As the capabilities of vehicle infotainment systems advance, and consumers come to expect information in real time, new car models are shipping with a basic system based on the Internet of Vehicles (IoV) paradigm.
By 2020, 75% of the world's cars will be connected to the Internet, and the growth of IoV will bring in around $2.94 billion in revenue, according to a new report by Topology, a division of TrendForce market research.
In addition, autonomous or self-driving vehicles will enter mass production by 2020 as more major auto makers in recent years have committed to those vehicles' R&D, according to Topology.
The scale of the autonomous car market will likely pass a million-vehicle mark by 2035, according to Topology analyst Eric Chang.
Driverless cars depend on development in advanced driver assistance systems (ADAS), which provide safety features, while IoV enables "smart cars the ability to learn," Chang said. "And only then can a truly automated driving system be put on the road."
Many big automakers launched their automated driving systems products at this year's CES. Fueled by Google's driverless car project, traditional carmakers are eager to show the results of their research to the public, Topology said.
Besides automotive manufacturers, component manufacturers, such as Bosch and Denso, and semiconductor manufacturers, such as Texas Instruments and Infineon, are also aggressively engaging in R&D of automated driving systems. Their approach is to enter the field with sensors and driver assistance systems, the report said.
Improvements to automated driver systems will also push developments in smart-car driving assistance systems and IoV-related technologies.
Topology stated that ADAS and IoV products and services will become mainstream in the auto market beginning this year through 2020. By then, ADAS will be in the majority of vehicles.
ADAS, which is primarily to alert the driver of potential accidents, is likely to become the standard in all entry-level vehicles, Topology said.
Products that offer the ability to take over control of the cars, by contrast, will become optional.
As for the IoV market, the collaboration among different sectors will accelerate growth. These collaborators include automakers, semiconductor firms and governments that are rolling out infrastructure that can wirelessly communicate with vehicles. For example, any poor roadway conditions or an accident ahead could automatically be detected in order to warn oncoming traffic.
"Thus, the important step for companies working on automated driving systems is to have ADAS and IoV equipped ... mass-produced vehicles," Chang added.
The future development of autonomous vehicles will depend on sensors for reading biological data inside a vehicle and environmental data outside; communication technology; and driver assist and decision-making systems. "Every one of these technologies is indispensable to the industry," Chang said.
TrendForce's research into autonomous and connected vehicles buttresses a similar report by Gartner last year, which predicted 150 million vehicles would be IoV capable by 2020.
While much IoV research in developed countries is currently centered around driving safety technology and emergency rescue features, consumers are increasingly interested in convenience.
The added connectivity will enable carmakers to change their business model from pure hardware developers to tech innovators that draw income from mobile apps. To do that, however, vehicle manufacturers will need to team up with companies such as Google, Apple and Samsung.
"To facilitate that kind of shift, connected-vehicle leaders in automotive organizations need to partner with existing ecosystems like Android Auto or Apple CarPlay that can simplify access to and integration of general mobile applications into the vehicle," Gartner analyst Thilo Koslowski said in the report.
As the amount of information being fed into a vehicle head units or telematics systems grows, cars will be able to capture and share not only internal systems status and location data, but also changes in surroundings in real time, according to Koslowski.
The result: Ultimately, your car will become just another part of your mobile data plan.