Summary:

A new report from Juniper Research predicts big uptake for in-car connectivity, which may in turn drive big-data-derived revenue for telematics companies and car manufacturers.

Life360 connected car mockup
photo: Life360

Twenty percent of cars in the U.S. and Western Europe will by 2017 be app-capable, according to analysts at Juniper Research. That figure refers to the total installed base of consumer cars on the road, not just new cars — the vast majority of which will be sold with such capabilities by that point.

In a new report on automotive telematics, Juniper suggested the emergence of the connected car ecosystem would follow from the success of standards such as the Car Connectivity Consortium’s MirrorLink, which aims to help smartphone apps and in-dash displays talk to each other, and also from consumer demand.

“Demand is growing as consumers are used to the smartphone/app combination out of the car and are beginning to want it in the in-car environment,” Juniper analyst Anthony Cox told me. “What is driving this, though, is the fact that it has become easier to do through standards such as MirrorLink and therefore is reaching critical mass very fast.

“Getting the in-vehicle entertainment system right can be the difference between the sale of a $15,000-$20,000 car or not, therefore if others are doing it a vehicle manufacturer cannot risk getting left behind… The cost of including this feature will be very low, and the benefits extremely high.”

While connectivity has many potential uses in the vehicle, Juniper says infotainment will be the big driver – first through smartphone-tethering, then in-car systems. That said, the analyst house also noted a negative factor that could come into play: a slowing-down of the rate at which people are actually buying new cars in the developed economies.

One interesting point in the report was that of the big data opportunities that come up when you stick connectivity into a car. This could mean extra revenue for both telematics companies and the car manufacturers themselves, Cox suggested:

“While direct revenue from services is the most evident direct benefit from telematics, there are other benefits which may be equally important, such as the value which resides in the data that is generated from telematics installed in the vehicle.

“Indeed, there is increasing interest in seeking to develop a revenue stream derived from analytics of the data accrued from the myriad electronic interactions within telematics-enabled vehicles. Furthermore, if the datasets that are collected within the vehicle are then combined with related datasets from partners, the combined data becomes far more powerful — and valuable — from a predictive analytics perspective.”

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