Connected (aka smart) cars are called this way for a reason - their main goal is to digitally connect us with each other for the sake of higher quality of life. It is all about safety and comfort, where a driver knows exactly when to speed up or slow down, when it is time to rest after a long trip behind the wheel and book a room in the nearest hotel before you arrive there, find where your friends are having dinner and reserve a table at the same place.
This year, the majority of car makers have come to the same conclusion - selling conventional cars is no longer an opportunity. What really in demand today is the mobility with all the customer services, accessibility and advanced functions such as power management for electric automobiles.
In the perspective, connected cars will not only be serving the role of driving assistants, but they will eventually become entirely self-driven and secure. Adapted speed and braking technologies are already appearing in the market together with the controlled steering and improved GPS systems. These features will soon make self-driven cars a reality by starting with hands-free driving in the nearest future.
In the year 2015, the market of connected cars looks quite promising. According to Business Insider, it is growing 10 times as fast as the rest of the car market and is expected to see 45% annual growth rate in the following 5 years. However, by 2020 out of estimated 220 million smart cars on the road throughout the world, only 88 million of them will have connected services activated. In 2015, prices for such cars are still on top, but they are expected to significantly drop in the next few years. Today, the selling price of $55,000 per e-car is justified by the tendency of the connected cars market leaning toward the luxury category.
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A study held by PWC suggests that international sales of smart cars and related products will increase by nearly 4 times in the next 5 years contributing over $149 billion in revenues in a passenger car niche.
IHS Automotive forecasts 20% of all cars sold around the world this year will cover some of the embedded connectivity, whereas the sales of smart cars will increase by 6 times, up to 152 million by 2020.
Gartner in their turn provides even more positive data – ¼ of a billion of connected cars will be out on the roads by 2020.
For a closer look and better understanding of connected cars market development it makes sense to divide the IoT technologies into 6 categories:
Driver assistance develops very quickly and covers technologies improving or replacing car performance. There are systems out there built to assist partial or full automatic driving in busy traffic, on highways and in parking. Motorway technology (allowing driving a car at high speeds when vehicles automatically keep a fixed distance one from another) will cause revenue increase up to 40% yearly with China becoming the biggest market in this area.
Safety technologies cover driver’s comfort and their ability and fitness to operate a vehicle. Such systems have been designed to detect the level of driver’s fatigue, automatically adjust to environment alerting the driver and assist them medically. By 2020 it is expected for this segment to reach $41 billion in sales with 28% of yearly growth. The US is expected to remain the largest market in this segment.
Entertainment (infotainment) for drivers and passengers includes smartphones interfaces, WLAN hot spot, music, video, Internet and social media, as well as advanced mobile office functions. The largest player on the international arena in 2015 is China and it will remain that way all through 2020.
Well-being functions serve to warn a driver of outside risks (protection against collision) and internal responses of the car to the risks (emergency functions). Systems monitoring driver’s vital functions and warning of related problems will soon be available. This attractive area for automakers is rapidly growing, and it is expected to increase by 35% between 2015 and 2020 with the US remaining the major market leader.
Mobility management helps drivers to reach their destination promptly, safely and cost-efficiently, providing the latest traffic info, assistance in parking and optimizing consumption of fuel. In 2015, this technology has significantly developed and has already started slowing down presumably reaching 9% by 2020.
Vehicle management enables operating costs reduction and optimizes the ease of use for a driver through vehicle condition and service reminders, remote driving and usage data transfer. Germany alone has about 1.6 million company fleets with 4 million cars overall. It is forecasted that by 2020 this segment will increase by 3 times in global sales.
Nonetheless, whatever the numbers are, connected cars market is definitely about to blossom big time and 2015 has already demonstrated it.