The installed base of fleet management systems will reach 7.1 million in Europe by 2018
According to a new research report from the analyst firm Berg Insight, the number of active fleet management systems deployed in commercial vehicle fleets in Europe was 3.65 million in Q4-2013. Growing at a compound annual growth rate (CAGR) of 14.2 percent, this number is expected to reach 7.10 million by 2018. A group of international aftermarket solution providers have emerged as the leaders on the European fleet management market. Masternaut reported an active installed base of close to 350,000 units in July 2014, mainly in France and the UK. TomTom Telematics was the fastest growing vendor also in 2014 and has now surpassed 400,000 subscribers in August 2014. The two companies today share the number one spot in terms of active installed base in Europe. Digicore has also joined the exclusive group of fleet management providers in Europe having more than 100,000 active devices in the field. Transics is number one in the heavy trucks segment with an estimated 85,000 active units installed. A major trend in the past three years has been the announcements of standard line fitment of fleet management solutions among the HCV manufacturers. Scania, Daimler, Volvo and MAN now experience fast growth of telematics subscribers thanks to these initiatives. FleetBoard by Daimler, Dynafleet by Volvo and Scania Fleet Management are the most sold systems with cumulative shipments of 150,000 units, 135,000 units and 100,000 units respectively as of Q4-2013. A recent trend is that LCV manufacturers increasingly work together with aftermarket players to offer fleet management solutions. PSA Peugeot Citroën has for instance launched a new fleet management service on the French market in partnership with Orange Business Services in April 2014. Ford and Telogis recently partnered to deliver fleet management solutions to Ford customers in Europe. Teletrac has moreover for a long time collaborated with OEMs on the UK market, including Citroën and Mercedes Benz. M&A activities on this market continued with full force in 2014. “Seven major mergers and acquisitions have so far taken place this year among the vendors of fleet management systems in Europe”, said Johan Fagerberg, Senior Analyst, Berg Insight. At the beginning of 2014, Qualcomm finally divested also the majority of the European arm of its fleet business to Astrata Group, a fleet management company headquartered in Singapore. Later in February, WABCO acquired Transics and the transaction valued the company at about € 100 million. Lysanda acquired UK-based TRACKER Network in February and plans to establish Tantalum Corporation from the combined business. In April, TomTom also acquired the French FM provider DAMS Tracking, adding another 27,000 subscriptions to the installed base. Francisco Partners moreover divested Masternaut to Summit Partners and FleetCor in the same month. In July 2014, Zucchetti Group acquired a majority share of Macnil from its founders. The latest transaction was done in October 2014 when Finder acquired its Polish competitor Autoguard to form the largest FMS provider in Poland. Mr. Fagerberg anticipates that the market consolidation of the still overcrowded industry will continue in 2015.

Berg Insight to participate in M2M Summit Scandinavia
Berg Insight will take part in the M2M Summit Scandinavia that is held November 4 in Stockholm. Our Senior Analyst Tobias Ryberg will present. Please contact us if you would like to take the opportunity to meet with us there. Click on the link below for more information about the event. Tobias will also participate in the European Utility Week that is held in Amsterdam in the same week. Let us know if you would like to meet with us there as well.
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The installed base of fleet management systems will reach 12 million units in the Americas by 2018
According to a new research report from the analyst firm Berg Insight, the number of active fleet management systems deployed in commercial vehicle fleets in North America was 4.0 million in Q4-2013. Growing at a compound annual growth rate (CAGR) of 15.3 percent, this number is expected to reach 8.1 million by 2018. In Latin America, the number of active fleet management systems is expected to increase from 1.9 million in Q4-2013, growing at a CAGR of 16.1 percent to reach 3.9 million in 2018. The top ten providers of fleet management systems in the Americas now have a combined installed base of more than 2.5 million active units in the region. Leading solution providers including Fleetmatics, Trimble, Zonar Systems and Telogis now all have more than 300,000 active units in this market. The consolidation trend in the fleet management industry has continued and the market has seen a number of major transactions in recent years. Qualcomm has divested its Omnitracs business which pioneered the fleet management industry in the 1980s. Omnitracs has since then acquired other solution providers – most notably the competing heavy truck fleet management provider XRS with more than 100,000 subscribers. The global fuel card and workforce payment provider FleetCor has moreover acquired NexTraq based in the US while the tire manufacturer Michelin has acquired the leading Brazilian fleet management provider Sascar. “These two deals are particularly interesting due to the fact that the well-known acquirers are newcomers to the fleet management space”, said Rickard Andersson, Senior Analyst, Berg Insight. He adds that both FleetCor and Michelin decided to enter this market after having identified relevant synergies between its traditional product portfolios and fleet management solutions. The fleet management industry still remains overcrowded as there are hundreds of solution providers in the Americas alone. Numerous additional mergers and acquisitions are thus expected in this industry in the upcoming years. “Berg Insight anticipates a future scenario where the global fleet management market is dominated by a handful of providers with installed bases measured in the millions”, concluded Mr. Andersson.

PND shipments fell to 22 million units while users of navigation apps grew to 180 million worldwide in 2013
According to a new research report from the analyst firm Berg Insight, global shipments of Personal Navigation Devices (PNDs) declined from 28 million units in 2012 to 22 million units in 2013. There are signs that the decline is slowing and some emerging markets still experience growth. However, on the whole, the PND market is set for a continued downturn on a global basis. Berg Insight forecasts that PND shipments will decline to only 10 million units worldwide in 2019. A number of developments are affecting the PND market. Retailers have reduced shelf space and marketing for PNDs in favour of other consumer electronics products. Competition from other navigation solutions, especially navigation apps, is also intensifying. Over time, PNDs will also face further competition from in-dash navigation systems as more car brands launch low cost systems. Moreover, the installed base of PNDs is already high and replacement cycles are likely to be prolonged since PNDs have matured considerably and many devices are now sold with lifetime map updates, giving users less reason to replace their existing devices as frequently. The user experience for handset-based navigation apps is now improving through better integration in the car. Some vendors have released NFC-enabled car mounts enabling the owner to configure the handset to turn on the GPS and launch a navigation app when the phone is placed in the mount. A majority of car manufacturers have also started to offer smartphone integration solutions that connect the vehicle’s infotainment system with the user’s smartphone via Bluetooth, Wi-Fi, USB or HDMI. It is then possible to display and control smartphone apps using the touchscreen and controls in the car. Higher smartphone adoption along with broader availability of low cost and free navigation apps are important factors for the continued increase in usage of mobile navigation services worldwide. “The number of mobile subscribers worldwide using a turn-by-turn navigation app on their handset at least once per month grew from 150 million in 2012 to 180 million in 2013”, said André Malm, Senior Analyst, Berg Insight. He adds that in most markets, smartphones from major vendors now come bundled with free navigation apps. The leading navigation service providers on a global basis include Google, Apple, Telenav, Appello Systems, Nokia and Garmin. Examples of major local players include AutoNavi and Careland in China, SK Planet in South Korea, NAVITIME and ZENRIN in Japan, as well as Navitel and Yandex in Russia. Despite increasing competition from free navigation apps, many mobile operators are still marketing their own navigation services developed by companies such as Telenav, TeleCommunication Systems and Appello Systems. “App developers and operators are now trying to monetise navigation apps by introducing premium features and advertising. Developers are also forced to reduce costs as competition increases, for instance by adopting OpenStreetMap data to reduce map licensing fees”, concludes Mr Malm.

Shipments of OEM embedded telematics systems will grow to 54.5 million worldwide in 2020
According to a new research report by Berg Insight, shipments of OEM embedded telematics systems worldwide are forecasted to grow from 8.4 million units in 2013 at a compound annual growth rate (CAGR) of 30.6 percent to reach 54.5 million units in 2020. Moreover, Berg Insight forecasts that the number of cars sold worldwide equipped with head-units featuring handset-based telematics capabilities will grow from 7.0 million in 2013 to 68.5 million in 2020. Telematics is a broad term that may be applied to a wide range of connected services in the automotive industry. Berg Insight’s definition of a car telematics system is an automatic system designed for passenger cars that incorporates some form of cellular communication. Automotive manufacturers can choose between several connectivity options when creating connected car services, which are not mutually exclusive. The main options today are embedded telematics devices, tethered handsets and integrated smartphones. Car manufacturers often use a combination of these options to support different customer needs and keep pace with the rapid development of mobile technology. Connected car services are gaining momentum globally after many years of development and gradual rollout. The drivers behind adoption of telematics systems among car manufacturers are both commercial and regulatory. Safety regulations that aim to make automatic emergency calls with vehicle location mandatory in all new cars are for instance being adopted in the EU and Russia with the eCall and ERA-GLONASS initiatives respectively. In other markets such as North America and Japan, commercial services have driven adoption of OEM telematics services that have evolved from being a differentiator to a mainstream feature offered by most car brands. Several categories of connected car services are now offered by leading car manufacturers. Examples include emergency call and roadside assistance, stolen vehicle tracking (SVT), vehicle diagnostics, connected navigation and infotainment, as well as convenience applications. Convenience applications for instance include remote control of vehicle functions such as door lock/unlock and air conditioning, vehicle status and finding the last parking position. Several other applications also exist, for instance usage-based insurance, leasing and rental fleet management, as well as electronic toll collection and road charging. Most telematics services can be supported by any connectivity type, although embedded connectivity is the most suitable option for applications including emergency call, SVT and convenience applications. There are many business rationales for car telematics, ranging from monetary savings for the car owner in the case of SVT and usage-based insurance, to product differentiation, improved customer relationship management, potentially lower costs of product recalls and soft value creation for the car OEM. Berg Insight forecasts that the number of telematics service subscribers using embedded systems will grow at a compound annual growth rate of 38.1 percent from 16.6 million subscribers in 2013 to 158.9 million subscribers in 2020. “A key factor that influences the growth in active subscribers is the length of the free trial period included in the price of new cars”, said André Malm, Senior Analyst, Berg Insight. He adds that the free period now typically ranges from 6–12 months in the case of Chrysler, GM, Mercedes-Benz, Toyota and Volkswagen to 3 years for Hyundai and 10 years for BMW. “Renewal rates for telematics subscriptions after the free period expires are presently relatively low”. However, car brands are now launching cloud-based telematics services that facilitate customisation of service packages to better meet the needs of individual customers. Several car manufacturers have app stores that enable car owners to download apps directly to the infotainment system of the car. “New split-billing solutions being introduced by telecom operators also increase flexibility in business models for car manufacturers offering connected car services to their customers”, said Mr Malm. Split-billing can for example enable car manufacturers to bundle services such as eCall, roadside assistance and diagnostics for the lifetime of the car, while high bandwidth applications like infotainment and car hotspot features are billed separately.

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