Methodology

Connected Cars and Telematics Insurance:

• A shipment forecast model based on known historical growth rates and assumed future growth rates.
• A detailed pricing model for calculating current and future revenue.
• The refinement of both the shipment and the pricing models based on input from major players during the interview phase and at conferences and seminars. Original Equipment Manufacturer (OEM) configurators and price lists provide critical information on consumer-facing prices, and the general availability of consumer telematics and connected infotainment features on different vehicle classes. This is relevant for both hardware and service pricing.
• A detailed assessment of the drivers and barriers of each application and market segment to assess future growth potential.
• An accurate assessment of the impact of major partnerships or government projects, such as eCall and Dedicated Short-Range Communications (DSRC).
• The identification of new telematics applications, such as Customer Relationship Management (CRM).
• The application of sanity checks by comparing applications and segments with similar offerings in the past.
• The application of macroeconomic factors to the growth model.
• The application of data collected via interviews with more than 15 stakeholders, including connected car platform, User-Based Insurance (UBI), and Vehicle-to-Everything (V2X) vendors.

OEM, Tier One, and SoC Suppliers’ Connected Infotainment Shipments and Market Share:

• Supplier relationship information:
  • Primary research, consisting of interviews with System-on-Chip (SoC) suppliers
  • Secondary research, including in-depth analysis of publicly available information, including legal documents, latest industry developments, annual reports, and information obtained from ABI Research’s existing knowledge base as part of the Smart Mobility & Automotive Research Service
• Market Share:
  • The market share of carmakers, Tier Ones, and SoC suppliers was built based on individual carmakers’ vehicle sales between 2017 and 2027, split by region and infotainment system.
  • Carmaker sales are routinely published in the public domain by both OEMs and national motor manufacturer associations. Monthly sales figures in key countries are used to extrapolate the likely sales performance by the end of the current year, leveraging Year-to-Date (YTD) figures to disentangle for seasonal variation.
• To determine infotainment system shipments, ABI Research performed a comprehensive analysis of:
  • The date on which new infotainment systems generations were released (e.g., Starlink Gen 3 and Starlink Gen 4)
  • The different versions of each infotainment system generation (e.g., Starlink Base, Base +, Mid, High)
  • Vehicle models and trims (e.g., basic, medium, and premium trim) featuring the different infotainment system generations and versions
  • Estimations of when new generations would completely replace older generations, if at all, based on historical data
  • Shipments were allocated to the associated player based on the established carmaker-Tier One-SoC supplier relationship

1.Definitions 

Connected Car:

• OEM Telematics Systems: Systems integrated into new cars as factory-installed equipment either as a standard feature or as a paid option. OEM telematics include both fully embedded and hybrid solutions.
• OEM, Embedded: Fully embedded OEM systems replicate all positioning and communications hardware for optimized integration into the car environment. The systems comply with all automotive requirements, resulting in a reliable and robust system for safety and security applications, such as emergency call services for which hardware is required to survive crashes.
• OEM, Embedded Subscription Revenue: OEMs now offer telematics and connected infotainment services (e.g., media streaming, navigation, Wi-Fi hotspots) free of charge for extended periods. In China, OEMs, such as GM SAIC and NIO, even offer lifetime free connectivity. Based on this new trend, active free-of-charge connections that do not provide earnings to the OEMs are excluded from the subscription revenue model. Paid subscriptions are calculated as a percentage of active subscriptions renewed after the free trial period. A subscription Average Selling Price (ASP) is applied to those subscriptions as a means to calculate the subscription revenue.
• OEM, Tethered: Tethered OEM systems are based on two components: mobile connected devices, such as a handset, and music players that the customer already owns, combined with existing third-party services, such as E911 in the United States. A factory-installed system allows connecting to mobile devices via Bluetooth or Wi-Fi, as well as User Interface (UI) features, such as speech technology. Typical examples include Ford Sync, and systems reliant on smartphone integration protocols, such as Android Auto or Apple CarPlay. In this category, the brought-in device provides critical connectivity, and is also often leveraged to provide processing/sensor input to enable connected car services.
• Aftermarket Connected Car Solutions: Aftermarket systems are purchased by owners of existing vehicles and installed in existing cars by dealers or specialized vendors. They are typically offered by specialized companies like LoJack, Autonet, and MetaSystem, but in some cases, are also available from OEM Telecommunications Service Providers (TSPs), such as Verizon, and directly from OEMs. Alternatively, consumers can opt for more portable solutions with easier installation that either integrate with the vehicle via the On-Board Diagnostic (OBD) port or rely on their own sensors to deliver connected services.
• Aftermarket, Embedded: Dealers or specialized vendors install embedded aftermarket connected car systems that are often primarily designed for specific consumer telematics services, such as Stolen Vehicle Tracking (SVT), recovery, and Pay As You Drive (PAYD) insurance. Standardized DIN dimensions also enable the widespread installation of aftermarket connected infotainment head units. LoJack is a typical example whereby the aftermarket hardware is installed as a covert system to prevent disabling.
• Aftermarket, Portable: Portable aftermarket solutions are portable systems, such as connected Portable Navigation Devices (PNDs), OBD dongles, and dedicated Global Positioning System (GPS) tracking units with integrated GPS receivers and cellular modules that do not require specialist installation.
• Aftermarket, Smartphone Application: These aftermarket solutions are based on software applications running on smartphones with embedded GPS receivers and accelerometer sensors combined with a web-based component for tracking, monitoring, and communication. Typical services include geofencing, position tracking, theft detection, UBI, speed monitoring and alerts, and emergency braking or crash detection.
• OEM Embedded Consumer Telematics Subscriptions: Active embedded connections offering basic telematics-only services.
• OEM Embedded Infotainment Subscriptions: Active embedded connections offering more advanced services, including infotainment.
• Connected Car Paid Subscriptions: Infotainment or telematics subscriptions that generate revenue for the OEM.
• Connected Car Free Subscriptions: Infotainment or telematics subscriptions on a free trial or free for life connectivity. While these subscriptions do not generate revenue for OEMs, OEMs have to pay Mobile Network Operators (MNOs) for provisioning them.
• Market Value: The sum of connected car hardware revenue and subscription revenue during the calendar year.

Telematics Insurance:

• Embedded: OEM-embedded devices.
• Black Box: Aftermarket black box.
• OBD: Aftermarket device that connects to the OBD-II port of cars in order to capture driving behavior data.
• Bluetooth (Windshield, 12 Volt (V)): Bluetooth hardware includes windshield beacons and 12-V adapters.
• Smartphone: Smartphone applications designed to collect driving data.
• Active UBI Connections: Active UBI connections include cellular connections and other form factors, such as smartphone-based policies.