Saturday, April 15, 2017

In Addition to Connectivity, What Other New Revenue Streams Might Connected Car Create?

It might be obvious that if internet of things apps and services become a big set of businesses, that connectivity services must underpin those services. What remains unclear is the precise nature of those connections. In many settings, Wi-Fi or some other connection protocol might be used, which will indirectly affect the market for internet access services and revenues.

In the connected car market, which assumes mobility, mobile networks are almost certain to be a connection of choice. Just how big a choice remains a matter of some debate.

One big divide is likely going to be between “outdoor and ambient” connections versus “indoor ambient or stationary” deployments, where Wi-Fi and other short-range connectivity solutions will work.

But though connectivity will undoubtedly be among the new revenue streams, business-to-business applications and services are among the more-promising new revenue streams. For example, insurance companies are among the new users of connected car information, and the issue is which entities will package up that data and make it consumable.

The survey, commissioned by the GSMA and sponsored by Interdigital, Gemalto, Cisco, Volkswagen and F5 of nearly 1,000 respondents did not believe bandwidth would be an issue, even as soon as 2020, when meaningful deployment was expected. Fully 36 percent of respondents said connected cars were already available.

About half the respondents to a survey sponsored by Interdigital suggested Wi-Fi and existing mobile networks  would be sufficient for the next five years.

Half thought higher-bandwidth alternatives such as 5G, satellite links or low power wireless access (LPWA) solutions would be needed to support some IoT apps.

In any case, respondents believed incremental revenue would be earned by average revenue per user (ARPU) from end users (48 percent), B2B revenue from vehicle manufacturers (49 percent) and B2B revenue from automotive industry players (48.9 percent).

Some nine percent said they would be available within the next year and 14 percent estimated connected cars would be available within the next two years (before 2018).

Network technology itself was not seen as a significant issue, with just 11.6 percent of respondents identifying insufficient bandwidth or throughput as an issue for connected cars.

However, 36.6 percent identified patchy network coverage as the main connectivity deficiency that has potential to hold the market back. Security, on the other hand, was viewed as a significant issue.

About 60 percent of respondents agreed that security would be an issue.

source: Interdigital

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