Real-time traffic info will become basic feature, iSuppli predicts
MUNICH, Germany — In times when traffic jams are ubiquitous, it does not suffice to have a navigation system in the car. Only in connection with a real-time traffic information service, navigation systems can prove their benefit. For this reason, the market for these services will explode, reckons iSuppli.
Real-time traffic information will be a must-have feature in automotive navigation systems, says Phil Magney, vice president automotive research for market researcher iSuppli. He expects the global revenues from service subscriptions to rise by a factor of 18 in the time frame to 2014. To be precise: While in 2008 the total market volume was $268 million, iSuppli expects this volume to hit the $4.7 billion mark in 2014.
"In an automotive electronics market characterized by commoditization and rapidly declining price points, traffic data represents critical and time-sensitive information that can make the difference between a nice-to-have and must-have navigation device," Magney explains.
According to his study, Real-time traffic information has the potential to be a key differentiator. Device makers and service provider can and likely will use the feature to distinguish themselves from their competitors. The window of opportunity for profitable traffic information services however will be wide open only for a limited time period, Magney warns. "Within a few years, this service will become so common that it will be an essential feature."
The methods to collect real-time traffic data are developing rapidly, the study says. New methods to gather these data include predictive modeling based on historical trends, and probe car data collection. The latter method, developed in Japan has also been deployed in Europe and the US. In this method, the subscribers' navigation system feeds back data on position and speed to the provider. The data from a large quantity of users enable providers to generate a rather exact traffic situation image.
Today however, one-way connection via FM makes represents by far the most widespread communications channel; it makes up some 83 percent of the total available market.
The distribution of data via two-way wireless connection still represents a small segment of the market: in 2008, worldwide there were some 3 million users, estimates iSuppli. This segment however will expose strong growth, driven by off-board navigation and on-board navigation via smart phones and similar mobile devices. In 2014, this segment will reach 128 million users, which represents a compound annual growth rate of 86 percent. "In the future, customers will increasingly expect their device to tell them more than how to get from point A to point B," predicts Magney.
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