The Internet of Things (IoT) Chip Market in Transportation is estimated at US$376.791 million for the year 2019. Companies are combining IoT with artificial intelligence, predictive analytics, and big data in order to revolutionize the fleet management industry, thus positively impacting market growth.Internet of Things (IoT) in transportation industry helps to assist in improving road safety while easing traffic congestion and averting road accidents. According to the WHO (World Health Organization), approximately 1.5 million people globally die each year due to road traffic crashes. Road traffic crashes cost most countries 3 percent of their gross domestic product. The 2030 Agenda for Sustainable Development has a set target of reducing the global number of deaths and injuries from road traffic crashes to almost half by 2020. The United States Department of Transportation, for example, is working with car manufacturers to incorporate IoT technology in order to reduce the occurrence of crashes by 80 percent. Declining cost of IoT components, better and enhanced internet connectivity, and growing communication and technology industry are other factors that are spurring the market growth. Increasing investments in smart cities, both public and private, in smart cities projects in different countries is another factor that is driving the growth of IoT Chip market in transportation.
Growing energy consumption has also led to a surge in the adoption of IoT technology across the transportation sector, thus fuelling the demand for IoT chips. IoT allows efficient optimization and efficient routing management which can reduce the overall energy consumption while reducing carbon emission.
Growing international trade volume coupled with the booming e-commerce industry is also escalating the demand for IoT chips in the transportation sector. Advancements in technology such as mobile computing, faster and more widespread wireless connectivity, and the evolution of cloud and big data is boosting the adoption of IoT across this sector. IoT is very useful for warehouse management solutions as it is a part of the transportation stage of logistics. The technology helps to yield comprehensive data about warehouse operations such as inventory, temperature, and performance of each equipment. Companies use this data to predict equipment failures and reduce the associated risks and delays in inventory transportation.
Recent shut down of businesses due to the COVID-19 global pandemic outbreak is expected to influence the IoT Chip market in transportation as prices of IoT chips along with other components might increase over time due to the current halt in production.
Growing investments in the autonomous fleet will further continue to bolster the growth of IoT Chip market in transportation during the next five years. In October 2019, the Swedish autonomous vehicle startup Einride raised $25 million in a Series A round that was used to fund its expansion in the United States. Recently in March 2020, autonomous driving technology manufacturer Waymo (owned by Alphabet), has received a significant external investment of $2.25 billion, with a major portion coming from the Canada Pension Plan Investment Board (CPP). In November 2019, Iteris Inc., the supplier of applied informatics systems for the transportation industry, entered into a Solution Technology Integrator (STI) agreement with Cisco Systems as part of the transportation IoT solutions segment.
By geography, IoT Chip market in Transportation is segmented as North America, South America, Europe, Middle East and Africa (MEA), and Asia Pacific (APAC). North America accounted for the major market share in 2019 and will remain at its position until the end of the forecast period. The early adoption of new technologies and high investments in incorporating these technologies across the transportation sector, especially in the United States. According to the American trucking Association, the trucking business is a major part of the U.S. economy, as nearly 70 percent of all freight transportation is done via trucks. Rising investments in the autonomous fleet is, thus fuelling the growth of IoT Chip market in transportation in the United States. Digital inclusion is paving the way for smart cities development in Mexico which, in turn, will propel the growth of the IoT chip market in transportation.
APAC regional market is projected to witness a substantial CAGR during the forecast period owing to rising initiative regarding smart cities in countries like India and growing focus to digitize the transportation sector across various APAC countries. Many companies are launching pilot projects across this region in order to develop IoT solutions especially for the transportation sector in the region. For instance, in 2018, DHL, the world’s largest mail and logistics company, announced the launch of DHL SmarTrucking which is an innovative trucking solution leveraging IoT technology. The solution was first rolled out across road networks in India and it equips trucks with IoT sensors so as to provide real-time data analysis for route optimization while reducing transit times by up to 50 percent and providing over 95 percent reliability for real-time tracking. DHL SmartTrucking IoT solution aims to build a fleet of 10,000 IoT-enabled trucks by 2028.
Prominent key market players in the IoT chip market in Transportation include Intel Corporation, Qualcomm Technologies, Inc., Texas Instruments Incorporated, Cypress Semiconductor Corporation, and NXP Semiconductors among others. These companies hold a noteworthy share in the market on account of their good brand image and product offerings. Major players in the IoT Chip market in Transportation have been covered along with their relative competitive position and strategies. The report also mentions recent deals and investments of different market players over the last two years.