KALEIDO INTELLIGENCE EXPECTS 848 MILLION TELEMATICS AND INFOTAINMENT CELLULAR SUBSCRIPTIONS TO BE ACTIVE BY 2028
London, 26th April 2023 –A new report from Kaleido Intelligence, a leading connectivity market intelligence and consulting firm, has found that vehicle telematics and infotainment systems will account for nearly 850 million subscriptions by 2028. This represents strong growth from the 287 million active at the end of 2022.
Telematics will be the largest sector for growth here, with a CAGR of 29.1% between 2023 and 2028. Meanwhile, this will be outpaced by data growth across the board, as in-vehicle connectivity of many types begins to transmit video footage for processing, either at a central location or in the vehicle itself.
Telematics Growth is Strong, with Data Growth from Video Adoption
The new report, Cellular IoT Connectivity Series: Transport & Logistics Industry Opportunities & Forecasts, anticipates that telematics connections will reach 573 million subscriptions by 2028, as vehicles become ever more connected.
Telematics will typically have a longer lifecycle than infotainment, but typically far lower data rates, as these systems will mostly relay data rather than rich media. This is particularly the case for consumer telematics, which will often only relay positional data on a regular basis.
Despite this, we expect the average data rate per connection to grow by 47% between 2023 and 2028, as the use of video telematics becomes more common in road haulage fleets. This will double telematics connectivity revenue over the same period.
“Telematics is the core of cellular logistics”, remarked research author James Moar. “Many other features do bring strong benefits, but need to make a clear case for their value, as there is often strong competition from existing technology solutions. End users need to be shown how the latest cellular technologies can contribute more features to their experience if these markets are to accelerate.”
Infotainment does not bring Engagement
In the infotainment space Kaleido expects high levels of churn to continue, as users abandon the platforms once free trial periods expire. As a result, infotainment subscriptions will remain under 200 million until 2027, and much of the $30 billion in infotainment connectivity revenue realised in 2028 will be borne by automotive OEMs, as many customers terminate the service once free trial periods end.
In China, we have already seen a high level of lifetime infotainment connections offered for free, or added to the cost of the vehicle at point of purchase. This is already a model used for emergency services connectivity (eg the EU’s eCall directive), and so Kaleido anticipates some automakers in Europe and North America bringing lifetime connectivity as a vehicle add-on to differentiate from the competition, in response to market pressure.
Connected Cargo Hampered by Network Shutdowns
The report notes that although direct tracking of cargo by cellular means is becoming more common, connections will grow by less than 9% CAGR throughout the forecast period. Kaleido’s report notes several trends influencing this, primary among them the national 2G and 3G shutdowns in several countries. This means that logistics firms and suppliers will need to adopt LTE-based tracking, and the cost of replacement of older equipment will be prohibitive in many cases. As a result, we expect less than 40 million cargo-tracking cellular connections to be in place by 2028.
About Kaleido Intelligence
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