A fifth of all cars will have some form of wireless network connection by 2020 - amounting to over a quarter billion vehicles on roads worldwide, Gartner's analysts have predicted.

The analyst house forecasts that connected cars will be a vital aspect of an increasingly connected world – or ‘the Internet of Things’, which will be composed of 4.9 billion objects this year alone.

Companies like BMW are preparing for how the IoT will affect the car industry © BMW
Companies like BMW are preparing for how the IoT will affect the car industry © BMW

Further, there will be 25 billion connected “things” by 2020, Gartner added.

“The connected car is already a reality, and in-vehicle wireless connectivity is rapidly expanding from luxury models and premium brands, to high-volume midmarket models,” said James F. Hines, research director at Gartner.

This will present several business opportunities, he added. With a drive toward sophisticated in-car entertainment systems, application processors, graphics accelerators, and heads-up displays (HUDs) will be in demand – opening opportunities for the technology and manufacturing sector. 

HUDs have had the most rapid, recent growth in patent publications, latest figures show. Less traditional carmakers are investing in the technology and outsiders like Universal Displays and Johnson Controls are taking the lead in research and development.

With increased connectivity, traditional carmakers should take advantage of new business models as cars become more than just a means for transport – especially amongst city-dwelling customers – who may no longer be interested in owning a car, analysts suggest.

Some manufacturers are already creating new channels to ensure profits while car sales dip.

BMW recently partnered with rental company SixT for a car-sharing club in London boroughs like Hackney and Islington, allowing drivers to borrow BMWs parked on London streets by unlocking them through their smartphone.

Between this month’s tech show CES in Las Vegas and the Detroit Motor show, car manufacturers flaunted a host of technologies that offer new business models, including telematics-based insurance policies and semi-autonomous driving technology – some accessible from a smartwatch or phone.

There are benefits up for grabs for other industries too. Already telcos like Telefonica are thinking about using data from connected cars to inform town planning, push location-based advertising and increase safety. Many telecommunication providers have opened telematics divisions as well as insurance companies.

But as more attention centres on increased connectivity, data privacy will be scrutinised, putting pressure on carmakers to think twice about where driver data ends up. 

BMW have said a firm no to any third parties who have offered lucrative deals to tap into the manufacturer’s customer data.

Connected kitchens will cut costs for food and drink manufacturers

Aside from connected cars, Gartner says not enough attention has been paid to the part the “connected kitchen” will play in the IoT.

Connected kitchen appliances will save food and drink manufacturers 15 percent by 2020, analyst Satish RM said.

“The connected kitchen creates digital business opportunities at several levels in the food supply chain and retail food service," he said.

“A real-time inventory data collection from sensors related to kitchen ingredients enables automated generation and ordering of shopping lists, resulting in a streamlined and efficient inventory and optimised supply chain management.”

Thinking of building an IoT strategy?

A lack of dominant IoT vendors is problematic, Gartner said. 

“Many standards and ecosystems for the IoT are still in development and some of the vendors and ecosystems may fail during the working lifetime of current IoT projects,” said Alfonso Velosa, research director at Gartner.

“CIOs will need to ensure their prime system integrator has a strategy to future-proof their project. This is especially critical if the project involves infrastructure that may be in the field for decades. A gateway-based architecture will be a key approach to future-proofing IoT projects.”