Telefónica: 90% global connected car penetration by 2020

Operator Telefónica has published a report on attitudes and forecast for the connected car industry. It forecasted the majority of cars the number of vehicles with built-in connectivity will increase from 10% of the overall market in 2013 to 90% by 2020, and that the vast majority of car consumers expect a connected experience in the car of the future.

Outside of the headline forecast, the main substance of the report is a YouGov survey, commissioned by Telefónica, of 5,000 consumers across five countries: USA, UK, Brazil, Germany and Spain. While Telefónica has a clear interest in promoting adoption of the connected car, there’s no reason not to take the findings at face value.

The survey found that the majority of consumers will consider connected features, including inbuilt connectivity, but also the ability to plug in a smartphone, to be a “key part” of their next car purchase. Furthermore, 80% of those surveyed said they expect the connected car of the (undefined) future to provide the same connected experience they already get from domestic broadband and from mobile broadband. In other words, they want a modem and wifi hotspot embedded in their future car.

Of course people – especially drivers, are not going to use the same Internet services in the car as they would at home, at work, or when walking. Of the possible services, safety and diagnostics were the most popular, with 73% of those surveyed saying they would expect to have those in a connected car and would ideally like to be able to check on the state of their cars on their mobile devices before setting off on a long journey. There was also interest in how the connected car might enable usage-based insurance and, of course, navigation and traffic information.

“Many consumers currently think of connected car services in terms infotainment and wifi, but this changes when they are made aware of the variety of options that the technology can offer,” said Pavan Mathew, Global Head of Connected Car at Telefónica. “Safety and diagnostics appear to be the most attractive features to drivers, illustrating just how important factors such as road safety and vehicle maintenance are in consumer purchasing decisions.

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“We can expect to see a gradual creep of connectivity into vehicles over the next few years but there won’t be an explosion over the next 12 months. The reason for this lies in the complexity of the challenges that connectivity is trying to address. While OEMs still have a way to go before they break out of their traditional role as a manufacturer and become a full, connected service provider, they certainly have a strong, trusted base to build from.”

As the mobile device market matures, all stakeholders from telcos, to device vendors to service providers are looking for the next big mobile market. While the connected home and the mobile wallet offer arguably greater long-term potential, the connected car may be closer to commercial reality. The first companies to crack the connectivity, platform and service challenges in this market could be onto a winner.

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