Omdia forecasts that connected cars on the road will grow 18% in 2023. Companies including the likes of Google and Apple are positioning themselves to capture and develop the potential revenue opportunities from this market over the coming decade.
Omdia’s research further reveals that over 900 million connected cars will be on the road at the start of the next decade, eclipsing the installed base of popular consumer devices such as payTV set-top boxes and tablets. These vehicles will include a plethora of screens in the front and rear of the cabin which are growing each year to enable video and gaming services.
As seen with their approach across other product categories, platform owners Google and Apple are looking to become key gatekeepers within the car environment with their respective in-car software solutions.
Amazon is bringing its immensely popular Fire TV entertainment solution in-vehicles for media consumption too. In response, Car OEMs are developing their own software solutions to keep drivers within their own ecosystems, allowing them to retain control of the whole consumer experience across both the vehicle and the software.
Over the next few years, all new car sales will include connectivity as a standard feature enabling services and subscriptions in the car cabin as the industry pivots its focus to repeated revenues in a new business model. Monetization strategies are already being put in place through add-on subscriptions ranging from cloud gaming services to heated seats and even the cars themselves.
Omdia principal analyst David Tett noted the ongoing uncertainty as to consumers’ willingness to pay extra for in-car services particularly as they correlate it with value for money given average journeys range between 15-30 minutes.
"Although it has been difficult to monetize, native car-based services are expected to provide such opportunities over the coming years. This potential has meant many stakeholders consider automotive as a key area for future growth," he concluded.
