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Despite Chipset Shortage, Connected Vehicle Sales are on Path to Recovery

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News provided by

ABI Research

06 May, 2021, 08:00 GMT

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After sharp drop, connected vehicle shipments will rise by 20% in 2021

LONDON, May 6, 2021 /PRNewswire/ -- New vehicle sales contracted by 15% in 2020, a lower drop than initially anticipated given the dismal prospects in the third quarter of last year. Consumer enthusiasm began to recover at the end of 2020 and the first quarter of 2021, which caught carmakers and their suppliers by surprise. Meanwhile, consumers have become more demanding about their in-vehicle infotainment expectations, driving strong interest in connected vehicles and boosting growth opportunities for the industry. ABI Research, a global tech market advisory firm, expects a 20% growth in connected vehicle sales in 2021 and a 10.4% CAGR between 2020 and 2026.

"Announcements such as the partnership between Hyundai and NVIDIA to standardize AI-based infotainment experience throughout its fleet, Mercedes's MBUX Hyperscreen, BMW's iDrive 8, and Tesla Model S with ten teraflops of processing power for superior gaming experience demonstrate that the connected vehicle technologies that will shape the automotive industry in 2021 and beyond will be all around the infotainment systems. This will lead to opportunities for the whole ecosystem, but especially chipset providers, such as NVIDIA, Qualcomm, Xilinx, and NXP, offering powerful platforms to handle AI-based functionalities and headroom for OTA updates."

Shipments of vehicles with connected infotainment will grow by 23% in 2021, returning to pre-pandemic levels, led by increased penetration in emerging market regions. The recently announced partnership between Ford and Google shows a considerable migration to Android OS, which will see more than doubled penetration in production vehicles by 2023 and 2024. The closer proximity between carmakers and Google, unthinkable a few years ago, is a response to the poor reviews of embedded systems and still high dominance of smartphone projection.

"Nevertheless, because of the quicker than expected demand recovery, the automotive industry has a significant challenge to overcome in 2021," says Bezerra. Due to the auto factories shut down last year, semiconductor companies shifted their production to other markets to compensate for the missing revenue. With lifting in restrictions, consumer demand bounced back faster than expected. Carmakers have increased production to meet the demand. However, as semiconductor companies did not immediately switch their factories back to automotive-grade chips, they could not fulfill orders on time, forcing OEMs to cut back production due to missing parts. Supply disruption, which is likely to be solved by the end of the year, will delay sales of connected vehicles in the first quarters of 2021 but should have a mild effect on the annual sales.

 While the connected vehicle subscription model has not proved profitable yet, sensor data marketplaces, OTA updates, and in-vehicle commerce are examples of how connectivity can help OEMs shift from a transactional relationship to ongoing monetization throughout the vehicle's lifecycle. "However, to realize those opportunities' potential, OEMs must offer a more compelling user experience than smartphone mirroring to increase touchpoints with their embedded systems. Tesla, Mercedes-Benz, Volvo/Polestar, Harman, Visteon, and Aptiv are examples of OEMs and Tier Ones heavily investing in differentiation," Bezerra concludes.

These findings are from ABI Research's Connected Cars semiannual update report. This report is part of the company's Smart Mobility & Automotive research service, which includes research, data, and ABI Insights. Depicted in a PowerPoint format, the Market Update provides a snapshot into current and future market opportunities and threats for a specific technology as well as focusing on a selected key market and associated trends.

About ABI Research
ABI Research provides actionable research and strategic guidance to technology leaders, innovators, and decision makers around the world. Our research focuses on the transformative technologies that are dramatically reshaping industries, economies, and workforces today. ABI Research's global team of analysts publish groundbreaking studies often years ahead of other technology advisory firms, empowering our clients to stay ahead of their markets and their competitors.

ABI Research提供开创性的研究和战略指导,帮助客户了解日新月异的技术。 自1990年以来,我们已与全球数百个领先的技术品牌,尖端公司,具有远见的政府机构以及创新的贸易团体建立了合作关系。 我们帮助客户创造真实的业务成果。 

For more information about ABI Research's services, contact us at +1.516.624.2500 in the Americas, +44.203.326.0140 in Europe, +65.6592.0290 in Asia-Pacific or visit www.abiresearch.com.

Contact Info: 

Global                                                             
Deborah Petrara                                                           
Tel: +1.516.624.2558                                                    
pr@abiresearch.com 

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