Frost & Sullivan: Internet Radio is the Most Popular Brought-in App Being Developed by Automotive OEMs

LONDON, July 27 /PRNewswire/ -- Brought-in apps such as Internet radio are the latest developments in the automotive apps and services market. There is a gradual shift in the United States and Europe from embedded telematics to hybrid connected telematics in terms of allowing features to run from a smartphone inside the car. Within this hybrid connected space, vehicle manufacturers have enough traction to allow Internet radio apps to run inside the car from the smartphone and control it using vehicle Human Machine Interface (HMI).

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New analysis from Frost & Sullivan (http://www.automotive.frost.com), Executive Analysis of European and North American Automotive App Store Concepts and Services, finds that the hybrid connected model will have an addressable market size of more than 5 million units by 2015 in North America alone. Hybrid connected telematics models like the Ford Sync offers huge potential to bring smartphones into the cabin of the car and allow brought-in apps to run using vehicle HMI.

"Gen-Y'ers and technology usage trends in the United States and Europe are driving the use of mobile Internet on new generation smartphones and downloading apps from sites like Apple is becoming increasingly popular," says Frost & Sullivan's Global Programme Manager, Praveen Chandrasekar. "By using safe HMI to allow smartphones to be accessed inside the cabin, vehicle manufacturers are creating a superior brand image since consumers can continue to savour their digital experience inside the car." In Europe and the United States, Gen Y will continue to account for at least a quarter of the total population until 2030, but in South Asia, Gen Y will likely represent over 40 per cent of the population by 2030

This market is not without its challenges though, with connectivity and driver distraction being the main problems. On the one hand, vehicle manufacturers are looking to offer connectivity and services using consumers' voice and data connection. On the other hand, telecom operators are objecting to this model and want vehicle manufacturers to put an additional security identity module (SIM) card with a dedicated voice and data plan to power services inside the car.

"Furthermore, the safety regulatory committees in Europe and North America are concerned about safety and driver distraction aspects associated with smartphones in cars," explains Chandrasekar.

There is increasing pressure from automakers to allow apps from smartphones to run inside the car for consumers to safely utilize apps using vehicle HMI. Although apps like Pandora Internet radio are available free of charge, it is lucrative for automakers to provide specific HMI solutions that consumers can buy to access apps. This will allow consumers to manage everything through one communication module with a single bill.

"Future trends like the EU's eCall legislation may mandate obligatory dedicated SIM cards inside the car for data and voice services, enabling the European telematics market to transition from a completely built-in model to a hybrid connected brought-in model," concludes Chandrasekar.

If you are interested in more information on this study, please e-mail Monika Kwiecinska, Corporate Communications, at [email protected], with your full name, company name, title, telephone number, company e-mail address, company website, city, state and country.

Executive Analysis of European and North American Automotive App Store Concepts and Services is part of the Automotive & Transportation Growth Partnership Services programme, which also includes research in the following markets: Strategic Market and Technology Assessment of Telematics Applications for Electric Vehicles, Global Trend Analysis of Passenger Vehicle Telematics and Infotainment Market - 2009 Edition, and Strategic Analysis of The European Market for Low Cost OEM Navigation Systems. All research services included in subscriptions provide detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants.

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SOURCE Frost & Sullivan