Revenues generated in the commercial fleet telematics market will rise from about $7.25 billion in 2012 to some $26.8 billion in 2018, according to a new study from ABI Research.
The market-research firm says that North America will remain the biggest regional market, followed closely by the Asia Pacific, with Western Europe coming in third place.
The sector has been heavily affected by M&A activity over the past two or three years, notes ABI, with private equity firms playing a pivotal role in consolidation.
Vector Capital (San Francisco, CA, USA) only recently sold Teletrac (Garden Grove, CA, USA) to Danaher (Washington, D.C.) for an undisclosed sum, after claiming to have “transformed the business” since acquiring it in August 2010, and it is not long since Qualcomm (San Diego, CA, USA) sold Omnitracs to Vista Equity (San Francisco, CA, USA) in a $800 million cash deal.
“It will be interesting to see Vista Equity’s strategic road-map for Omnitracs and how this will impact other players during the next few years,” said Gareth Owen, principal analyst at ABI Research.
Meanwhile, Francisco Partners (San Francisco, CA, USA), another private equity group, stands behind the creation of Masternaut (Aberford, UK), now one of Europe’s biggest commercial telematics service providers.
Francisco Partners also owns US-based tracking company NexTraq (Atlanta, GA).
According to ABI, telematics service providers are also in acquisition mode.
In August, TomTom (Amsterdam, Netherlands) acquired Spain’s Coordina (Barcelona), boosting its active installed base of subscribers to more than 300,000 vehicles, while mobile operators including Verizon Wireless (New York City, NY, USA) and Orange (Paris, France) are becoming increasingly involved in this space and launching fleet-management solutions.
“The commercial telematics industry has long been a very fragmented market but there are now firm signs that this is changing and we expect to see several players breaking the 500,000 subscriber unit barrier over the next few months and years,” said Owen.