(July 30, 2014) NEW YORK — The market for connected cars is growing rapidly, with an expected compound annual growth rate (CAGR) of 41.2% between 2013 and 2018, and mobile network operators (MNOs) are jumping on the opportunity for new revenue streams and enhancement of customer loyalty that comes with this growth, according to the latest report from Heavy Reading Inside.

MNOs Hold the Keys to Success for Connected Cars examines the connected car market, analyzing how mobile network operators are likely to become involved in the connected car arena, as well as areas of growth expected in the market over the next two years. It discusses drivers and challenges in the industry and includes a comparative analysis of solutions available. Finally, it examines the geographic landscape of the market and details trends that are likely to occur in the industry over the next 18-24 months.

"Vehicle-to-vehicle (V2V) communications is closer to becoming a reality than many people realize," says Denise Culver, research analyst with Heavy Reading Insider and author of the report.

"In many cases, traffic and safety boards, as well as other governmental agencies, have recognized that enabling cars to 'talk' to one another, road signs and other pieces of the transportation ecosystem can decrease the number of traffic accidents and, thus, fatalities on roadways each year."

The total shipments of connected cars is expected to grow an estimated 41.2 percent between 2013 and 2018, Culver says. "This will account for more than 50 percent of total global car shipments by 2018," she continues. "Various connectivity solutions, such as LTE, 3G, Wi-Fi and HSPA, are being bundled with OEM manufactured cars, apart from the existing traditional connectivity such as Bluetooth and 2G."

Key findings of MNOs Hold the Keys to Success for Connected Cars include the following:

    • The ability to allow consumers to tether their existing smartphones to the car will be the biggest driver over the next 18 months.
    • Significant M&A activity is expected, as telematics software makers, app developers and systems providers will be snapped up.
    • The transfer of data from the vehicle to the network will very likely happen through mobile technology, via either traditional mobile phones and tablets or hybrid in-vehicle systems.
    • Flexible and cost-effective data plans are needed to deliver connected services, and will need to scale with customers' machine data production.
    • The combination of new products, available lines of credit and improving economic growth will continue to drive connectivity in cars in North America.