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What will 5G mean to automakers?

February 3, 2021

Luke McLeroy
Senior Vice President at Avanci
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5G is here and has the potential to provide as much or more value to automakers than to their customers.

Those putting 5G at the top of their intentions and investments will reap the rewards because it will unlock new revenue streams, create a closer connection to their customers, and allow them to stay ahead of their competitors as the automotive industry increases its focus on mobility rather than machines.

Analyst firm McKinsey estimates that mobility and data-driven services such as shared mobility, apps and navigations could create around $1.5 trillion of extra revenue, or a 30 percent boost, in 2030 compared to 2016. Ford and Google’s six-year partnership announced this week, which will see Google assume responsibility for all connectivity, from infotainment to AI in Ford cars, is testament to this.

Crucially too, it’ll allow automakers to have an enhanced and lasting connection to their customers, beyond just the point of sale, giving them the option to offer drivers features such as remote diagnostics, predictive maintenance and online service scheduling.

As cars become more connected as a result of 5G, they will generate and handle mass amounts of data. Data is key and car makers must ensure they can generate the same amount of data that technology companies such as Uber and Lyft do in order to compete as the industry transitions to providing mobility rather than vehicles.

5G is no longer the next big thing. It’s arriving in the auto industry this year and its importance will continue to grow. In the not too distant future, the majority of vehicles will have 5G connectivity on board, with analyst firm Gartner predicting that by 2023 the automotive industry will become the largest market opportunity for 5G IoT solutions.

Avanci is now the go-to global licensing platform for connected vehicles and other IoT devices, with 15 auto brands already on board as licensee and with 40 patent owners on board. More than 16 million connected vehicles on the world’s roads are already licensed through our platform. We’ve taken the complexity out of patent licensing so that automakers can focus on doing what they do best: building the next generation of connected vehicles. Please get in touch to find out more.