Connected cars: Who's making money today, and how?

Connected cars are one of the fastest growing segments of the broader machine-to-machine (M2M) and Internet of Things (IoT) sectors.

Network operators and in-car telematics hardware producers are increasingly cashing in on a market that SNS Research forecasts could generate revenues of $40 billion (€36.2 billion) by 2020.

While we know that those revenues will be generated by services including infotainment, automatic crash notifications and -- in the long run -- autonomous driving, very little attention has been paid to which companies are actually making money from connected cars today.

On the network operator side, Vodafone, Deutsche Telekom and Orange Business Services were identified as today's main players by analysts at IHS Automotive and SNS Research.

Matt Key, Vodafone's M2M commercial director, said connected car revenues are currently growing at between 25 per cent and 30 per cent each year, making the sector the largest in Vodafone's M2M division.

Deutsche Telekom, meanwhile, is already providing connectivity services to over a million connected cars globally, explained Joerg Sasse, head of sales at the digital division of Deutsche Telekom's T-Systems' Connected Car business unit.

The picture is similar at Orange Business Services. Stéphane Petti, head of business development for M2M, revealed the operator today has connected car contracts with around 80 car makers globally, including Renault and several other tier-1 manufacturers.

Telematics hardware makers are the other key beneficiaries of the modern connected car.

Stephan Kraus, a spokesman for Bosch, said the company's automotive customers are increasingly seeking to include connectivity features in the infotainment systems the company supplies -- a view echoed by Peiker spokesman Falk Issmer, who noted that connected cars must provide the same user experience as drivers enjoy in the home or on their smartphone.

Connectivity is only one part of the revenue generating pie. IHS Automotive manager Anna Buettner explained that carriers and auto makers have already sought to monetise the connected car segment through consumer data fees. While Buettner noted that several models currently exist to monetise that 'mobile' data, she said that new approaches must be conceived in future to truly guarantee the success of the connected car sector by not placing the burden of cost fully on consumers' shoulders.

Find out more about those future monetisation options, the wireless technologies currently being employed, and the breadth of communications service providers' involvement in the connected car segment in our special report, here -- MJC

Suggested Articles

Wireless operators can provide 5G services with spectrum bands both above and below 6 GHz—but that doesn't mean that all countries will let them.

Here are the stories we’re tracking today.

The 5G Mobile Network Architecture research project will implement two 5G use cases in real-world test beds.