Not all analysts agree on what the future state of the wearable industry will be, but most of them are happy to say that the next few years are going to see significant growth. One firm has been willing to put a number on that expansion too. According to analysts at Strategy Analytics, the industry will be worth more than $7 (£4.45) billion by as soon as 2019.
However, despite overall revenue being set for a boon over the next few years, it’s not entirely rosy for the industry:
“Although telematics service revenues are forecast to increase, the actual revenue per customer is set to decline steadily during the forecast period, making it essential for automotive OEMs to look to other ways to monetize their telematics offerings,” said Greg Basich, senior analyst for Strategy Analytics Automotive Multimedia and Communications Systems.
He went on to explain that as companies become more competitive and the cost of implementing telematics goes down, companies will be likely to drop their prices, especially when it comes to the initial set up costs. However, where the money will come from Basich explained, is more people taking on the now cheaper policies and from after-sales support. As more companies take on telematics, they’ll need someone to analyse it for them and that’s where a lot of the money can be made.
Collecting the information on vehicles and drivers is one thing, but turning that into actionable data is a whole other entirely.
He also said that it was important for telematics companies to realise that a lot of its revenue could be flushed down the toilet if they don’t control ongoing expenses for software support. In the report, Strategy Analytics offers recommendations on how to do this, though of course, you’ll need to be one of its existing customers to access it in full.
“The ability to keep recall-related costs under control is increasingly important to automotive OEMs, especially in light of the very large number of recalls issued this year,” said Richard Robinson, director of Strategy Analytics’ Automotive Multimedia and Communications Systems service. “Telematics enables much better control of, and understanding of, recall issues that could potentially cost OEMs billions of dollars.”
In the report, entitled “Monetising Telematics Service Revenues,” the firm highlights current market conditions and how those are set to evolve over the next few years and looks into how the telematics industry can learn something from the mobile gaming arena, offering some features on a “freemium” basis, rather than demoing the technology and then expecting a full, up-front payment for its integration.
Strategy Analytics also takes time in the report to look at the different efforts for telematics integration coming out of all of the major auto-makers and what is the best strategy to try and sell your telematics systems to those particular customers.
That and more can be found in the Strategy Analytics report, a summary of which can be viewed here.
Image source: Strategy Analytics