A growing number of companies are entering the automotive supply chain because of aftermarket demand for telematics and infotainment systems, meaning that traditional automotive suppliers are losing out. The market is already led by major consumer electronic suppliers, according to a new report by Frost & Sullivan.
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“The leading product segments such as navigation and Bluetooth telephony are luring an increasing number of suppliers in the value chain, thus contributing to the highly dynamic nature of the aftermarket,” notes Frost & Sullivan Research Analyst Shyamsundar Anandhan.
In the future, the market is likely to be dominated by companies that have a presence in portable navigation and portable multimedia. In a related development, component or accessory suppliers will witness a surge in growth opportunities if they improve their capabilities and evolve into system suppliers.
Meanwhile, the entry of new participants such as component suppliers and various traditional automotive companies into the portable navigation segment is expected to result in increased market fragmentation. Subsequently, this is likely to hamper the growth of consumer electronic companies.
“The introduction of completely off-board navigation systems will lead to greater dependence on mobile network operators to ensure the provision of high-quality services,” states Mr. Anandhan. “As a result, the market will witness reduced monopoly of navigation system suppliers.”
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By GlobalDataDespite this, navigation systems, due to their high utility value, will continue to be the highest revenue-generating product segment in the market. Moreover, portable navigation devices are replacing navigation systems that were traditionally embedded with either turn-by-turn or map display systems. Thus, portable navigation systems will continue to dominate the sector, as they offer better potential in comparison to traditional embedded navigation systems.
At the same time, the emergence of integrated technology is driving suppliers to combine more than one application into a single device to gain improved market acceptance. Accordingly, integrated systems, which include navigation, rear seat entertainment (RSE) and other crucial features in one single device are expected to promote overall market development.
While the stand-alone RSE market is on the decline, portable DVD players and integrated systems are emerging, thus supporting the continuously evolving in-car entertainment sector. Hence, in-car entertainment, coupled with DVD-based navigation is likely to challenge portable navigation suppliers that possess a large market share.
In the context of Bluetooth interface systems, hands-free calling through Bluetooth is gaining importance as a popular addition to the 1-DIN radio or a portable navigation device.
Overall, companies with multiple product segment capabilities, which include a portfolio that offers integrated systems, are likely to exhibit maximum growth potential in the aftermarket for telematics and infotainment systems. Moreover, navigation system suppliers would do well to forge alliances with mobile network operators and other navigation solution providers to provide high-quality off-board navigation.
