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2014-09-04
Shipments of OEM embedded telematics systems will grow to 54.5 million worldwide in 2020
According to a new research report by Berg Insight, shipments of OEM embedded telematics systems worldwide are forecasted to grow from 8.4 million units in 2013 at a compound annual growth rate (CAGR) of 30.6 percent to reach 54.5 million units in 2020. Moreover, Berg Insight forecasts that the number of cars sold worldwide equipped with head-units featuring handset-based telematics capabilities will grow from 7.0 million in 2013 to 68.5 million in 2020. Telematics is a broad term that may be applied to a wide range of connected services in the automotive industry. Berg Insight’s definition of a car telematics system is an automatic system designed for passenger cars that incorporates some form of cellular communication. Automotive manufacturers can choose between several connectivity options when creating connected car services, which are not mutually exclusive. The main options today are embedded telematics devices, tethered handsets and integrated smartphones. Car manufacturers often use a combination of these options to support different customer needs and keep pace with the rapid development of mobile technology. Connected car services are gaining momentum globally after many years of development and gradual rollout. The drivers behind adoption of telematics systems among car manufacturers are both commercial and regulatory. Safety regulations that aim to make automatic emergency calls with vehicle location mandatory in all new cars are for instance being adopted in the EU and Russia with the eCall and ERA-GLONASS initiatives respectively. In other markets such as North America and Japan, commercial services have driven adoption of OEM telematics services that have evolved from being a differentiator to a mainstream feature offered by most car brands. Several categories of connected car services are now offered by leading car manufacturers. Examples include emergency call and roadside assistance, stolen vehicle tracking (SVT), vehicle diagnostics, connected navigation and infotainment, as well as convenience applications. Convenience applications for instance include remote control of vehicle functions such as door lock/unlock and air conditioning, vehicle status and finding the last parking position. Several other applications also exist, for instance usage-based insurance, leasing and rental fleet management, as well as electronic toll collection and road charging. Most telematics services can be supported by any connectivity type, although embedded connectivity is the most suitable option for applications including emergency call, SVT and convenience applications. There are many business rationales for car telematics, ranging from monetary savings for the car owner in the case of SVT and usage-based insurance, to product differentiation, improved customer relationship management, potentially lower costs of product recalls and soft value creation for the car OEM. Berg Insight forecasts that the number of telematics service subscribers using embedded systems will grow at a compound annual growth rate of 38.1 percent from 16.6 million subscribers in 2013 to 158.9 million subscribers in 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 cars”, said André Malm, Senior Analyst, Berg Insight. He adds that 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”. However, car brands are now launching cloud-based telematics services that facilitate customisation of service packages to better meet the needs of individual customers. Several car manufacturers have app stores that enable car owners to download apps directly to the infotainment system of the car. “New split-billing solutions being introduced by telecom operators also increase flexibility in business models for car manufacturers offering connected car services to their customers”, 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.

2014-08-22
Berg Insight says 3G/4G technologies will dominate cellular M2M communications by 2018
According to a new research report from the analyst firm Berg Insight, the global cellular M2M market has entered a period of transition from 2G to 3G/4G technologies. The share of cellular M2M devices connected to HSPA/LTE networks is projected to more than double from less than 20 percent at the end of 2014 to more than 50 percent by 2018. When it comes to device shipments, 3G/4G is expected to overtake 2G already in 2017. HSPA will be the largest technology in an intermittent period until the current price gap to LTE has been closed. The first phase in the adoption of 3G for M2M applications has mainly been driven by the phase out of 2G services in some countries. In the US, AT&T’s plans to shut down its 2G network have profoundly changed the M2M hardware market. As a result Berg Insight expects that a majority of the M2M devices shipped in North America will use 3G technology already in 2014. Europe has a slower rate of adoption as the time horizons for continued operation of 2G networks generally extend well beyond 2020 in most countries. In Asia-Pacific, 3G is already the standard technology platform in advanced markets such as Japan. The main catalyst for the anticipated acceleration of 3G/4G adoption over the next years will be the growing data requirements of many M2M applications. "Firstly, there is a general trend towards higher data consumption for most traditional M2M applications", said Tobias Ryberg, Senior Analyst, Berg Insight and author of the report. "Secondly, the automotive industry is getting very serious about realizing the vision of connected cars, which require mobile broadband connectivity. Early adopters such as GM and Audi recently introduced their first car models with embedded LTE in the US".

2014-08-19
Berg Insight to participate in the Super Mobility Week
Berg Insight will take part in the 2014 event in Las Vegas that is held September 9-11. There will be 3 representatives from Berg Insight at the event. Please contact us if you would like to take the opportunity to meet with us there. Click on the link below for more information about the event.
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2014-08-18
Connected management mega-trend drives the global wireless M2M market
According to a new research report from the analyst firm Berg Insight, the global number of mobile network connections used for wireless machine-to-machine (M2M) communication will increase by 21 percent in 2014 to reach 213.9 million at the year-end. East Asia, Western Europe and North America are the main regional markets, accounting for around 75 percent of the installed base. In the next five years, the global number of wireless M2M connections is forecasted to grow at a compound annual growth rate (CAGR) of 22.9 percent to reach 599.7 million in 2019. The mega-trend driving technology adoption in Europe and North America is what Berg Insight calls the concept of connected management. “The IT-revolution has created new opportunities to collect and analyse data for the purpose of managing objects and behaviours”, said Tobias Ryberg, Senior Analyst, Berg Insight. “Connected management is based on the connection of remote devices to applications for the purpose of managing assets & products, costs & revenues, relationships & behaviour etcetera”. Connected cars is a typical area where connected management is applied, as the automobile manufacturers develop solutions enabling themselves and the driver to manage the vehicle and the driving experience through a range of applications. Connected fleets is the underlying trend for most other vehicle-based applications that enable fleet operators and external stakeholders such as governments, insurance companies and financial service providers to manage vehicles, operations, risks and revenues associated to the vehicle such as taxes and insurance premiums. The connected enterprise is emerging as a blueprint for corporate management, based on the vision that every asset and product should be directly linked to the enterprise network, feeding data in real-time to relevant IT-systems.

2014-08-01
The installed base of active cargo tracking units will reach 4.1 million by 2018
According to a new research report from the analyst firm Berg Insight, the number of active tracking devices deployed in cargo loading units including trailers, swap bodies, intermodal containers, air cargo containers, cargo boxes and pallets reached 1.5 million worldwide in Q4-2013. Growing at a compound annual growth rate (CAGR) of 22.3 percent, this number is expected to reach 4.1 million by 2018. The North American trailer telematics market accounts for 60 percent of the total installed base in this sector today. The top providers in the North American trailer telematics market including Omnitracs, Skybitz, ID Systems, Orbcomm and Spireon together have an installed base of well over 600,000 active units today. In Europe, Idem Telematics, Mecomo, Schmitz Cargobull and Novacom Europe are major trailer telematics solution providers with over 20,000 active units each. Orbcomm, Envotech, Zenatech, PearTrack Systems, Honeywell and Savi Technology are major providers of intermodal container tracking solutions. OnAsset Intelligence and Moog are examples of actors which offer specialised solutions for real-time tracking of air freight cargo. Technology advancements make it economically feasible to track ever smaller logistics units and in the future it will be commonplace to track not only trailers and shipping containers but also individual pallets and cargo boxes. “Logistics and transportation companies need to be ready to take advantage of the increasing amount of data generated by cargo tracking solutions in order to effectively improve productivity and customer service levels” said Johan Svanberg, Senior Analyst, Berg Insight. Regulations related to cargo transport have furthermore a significant impact on the market environment. Numerous countries worldwide have introduced regulations and programs related to cargo security, tax collection and handling of special cargo such as food, dangerous goods and animals. “Smart tracking solutions can help stakeholders to efficiently comply with this myriad of regulations and programs” noted Mr. Svanberg.

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