Brief:

• Volvo selected telecom equipment maker Ericsson to help provide car owners with more connected services, according to an announcement. The five-year agreement means that Volvo will use Ericsson's technology for digital services such as infotainment, navigation, automation, telematics and fleet management.
• Financial terms of the agreement weren't disclosed, but Ericsson said the deal is the largest one for its Connected Vehicle Cloud (CVC) platform. Under the partnership, Volvo will be able to offer digital vehicle services in more than 120 markets worldwide.
• The cloud-based services comply with regulations globally, including the European Union's General Data Protection Regulation (GDPR), according to the company. Ericsson's platform will support applications such as autonomous driving that will come with the rollout of next-generation 5G mobile networks.

Insight:

Carmakers like Volvo are preparing for the growing demand for connected-car services that are expected to radically transform the way people get around. Autonomous vehicles also will create new opportunities for marketers and brands to interact with consumers. Every major carmaker, and tech companies like Google and Uber, are developing autonomous vehicles that will let people use their commuting time for other activities, such as online shopping, eating and drinking, watching TV, reading or talking on the phone.

Worldwide sales of connected cars are forecast to reach 72.5 million units in 2023, up from 24 million in 2015, according to IHS Markit forecasts. Consulting firm McKinsey estimated that monetizing the data from connected cars will become a $750 billion industry by 2030, including the direct marketing of products and services to consumers, and from sales of data and targeted advertising.

Ericsson, which is the largest supplier of mobile network equipment, seeks to be a key part of the connected-car future by working with vehicle makers like Volvo. Ericsson this month showcased a pilot program with vehicle maker Einride and telecom company Telia to provide self-driving trucks for logistics company DB Schenker. The program connects Einride's autonomous T-pod vehicles with a 5G network to work continuously at a DB Schenker facility in Jönköping, Sweden, according to a statement.