Worldwide shipments of connected vehicles, which includes options for embedded and aftermarket cellular connectivity, will reach 51,1-million units in 2019, an increase of 45,4% over 2018.
In its inaugural connected vehicle forecast, International Data Corporation (IDC) estimates that, by 2023, worldwide shipments will reach 76,3-million units with a five-year compound annual growth rate of 16,8%.
IDC defines a connected vehicle as a light-duty vehicle or truck that contains a dedicated cellular network wireless wide area connection that interfaces with the vehicle data (for example, gateways, software or sensors).
Newer, recent model year vehicles are shipped with an embedded, factory-installed connected vehicle system. Older vehicles typically connect via an aftermarket device, which is a self-contained hardware and software unit that is installed into a vehicle’s OBDII port.
The commitment of mass market automotive brands to make embedded cellular standard equipment in key markets was a major development in the arrival of connected vehicles.
By 2023, IDC predicts that nearly 70% of worldwide new light-duty vehicles and trucks will be shipped with embedded connectivity. Likewise, IDC expects that nearly 90% of new vehicles in the US will be shipped with embedded connectivity by 2023.
The sustained growth of the connected vehicles market is being driven by a multitude of factors, including consumer demand for a more immersive vehicle experience, the ability of auto manufacturers to better utilize connected vehicles for cost avoidance and revenue generation, evolving government regulations, and mobile network operator investments in new connections and services.
“The automotive ecosystem is positioning the vehicle as the next, emerging digital platform,” says Matt Arcaro, research manager: next-generation automotive research at IDC. “Deploying embedded or aftermarket connectivity at scale will be key to unlocking its potential.”