The Rapid Evolution of the Connected Car

In the past 20 years, connectivity has become a defining feature for vehicle performance, function, and experience.

Rapid Evolution of the Connected Car

The automotive industry has seen monumental changes in recent years as the Internet of Things (IoT) has infiltrated nearly every function of cars, from in-vehicle entertainment systems to performance monitoring and drive features. The most visible introduction to this transformative technology came with General Motors’ OnStar feature in 1996. Since then, connectivity has accelerated at a rapid pace.

While this industry is still very much in its infancy, a variety of technological advances have emerged in a short period of time, including innovations in advanced driver assistance systems (ADAS), safety technologies, and in-car entertainment that offers consumers a better, more connected driving experience. Automotive manufacturers, OEMs, and tech startups have spent decades focusing on connected car R&D. Now, these technologies are increasingly being designed into consumer products.

According to the 2017 Strategy & Digital Auto Report by PwC, 65 million connected cars will be on the road by 2025, and the global connected car market will reach a value of $292 billion by 2025. This is massive growth considering that it was only a $34 billion industry in 2015. While there are opportunities across the globe in this industry, the United States has proven to be the top nation in terms of revenue thus far (projected to be at 11,044 million in 2018), with Europe and China coming in next. Even though the global connected car market penetration is only at 8% in 2018, it is expected to reach 19.3% by 2021. By 2020, a projected quarter of a billion connected cars will be on the road.

In-Vehicle Entertainment

For many drivers, in-vehicle entertainment systems are the most visible form of connectivity in their cars. Voice command systems (e.g., Apple’s Siri or Amazon’s Alexa) that connect drivers to entertainment options, navigation, and climate controls are the first wave of functions drivers may utilize. Integration with software and media companies have helped the global in-car entertainment hardware market expand rapidly, with an anticipated value of $36 billion by 2021, compared to $20 billion in 2016.

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