Worldwide revenue generated by real-time traffic services delivered to telematics and navigation devices will soar to $4.7 billion in 2014, up from just $268 million in 2008. The number of global subscribers for these services will rise tenfold during the same period, reaching 184.9 million in 2014, up from 18.5 million in 2008.
The figure presents iSuppli’s forecast of global real-time traffic service revenue and subscribers.
iSuppli: Global Real-Time Traffic Service Revenue and Subscriber Forecast (Thousands of Subscribers and Millions of US Dollars)
Source: iSuppli, July 2009“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 a must-have navigation device,” said Phil Magney, vice president, automotive research for iSuppli.
“Real-time traffic has the potential to be a key differentiator and major opportunity for device makers and service providers to distinguish themselves from their competitors. However, within a few years, such traffic information will become so common that it will be an essential feature on navigation and telematics solutions, ” he added.
Traffic services improve
Real-time traffic services provide up-to-date information to drivers about traffic jams, incidents, projected delays and alternate routes.
The quality of real-time traffic information is getting better every day. Data analysis technologies are being applied to traffic data that involve predictive modeling based on historical trends.
There also are new ways to collect traffic information that help improve the quality of the data.
One method, called probe car data collection, involves a device periodically transmitting its position to a central server. Probe car traffic collection was pioneered in Japan, but since has been deployed in other regions, including the United States and Europe.
Probe car data represents a breakthrough for the collection of traffic conditions because it is conducted in real time using customers’ navigation devices. Any device—whether it is a telematics system or portable device—is capable of acting as a probe as long as it has two-way connectivity.
Distributing traffic with broadcast wireless
The distribution of traffic information to navigation devices requires one-way broadcast technologies or two-way connectivity via cellular modems.
Broadcast via FM or other wireless signals, the traditional method of delivering such services, accounts for more than 83 percent of the total market for delivery of traffic information.
Broadcast traffic subscribers are forecasted to increase to nearly 57 million in 2014, up from 15.5 million in 2008, rising at a Compound Annual Growth Rate (CAGR) of 24 percent. Japan in 2008 accounted for the largest share of the broadcast traffic segment—about 8.8 million—representing slightly more than half the global users. Western Europe accounted for 3.7 million of the broadcast subscribers, or 23 percent.
During the next five years, Japan’s share will decline as the United States, China and other regions use more broadcast traffic information.
Distributing traffic with two-way wireless
The distribution of traffic data on devices with two-way wireless (i.e., cellular) represents a relatively small segment of the market, with 3 million subscribers estimated for 2008.
Owing to the rapid growth of off-board navigation and on-board navigation for smartphones and mobile phones, two-way traffic is expected to grow strongly and will reach nearly 128 million users in 2014, representing a CAGR of more than 86 percent from 2008.
“The biggest opportunity for navigation-related content—including real-time traffic—is through two-way distribution to navigation systems and smart phones,” Magney said.
“To compete with free or low-cost broadcast traffic information, two-way solutions offer more capability, such as the ability to offer multiple routing options based on favorite routes or common destinations. Estimated time of arrival is often presented based on historical traffic patterns, road construction, or incidents. In the near future, customers will increasingly expect their device to tell them more than how to get from point A to point B.”
Source: iSuppli, July 2009
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