybitz are the second and third largest providers having 18,000 and 15,000 systems respectively installed on intermodal containers.

Omnitracs, Pointer Telocation, Savi Technology and PearTrack Systems all have an installed base of approximately 10,000 units.

ID Systems, Honeywell Global Tracking and Kirsen Global Security are other major vendors with an installed base of over 5,000 units each.

Berg Insight also noticed that the intermodal container tracking market has attracted wireless M2M communication providers. according to the report, "Several operators including Orbcomm, AT&T, Everything Everywhere, Telenor and Inmarsat (shareholder in SkyWave) have assumed the role of end-to-end solution providers of container and other asset tracking applications."

Alltogether the market remains quite fragmented, even if as noticed by Berg Insight a consolidation movement has already started.

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157m Smartphone Shipped in 3Q 2012

Mobile analyst firm Juniper Research estimates that the number of smartphone shipments exceeded 157 million in the third quarter of 2012, led by Samsung. This compares with shipments of 132.9 million estimated by Juniper for the previous quarter.

In the quarter, Samsung shipped a record 56.3 million smartphones, representing almost double the market share of its rival Apple, which sold 26.9 million. The flagship device of the Korean company, the Galaxy S3, played a key role, with estimated sales of 18 million in the quarter.

However, with the holiday season still to come, and with the new iPhone 5, Apple is expected to increase its sales in the fourth quarter

ZTE, LG: up, Nokia & RIM down

ZTE shipped almost 20 million smartphones over the first three quarters with third quarter sales exceeding both Nokia and RIM. Nokia shipped just 6.3 million smartphones in the third quarter — a 63% fall compared to Q3 2011. This was partly due to customers waiting to buy into the new Windows 8 platform.

RIM’s recent results — which run to a different financial schedule — nevertheless hint at continuing problems for the Canadian firm with just 7.7 million quarterly smartphone shipments.

In comparison LG posted a 24% quarter-on-quarter growth with a record 7 million smartphone shipments.

ABI: Fitness Watches & Heads-up Displays Are the Future of Standalone GPS Devices

Despite the hype around the decline of Personal Navigation Devices and the rise of smartphone applications, there is a long-term future for dedicated GPS devices, according to market analysis firm ABI Research.

Total GPS device revenues are forecast to grow from $6.5 billion in 2011 to over $8 billion in 2017, according to their research. With the exception of PNDs, all device categories grew in 2011, including cycling computers, golf caddies, and recreational devices.

“With over 40 GPS watches available in 2012, this is the standout device category,“ explained senior analyst Patrick Connolly. “Motorola, Epson, New Balance, Magellan, and Polar all entered the market, with a number of others lining up devices for 2013. We will also see increasing partnerships between device manufacturers and smartphone application developers, which is vital in extending reach and opening up new sales channels.”

“Looking to the future, the GPS-enabled eyewear market is expected to expand beyond skiing into winter sports and fitness, as well opening up new markets such as motorcycling, making it one of the strongest device revenue categories by 2017.”

As an example of that Recon Instruments, the current leader in Sport Heads-up display (listen our podcast here) has recently expanded its product range from skiing to skydiving.

ABI Research practice director Dominique Bonte added, “Looking at the competitive environment, Garmin is already showing that it can continue to grow despite significant declines in its PND business, but they also face increasing competition from the likes of TomTom/Nike, Mitac, Pioneer, Suunto, Recon Instruments, and a host of sporting apparel and watch manufacturers.”

IMS: “Apps Unlikely to Represent Significant Revenue for Car Makers“

In a new report, research firm IMS Research belives that consumers are not ready to pay for apps in their car.

A poll of of 2,250 people across the United States, United Kingdom and Germany showed that only 28 percent of respondents would be willing to pay for apps in the car, if they were available.

Results from the survey also showed that a ‘willingness to pay’ for apps doesn’t always equate to extra revenue. The survey showed that 55 percent of smartphone and tablet owners would be willing to pay for apps, but in actuality nearly 70 percent have never paid for an app.

From bad to worse, tthe survey also showed that nearly 60 percent of respondents would prefer to get a car specific app through their smartphone app store rather than from a portal from the vehicle manufacturer.

But not everything is negative in the findings of the survey. According to IMS Research “The survey showed that if apps were available in the car, driving specific apps (such as navigation) would be most popular and something consumers would be willing to pay for.

Furthermore, this is a nascent market and consumer perception may change as familiarity increases. Finally, monetising the in-vehicle experience isn’t the only reason to offer in-car apps. By engaging with drivers through apps on a daily basis, auto makers may find they increase brand loyalty, which is perhaps a more valuable commodity in the longer term.“

IMS: 95% of New EU Cars to be Connected in 2019, Thanks to eCall

IHS subsidiary IMS Research is predicting in a new report that the number of connected cars in Western Europe will grow to 15 million units by 2019, meaning more than 95 percent fitments of new car, thanks to eCall.

eCall is a proposal to enact legislation mandating the fitment of a crash proof embedded emergency calling system in all new cars sold within the European Union in 2015.

IMS Research believes that the eCall mandate, beyond its cost to the automotive industry, brings up interesting opportunities for the car manufacturers.

“While several manufacturers have tried and failed to sell emergency calling to consumers over the past ten years, what has become clear through both business success and consumer research is that drivers will pay for services that are relevant to their daily lives.“

Since no killer app has been yet brought to life by a car maker in terms of connected service, there is still room for innovation and, hopefully, revenue generation, according to IMS Research.

Recommandation of the European Commission

However, at this stage eCall still remains a recommandation of the European Commission and has not been approved by the European Parliament yet (read here).

Car manufacturers are reluctant to implement it because of its cost and, due to the widespread penetration of phones, would prefer a solution that would leverage the phone of the driver or passengers rather than installing a costly wireless modem and SIM. This is for example the thinking of Pim van der Jagt, Managing Director Ford Research Europe in a recent interview with GPS Business News (read here).