Consumers will likely purchase more cars that are equipped with real-time traffic GPS navigation systems as the economy begins to recover and per capita disposable income rises
Los Angeles, California (PRWEB) December 05, 2011
In the five years to 2016, a new report from IBISWorld, the nation’s largest provider of industry research, estimates that revenue for the Real-Time Traffic Information Providers industry will increase at an average annualized rate of 38.9% to $1.6 billion. While the industry is forecast to continue growing at a phenomenal rate, revenue growth is expected to decelerate compared with the past five years. In 2012 and beyond, companies like Nokia will benefit from the continued adoption of smartphones, which will increase the number of mobile internet connections. As a result, the number of consumers using the industry's services will rise. The industry will also benefit as disposable income rises and more consumers replace their vehicles with new GPS-enabled cars. For this reason, industry research firm IBISWorld has added a report on the Real-Time Traffic Information Providers industry to its growing Technology and Business Productivity Software report collection.
In the five years to 2011, revenue for the Real-Time Traffic Information industry is expected to increase at an average annual rate of 42.7% to $308.9 million, including growth of 63.8% in 2011. The industry’s major players including Nokia and Inrix (a provider of real-time traffic data, tools and related mobile traffic applications) have benefited from an increasing number of vehicles equipped with real-time traffic global positioning systems (GPS) and a rising number of mobile internet connections. According to IBISWorld, other notable companies will continue to influence the industry over the next five years include Waze Ltd. and Google Inc. Operators use data from road sensors, GPS-enabled vehicles and mobile phones to gain insight into traffic conditions. The rising number of GPS-connected systems has increased data timeliness and reliability, further boosting demand for industry services.
According to IBISWorld analyst, Justin Molavi, Nokia's acquisition of Navteq greatly bolstered revenue growth as Nokia invested in the newly acquired company to increase revenue. Navteq's industry-specific revenue is anticipated to increase 106.3% per year in the five years to 2011. Additionally, a customer base expansion also benefited the company's top line, as more customers joined the platform. Nevertheless, profit has lagged behind revenue and is still in negative territory. Along with purchasing the company, Nokia has employed a loss leader strategy, where investments that are made in the early stages of the company are expected to pay off down the road. As such, profit has stayed in negative territory during the five years to 2011. However, the introduction of new advertising platforms with real-time traffic data will begin to build profit for this segment.
The proliferation of smartphones has primarily driven industry growth during the past five years. In the five years to 2011, the number of mobile internet connections has increased 81.3% to 120.8 million. The ability for commuters to check traffic in real time, at all times, has caused more consumers to rely on industry services. Consequently, industry operators have been able to partner with more companies to deliver the information, including auto manufacturing and mobile phone companies. Despite explosive demand, the high cost of setting up a network has deterred significant enterprise growth. In the five years to 2011, IBISWorld estimates that the number of industry firms has increased at an average annualized rate of 11.8% to 42.
According to IBISWorld analyst, Justin Molavi, in the five years to 2016, industry revenue is forecast to increase 38.9% annually to $1.6 billion. “Consumers will likely purchase more cars that are equipped with real-time traffic GPS navigation systems as the economy begins to recover and per capita disposable income rises,” says Molavi. Furthermore, industry operators will benefit from an ever-increasing network of crowdsourced information (which involves sourcing data from multiple data points). This factor, coupled with a growing repertoire of value-added services, is expected to boost profit margins. By 2016, industry profit is forecast to represent 22.0% of revenue, an increase from 20.0% in 2011. Operators will also increase their market by expanding into new coverage areas, including smaller cities and more surface streets.
For more information, including latest trends, statistics, analysis and market share information, download the full report from IBISWorld on the Real-Time Traffic Information industry
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IBISWorld Real-Time Traffic Information industry Market Research Reports Contain:
About this Industry
Industry at a Glance
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalisation & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
Jargon & Glossary
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Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.
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