ABI: Strong Outlook for Commercial Telematics Points to $11B Market in 2013
August 4, 2008 // Published as a news service by IHS
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With cost pressures steadily increasing, fleet managers are challenged to get more productivity from their vehicles and drivers.
According to ABI Research, one option is to invest in new technology that can help optimize factors such as route planning, vehicle usage, driver performance and vehicle monitoring for safety and to prevent theft.
Analysts said this offers great potential for both telematics service providers (and their supply chain partners) and the fleet manager customer base.
"The world market for commercial telematics is poised for significant growth," said ABI Research principal analyst David Alexander.
"The combination of lower-cost electronics and wireless communication fees was always going to be an incentive for steady growth, but the recent large increases in fuel costs worldwide have had a dramatic effect on ROI [return on investment] calculations."
Over the last year or two, telematics applications from the major suppliers have demonstrated their reliability, and new functionality is being added frequently. Analysts said new entrants are keeping the existing suppliers on their toes and making sure the market remains competitive. There is plenty of business to go around in the short term, but now is the time for bigger players to ensure their futures by staying ahead on the innovation curve.
"We see significant growth in this market over the next five years, from a total of about $3.5 billion in 2007 to over $11 billion in 2013," said Alexander. "And as volumes grow, the component and communication costs are going to decline even more. The trend toward multiple functions is also likely to provide greater added value for fleet managers."
Source: ABI Research.