On October 16, 2013 J’son & Partners Consulting representatives together with JSON TV group
participated in the “Motorola Solutions Analysts Day” event that had been held by Motorola Solutions 1 in
the technical center Caterham FI in Oxfordshire UK and organized specially for analytical agencies.
The participants overviewed the highly-technological solutions that have the concept of “Connected Car”
(for example: the prototype of police car was presented). Full video about the event can be seen on JSON
TV portal: Link 1 and Link 2).
Connected Car – is one of the most perspective hi-tech directions. This topic was also widely discussed on
the Mobile World Congress in Barcelona (please, visit
for more information – an example of
the information-entertaining automobile system).
J’son & Partners Consulting presents main results of
the research “Connected Car: automotive
telematics
and
information-entertaining
automobile systems, 2013 – 2017”.
«Connected Cars»
Each year automobiles becomes more and more complicated with highly technological elements. New
quality standards, ecological norms, high requirements for safety and comfort are being discussed. Cars
should possess new functions apart from the general ones.
In 2013 – 2025 9th times growth of solutions for the passengers’ cars is expecting in the consumer sector
according to consulting company SVD Embedded systems. Wide range of new services and programs is
waiting for the car users. Solution structure for passengers cars include:
 Embedded systems: include embedded communication modules, SIM and entertaining systems.
Most of solutions are oriented for the safety, traffic management, payments for the ride etc.
 Systems, connecting to the mobile phone (tethering 2): telephones are being used as a chain
between a car and network. Solutions mostly oriented for navigation and entertainment.
1
Motorola Solutions company – one of the leading providers of goods and services, such as provision of the critically important communications for
commercial buyers and government institutions.
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the source of information – J’son & Partners Consulting.
™ J’son & Partners [registered trade mark].
1
 Integrated systems: necessary applications integrated in a car. Solutions oriented for navigation
and entertainment.
Monitoring systems supporting the drivers’ management, could solve several tasks, such as cars’
monitoring, logistics management in companies, increase the safety level and also cut the costs for car
operation. The following instruments help to cut the costs:

Drivers identification – an opportunity to track the style of driving and compare the
economic efficiency (time of driving/completed way/following the pre-confirmed way etc);

Targeted car use analysis and style of driving of each driver. Help to optimize costs for
repair and car maintenance;

Management of routes and geozones;

Fuel/Gaz control;

Driving history.
The necessity to produce and mass installation of embedded modems with a special SIM-card is
constraining the development of embedded systems. Such problem for tethering can be solved easily – on
a base of general IP-address.
Advantages of tethering:
 Use of less expensive equipment (in comparison with embedded systems).
 Direct costs for connection and use of services for the end customers.
 Positive impact on the external modems. Due to the short period for mobile devices update,
external modems will be more appropriate in comparison with embedded modems.
Nevertheless even the tethering fans admit that this technology is enough only for some options and
cannot provide distance management of a car, following routes in case a car had been stolen etc.
Development of tethering technology includes:
 Use of different opportunities (for example: increasing the level of Bluetooth PAN/DUN, improving
the pairing – process);
 Establishment of agreement for work principles of new generation of devices for tethering
(including WifiDirect).
Smartphone is becoming a component of automobile system.
Integration of smartphones, Tablet PCs and operational car system provide an opportunity to
listen music online, receive access to the web-data, broadcasting video for passengers etc.
A lot of car manufacturers prefer the development of Connected Car (using new services of
smarphones and Tablet PCs) rather than to install any embedded devices.
According to Juniper Research estimates the share of cars connected to smartphone in 2017 will reach
20% of the total number of consumer cars in North America and West Europe. In the next five years 90
mln. of connected cars will be produced.
Step by step world car manufacturers are transforming a car to be compatible with smartphone. Last year
Toyota added to its models the wireless smartphone charger, Nokia announced an integration of its map
services and Google is developing self-propelled vehicles, all these actions provide new business
opportunities.
2
Tethering (to tie/band) - use of mobile phone as an access spot for other devices to the networks’ services of data transfer via mobile operators.
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the source of information – J’son & Partners Consulting.
™ J’son & Partners [registered trade mark].
2
Telematics and car industry
M2M system is a crucial factor for telematics 3 development. Key factors for creation are principles of data
gathering, analysis of information and provision of services, connecting to information.
According to J'son & Partners Consulting the global M2M market volume was 108 mln.USD in
2011. In 2015 it is expected to reach 359.3 mln.USD. M2M market will have 6% share of the
total subscribers base of mobile operators in 3 years (18.4 mln. devices). Russian market will
reach 107,5 bln.RUB in 2015. Telematics will develop on developing markets very fast (excl.
China).
Insurance telematics – is a very prospective market that can bring profit to users and population in
general. Users will be able to identify their style of driving and cut the costs for insurance premium if they
use a “safe driving method”. The world market of insurance telematics will grow in 2013 averagely for 81%
(from 5.5, mln. people that will use these services) and will reach 107 mln. users in 2018. As a result, the
market of new IT insurance services will grow in 20th times for the next 5 years.
Fig.1. Global premium forecast in car insurance (calculated with a help of telematics)
120
100
bln. USD
80
60
40
20
0
2012
2013
2014
2015
2016
2017
2018
2019
2020
Source: J’son & Partners Consulting
The volume of Russian market was 10 bln. RUB in 2011 and 12 bln. RUB in 2012. Last years the annual
growth rate of number of cars where navigation equipment is installed is around 38 – 40%.
3
Telematics — sphere of informatics that include the telecommunication sphere
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the source of information – J’son & Partners Consulting.
™ J’son & Partners [registered trade mark].
3
Fig.2. Russian market of transport telematics and satellite navigation
Source: М2М telematics, 3S-Telematics
OEM-manufacturer – produce telematics by OEM-approach 4. Product is being sold under the original
brand to the retail customers and at the same time this product is being produced with a typical or
customized component. OEM-manufacturer is a company that collects an end product, OEM-supplier is a
company that supplies the typical components (or customized).
OEM-manufacturers revenues from equipment sales in 2012 were 0.8 bln. EUR and will reach 1.7 bln. EUR
in 2017. The forecasting average annual growth is 16%. The average annual rates of equipment sales will
be higher than the average growth rate of revenues from resale (8%).
Fig. 3. Dynamics of OEM-manufacturers revenues
1,8
1,6
1,4
bln. EUR
1,2
1
0,8
0,6
0,4
0,8
1,2
1,0
1,4
1,6
1,7
0,2
0
2012
2013
2014
2015
2016
2017
Продажи
оборудования
Sales of equipment
Source: GSMA
For 2017 the revenues structure is the following: 12.7% - direct sales of equipment (in the total revenue
structure of OEM-manufacturers); 66.7% - providing services, 13.6% - resales (CRM etc) and 8.1% - data
transfer.
Sales of equipment will be one of the most dynamic segment (average yearly growth rates of revenues for
2012 – 2017 will be 16%, and 8% for resale).
4
OEM— abbreviation for “Original equipment manufacturer” and relate to any product that had been produced by OEM approach
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the source of information – J’son & Partners Consulting.
™ J’son & Partners [registered trade mark].
4
A lot of market players are actively participating in the automotive telematics development and are trying
to make an impact in the development of “connected cars”.
Intel announced a launch of investment projects in the automobile industry. The key goal will be the
development of new solution for cars with communication opportunities. Microsoft provides an embedded
operational system based on Windows CE for car use (Windows Embedded Automative).
Government and local authorities are also interested in the development of Connected Car. Real time
management of traffic flow will help to decrease the number of “stops” for 40%, time for traffic for 25%
and gas use for 10% and all of this is possible thanks to Connected Car technology. All these costs savings
are crucial especially for the future when the number of passengers cars will reach 1.7 bln. in 2035 (data of
International energy agency). The penetration rate of cars in China will grow from 50 cars per 1000
persons to 300 cars per 1000 persons in 2035.
Mobile connection operators gain profit from the increasing data traffic, increasing penetration rate of
mobile phones and embedded devices on the automobile market. Operators could develop new business
concentrating on M2M services.
Automotive telematics is a perspective field for “Big Data” use. Gathering information via intellectual
analysis of data, using the experience in particular industries (for example, experience of drivers, providing
services for the interested parties only etc.).
Drivers’ data (profile and interests/preferences). Car manufacturers, insurance companies etc. can use
these data and develop services and goods on a base of drivers’ personal information. This field of market
is already taken by the largest market players and providers of telecom services.
According to SBD, from 2012 – 2018 the global market of Connected Car will grow 3 times and will be over
40 bln. EUR. Segment of “associated” services is still the large (traffic jam info, call-centers, entertaining
web-services etc). In 2018 it will reach 24.5 bln. EUR in comparison with 9.3 bln. EUR in 2012.
And even faster it will grow other segments of Connected Car market:
■ sales of equipment (for ex. telematics devices) 5.75 times increase (from 1.2 bln. EUR to 6.9 bln. EUR);
■ connection services (for ex. mobile data transfer) 5 times growth (from 814 mln. EUR to 4.1 bln. EUR).
Telematics services market will grow from 1.8 bln.EUR to 4.5 bln.EUR in the timeline. (2,5 times)
Fig.4. Global market of Connected Car, 2009-2018
Source: GSMA, SBD, May 2013
Copyright © 2013, J’son & Partners Consulting. Media can use any text, diagrams and data contained in this market review only with giving credit to
the source of information – J’son & Partners Consulting.
™ J’son & Partners [registered trade mark].
5
Video from Mobile World Congress, MWC (feat. J’son & Partners Consulting analysts and JSON TV) about automobile informationentertaining system is available here:
http://www.youtube.com/watch?v=PQzg6DHkwS4&feature=c4-overview&list=UUcAVm5_pk1bjJwoIC3JFeiw
Demonstration of technical features of intellectual system “police car” was presented on Motorola Solutions Analysts Day event
(October 16, 2013), video link:
http://www.youtube.com/watch?v=gQavYQ8WcjM&feature=c4-overview&list=UUcAVm5_pk1bjJwoIC3JFeiw.
Other videos from Motorola Solutions Analysts Day event (feat. J’son & Partners Consulting analysts and JSON TV) is presenting
here: http://www.youtube.com/watch?v=enj5VnEvsUM&feature=c4-overview&list=UUcAVm5_pk1bjJwoIC3JFeiw – interview with
David Perry (Director for marketing solutions for government and public security systems, Motorola Solutions) about the
perspectives of LTE use in the sphere of public security
Detailed results of the report are presented in the full version of the
Report: “Connected Car: autom otive telem atics and inform ationentertaining autom obile system s, 2013 – 2017” (114 p)
Content
Resume
1. Connected car and automobile M2M business
1.1. Introduction
1.2. Automotive telematics’ market structure
1.2.1. Telematics and M2M
1.2.1. 1. М2М-ecosystem
1.2.2. Telematics: users and applications
1.2.3. Consumer sector
1.2.3.1. Information-entertaining automobile systems
1.2.3.2. Insurance telematics
1.2.3.3. Recovering of a stolen car
1.2.4. Commercial telematics
1.2.4.1. Tracking of transport and cargo
1.2.4.2. Drivers management
1.2.4.3. Engineering services and management
1.2.5. Vehicle-to-infrastructure systems, V2X
1.2.5.1. Definition and current state
1.2.5.2. Examples of V2X use
1.2.5.3. Tests
1.2.5.4. Dedicated Short-Range Communications, DSRC
1.2.5.5. Barriers
1.3. Telematics and automobile industry
1.3.1 Regional markets characteristics
1.3.2. Attention to the developing markets
1.4. Main trends, drivers and restrictions
1.4.1. Trends
1.4.1. 1. «Green» initiatives
1.4.1. 2. Development of mobile internet and apps for smartphones
1.4.1. 3. Telematics services provided by large automobile producers
1.4.2. Drivers
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the source of information – J’son & Partners Consulting.
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6
1.4.2. 1. Good awareness and knowledge of telematics services
1.4.2. 2. Government regulations and orders
1.4.2. 3. New standards and technologies
1.4.3. Restrictions and barriers
1.4.3. 1. Expectation of highly specialized services for low prices
1.4.3. 2. Long terms for deployment
1.4.3. 3. Fragmented market
1.4.3. 4. Informational security
1.5. Role of smartphones and Tablet PCs
2. Key market players, business-models and approaches
2.1. Introduction
2.2. Market structure
2.2.1. Perception of values
2.2.1.1. Mobile apps for automobiles and “Big Data”
2.2.1. 2. Meaning of tethering
2.2.2. Approaches and strategies
2.2.1. OEM and telematics of resale market
2.2.2.2. Preferences in telematics
2.3. Groups of influence
2.3.1. Car manufacturers
2.3.1.1. Audi Connect
2.3.1.2. BMW
2.3.1.3. Cadillac
2.3.1.4. FordSync
2.3.1.5. Hyundai
2.3.1.6. Lexus
2.3.1.7. Mercedesmbrace
2.3.1.8. Toyota Entune
2.3.1.9. Others
2.3.2. Manufacturers of microschemes and modules
2.3.3. Communications operators
2.4. Standardization of approaches
2.4.1. Sectoral and other initiatives which are supporting software with an open source code
2.4.1.1. Tize
2.4.1.2. CarConnectivityConsortium
2.5. Conclusions
3. Current market volume and forecasts of consumer automotive telematics
3.1. Introduction
3.2. Integrated telematics
3.2.1. Forecasting methods
3.2.1.1. Subscribers’ base
3.2.1.2. Revenues of consumer telematics
3.2.1.3. OEM-telematics
3.2.2. Revenues from end customers
3.2.2.1. Revenues from OEM-manufacturers
3.2.2.2. Revenues on resale market
3.2.2.3. Combined revenues (OEM and secondary market)
3.3. Tethering(connecting) of smartphone and direct integration with application
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the source of information – J’son & Partners Consulting.
™ J’son & Partners [registered trade mark].
7
3.3.1. Long-term perspectives for apps’ integration
3.3.2. Smartphones tethering forecasting methodology
3.3.3. Revenues from apps integration and tethering
3.4. Insurance telematics
3.4.1. Concept of “insurance telematics”
3.4.2. Concept of “Pay as you drive”, PAYD
3.5. Forecasts for insurance telematics
3.5.1. Methodology
3.5.1.1. Insurance telematics’ subscribers
3.5.1.2. Revenues of insurance telematics
3.5.2. Incomes of insurance telematics
3.5.3. Equipment and installation
3.5.4. Total revenues from insurance, equipment and installation
3.6. Conclusion
4. Commercial telematics market size and forecasts
4.1. Introduction
4.2. Market sophistication and range if services
4.3. Commercial telematics market forecasts
4.3.1. Forecasting methods in the commercial telematics
4.3.2. Revenues of commercial telematics
4.3.2.1. OEM-manufactures’ revenues
4.3.2.2. Revenues from resale
4.3.2.3. Combined revenues (OEM and resale)
4.4. Conclusion
5. Commercial telematics: market players’ profiles and positioning on the market
5.1. Introduction
5.2. Evaluation of vendors
5.2.1. Methodology of vendors’ evaluation
5.2.2. Restrictions and interpretation
5.2.3. Matrix of positioning results
5.2.4. Grouping of vendors
5.2.5. Strategic decisions – corporate actions
5.3. Profiles of market players
5.3.1. Daimler Fleet Board
5.3.2. FleetMatics
5.3.3. Hughes Telematics (Verizon)
5.3.4. MiXTelematics
5.3.5. Masternaut
5.3.6. OctoTelematics
5.3.7. OnStar
5.3.8. TelenorConnexion
5.3.9. Telogis
5.3.10. TomTom
5.3.11. Trimble
5.4. Conclusion
Annex 1. List of companies mentioned in the report
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the source of information – J’son & Partners Consulting.
™ J’son & Partners [registered trade mark].
8
List of Figures
Fig.
Fig.
Fig.
Fig.
Fig.
Fig.
Fig.
Fig.
Fig.
Fig.
Fig.
Fig.
Fig.
Fig.
Fig.
Fig.
Fig.
Fig.
Fig.
Fig.
Fig.
Fig.
Fig.
Fig.
Fig.
Fig.
Fig.
Fig.
Fig.
Fig.
Fig.
Fig.
Fig.
1. Evaluation of the annual revenues from use of Connected Car per 1 passengers car
2. Global forecast of number of M2M connections
3. Demand for different type of services
4. Forecast of global sales of solutions for passengers vechicals
5. Forecast of global sales dynamics (embedded systems) by countries
6. Forecast of global sales dynamics (systems connected to the mobile phones) by countries
7. Forecast of global sales dynamics (integrated systems) by countries
8. Dynamics of smartphones penetration rate
9. Forecast of OEM-telematics penetration rate among new cars by segments, 2015
10. Forecast of sales (OEM consumer embedded telematics) thousand pcs.
11. Forecast of sales (consumer embedded telematics) on the “resale” market, thousand pcs.
12. Forecast of device price (consumer telematics) on the “resale” market, USD
13. Forecast of device price (OEM consumer telematics) on the “resale” market, USD
14. Forecast of revenues level (OEM consumer telematics), mln. USD
15. Forecast of revenues level (consumer embedded telematics) on the “resale” market, mln.USD
16. Market structure of the consumer embedded telematics, $
17. Forecast of revenues level (consumer embedded telematics), mln.USD
18. Forecast of global sales dynamics (tethering systems) by countries
19. Scheme of insurance telematics
20. The significance of various consumer information
21. Dynamics of number of subscribers (insurance telematics)
22. Forecast of insurance premium (counted with a help of telematics), in USA and Europe
23. Forecast of insurance premium (counted with a help of telematics) in the world
24. Forecast of revenues (sales and installation of equipment for insurance telematics) in the world
25. Forecast of total revenues (insurance premium, equipment and installation) in the world
26. Russian market of automotive telematics and satellite navigation
27. Forecast of revenues (sales of telematics) in Europe
28. Forecast of revenues (sales of telematics) in Europe by countries, 2015, mln.EUR
29. Dynamics of OEM-manufacturers’ revenues
30. Dynamics of sales structure (telematics systems) in Japan
31. Forecast of sales dynamics (telematics systems) in Japan
32. Dynamics of resales
33. Dynamics of total revenues
List of Tables
Table 1. Car manufacturers’ key directions of operations
Table 2. Creation of added value of Connected Car by different market players
Table 3. Overview of challenges and opportunities that face the car manufacturers
Table 4. Overview of offers and strategies of some car manufacturers in the sphere of Connected Car
Table 5. Options overview, provided by Audi
Table 6. Options overview, provided by BMW
Table 7. Options overview, provided by Hyundai
Table 8. Options overview, provided by Mercedes
Table 9. Overview of the challenges and opportunities that face the suppliers
Table 10. Overview of the challenges and opportunities that face the operators
Table 11. Forecast of sales of cars, including light trucks, thousand pcs.
Table 12. SWOT-analysis of development of tethering technology (with embedded modem for example)
Table 13. Assessing the impact of the insurance telematics on the value chain of insurance companies
Table 14. Matrix of results of vendors’ positioning on commercial telematics market
Table15. Group of vendors’ matrix on the available opportunities.
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the source of information – J’son & Partners Consulting.
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9
Table16. Profile of Daimler FleetBoard company
Table 17. Profile of FleetMatics company
Table18. Profile of Hughes Telematics (Verizon) company
Table19. Profile of MiXTelematics company
Table20. Profile of Masternaut company
Table21. Profile of OctoTelematics company
Table 22. Profile of OnStar company
Table23. Profile of Telenor Connexion company
Table 24. Profile of Telogis company
Table 25. Profile of TomTom company
Table 26. Profile of Trimble company
List of companies mentioned in the report
«M2M telematica»
3S-Telematica
ABI Research
Apple
Audi
BMW
Bosch
Bug Labs
Car Connectivity
Consortium
Cisco
Cohda
Componentality
Continental
Daimler
Deutsche Telekom
Ericsson
FleetMatics
Ford
Frost&Sullivan
Gazmobil
GeneralMotors
Google
Hyundai
IHS
Intel
Juniper Research
KIA
Machina Research
Masternaut
MBtech Consulting GmbH
Microsoft
Mix Telematics
Nissan
Nokia
Nvidia
NXP
Octo Telemativs
OnStar
Opel
Pandora
Qualcomm
Roland Berger
SBD
Skoda
StarLine
Telenor Telogis
TomTom
Toyota
Trimble
Verizon
Volkswagen
Volkswagen
Volvo
General Motors
Mega-F
«Glonass»
«Ingosstrakh»
Caesar Sattelit
____________________________________________________________________________
The newsletter was prepared by the J'son & Partners Consulting Company. We exert every effort to provide actual and forecasting data
representing the situation in full and available at the time of the publication of the material. J'son & Partners Consulting reserves the right of
revising the data after publication of some new official information by individual players.
CONTACT FOR MORE INFORMATION:
Pavel Ermolich
Commercial Director
Pavel@json.ru
www.json.ru
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the source of information – J’son & Partners Consulting.
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10