Connected Car Market to Reach 250 Million Vehicles by 2020: Gartner

The segment will become one of the largest parts of the rapidly growing Internet of things market, according to the analysts.

connected cars

There will be more than 250 million connected cars by the end of the decade, according to Gartner analysts.

In a report Jan. 26, the analysts said that vehicles are becoming an increasingly large part of the burgeoning Internet of things (IoT) market, and that will only grow over the next few years, with one in five cars having some form of wireless network connectivity by 2020. As cars are becoming more connected, it will lead to new in-vehicle services and self-driving capabilities. In-car connectivity already is beginning to move from luxury and premium vehicles into more midrange cars, according to James Hines, research director at Gartner.

"The increased consumption and creation of digital content within the vehicle will drive the need for more sophisticated infotainment systems, creating opportunities for application processors, graphics accelerators, displays and human-machine interface technologies," Hines said in a statement. "At the same time, new concepts of mobility and vehicle usage will lead to new business models and expansion of alternatives to car ownership, especially in urban environments."

The IoT is expected to grow rapidly over the next several years as more devices and systems—from smartphones and tablets to cars, home appliances, industrial systems and surveillance cameras—become connected to the Internet and each other. The numbers vary—Gartner analysts predict that the number of connected things will grow from 4.9 billion this year to 25 billion in 2020, while Cisco Systems said it will go from 25 billion last year to 50 billion at the end of the decade—but the trajectory is upward.

Vehicles have become a focus of a growing number of tech vendors and automakers, from Google, Intel and Qualcomm to Honda and Ford. Most recently, officials with chip maker Nvidia at the 2015 International Consumer Electronics Show put much of their focus on the automotive industry, including introducing the company's Drive PX for in-car analytics and Drive CX platform for in-cabin infotainment systems.

IBM earlier this month released its Automotive Global Study 2025, in which auto executives said cars will become more personalized for drivers over the next 10 years, but autonomous vehicles and fully automated driving will not yet be commonplace.

In a report in July 2014, Infonetics Research analysts said that auto makers like GM, BMW and Tesla are putting a lot of money into connected car programs, including partnerships with machine-to-machine (M2M) service providers like AT&T and China Mobile. The car connected segment accounts for as much as 90 percent of their M2M revenues.

In all, the connected vehicle market between 2013 and 2018 will grow about 25 percent annually, almost 21 times the expected growth rate of traditional mobile voice and data services, according to the research firm.

The market for advanced driver assistance systems (ADAS) is growing rapidly, according to ABI Research analysts. In a Jan. 26 report, the firm said the market is expected to grow from $11.1 billion last year to $91.9 billion by 2020, and moving past $200 billion by 2024. Helping drive the growth is the expansion of the technology from high-end luxury vehicles to more affordable cars and mini automobiles. ABI Research analyst James Hodgson pointed to Toyota's planned rollout of several packages as an example of the ADAS technology being brought to the mass market.