The Evolution of On-Board Connectivity: How Advances in Technology Are Transforming Transportation

On-board Connectivity Market Trends, Forecast 2023-2033

The global on-board connectivity market size is estimated to reach USD 40.48 billion by 2033, up from USD 11.21 billion in 2023, at a compound annual growth rate (CAGR) of 13.81%.

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The on-board connectivity provides connectivity solutions for various modes of transportation, including trains, aircraft, and ships. Key components of the on-board connectivity market include hardware such as antennas, routers, and modems, as well as software solutions for managing data, security, and user interfaces. These technologies enable passengers and operators to access the internet, stream media, receive real-time traffic updates, and utilize other connected services while in transit.

The on-board connectivity market has witnessed remarkable growth in recent years, fueled by advancements in communication technologies and the increasing demand for connected services in transportation. Furthermore, the growing emphasis on safety, efficiency, and operational optimization in transportation is also likely to support the growth of the market during the forecast period.

Key Trends and Findings

• The deployment of 5G networks is revolutionizing on-board connectivity by offering faster speeds, lower latency, and greater capacity. This enables seamless streaming of high-definition content, real-time navigation updates, and enhanced communication between vehicles and infrastructure.
• The advent of connected and autonomous vehicles is driving the demand for advanced on-board connectivity solutions. These vehicles rely on robust communication networks to exchange data with other vehicles, traffic signals, and cloud-based platforms in real-time.
• Consumers are demanding personalized experiences tailored to their preferences and needs. On-board connectivity solutions are leveraging artificial intelligence (AI) and machine learning algorithms to analyze user data and deliver customized services.
• With the proliferation of streaming services and digital content, in-vehicle entertainment has become a significant focus area for on-board connectivity providers.
• North America leads the on-board connectivity market with 39.92% share, driven by the strong presence of automotive and technology companies, coupled with a high demand for connected services among consumers.
• Asia Pacific is emerging as a lucrative market for on-board connectivity, fueled by rapid urbanization, increasing disposable income, and growing demand for connected vehicles.

Market Drivers

Rising Consumer Demand for In-Vehicle Connectivity and Entertainment

The escalating consumer demand for in-vehicle connectivity and entertainment is anticipated to augment the on-board connectivity market during the forecast period. As modern lifestyles increasingly link with digital experiences, passengers expect seamless access to the internet, social media platforms, and multimedia content during their travels. Also, consumers prioritize driving convenience features and productivity amenities, such as intelligent parking-spot finders, in-car payment systems, and vehicle Wi-Fi hotspots, as crucial elements of connectivity and digital services.

The anticipated expansion of autonomous vehicle technology, enabling drivers to divert their attention from the road, may amplify the attraction of in-car gaming and entertainment options. Likewise, the proliferation of electric vehicles (EVs) could yield a comparable impact, as it would extend the duration of idle time individuals spend in cars during charging intervals. Present EV owners, who already dedicate time at charging stations, exhibit double the likelihood compared to traditional car owners in valuing entertainment and gaming offerings. Consequently, automotive manufacturers and technology providers are racing to meet this burgeoning demand by integrating advanced connectivity solutions and entertainment systems into vehicles, thereby enhancing the overall travel experience and ensuring that passengers remain connected and entertained throughout their journey.

Market Restraints

Security Issues

It's unsurprising that automobiles, aircraft, and ships increasingly incorporate systems reliant on digitalization, integration, and automation. As technology evolves, the potential for unauthorized access or malicious attacks targeting ships' systems and networks also escalates. Therefore, ensuring robust cyber risk management protocols on board is imperative. Additionally, risks may arise from personnel accessing on-board systems, such as introducing malware through removable media devices.

Some of the recent incidents include

• In November 2023, the Russia-affiliated group, responsible for a ransomware attack against Boeing, reportedly leaked approximately 45 gigabytes of data stolen from the aircraft company. The leaked files include Citrix logs, email backups, provisioning services, audits, and security controls.
• In January 2023, DNV, headquartered in Oslo, experienced a ransomware attack, compelling them to shut down the IT servers associated with their ShipManager system. This ransomware attack has impacted approximately 1,000 vessels.
• In April 2020, The Mediterranean Shipping Company (MSC) was the target of a malware attack. As a security measure, MSC closed down its servers to safeguard company data and temporarily took down its website. Fortunately, the attack only disrupted internal data processes.

The frequency of such cyberattacks has been steadily rising, leading to significant financial losses for businesses due to recovery costs, regulatory penalties, and collateral damage to reputation and trust. The maritime sector, previously perceived as secure due to limited internet connectivity and the isolated nature of ships at sea, has experienced a staggering 900% increase in cybersecurity breaches on operational technology as it transitions into the digital age. Thus, addressing these security and privacy concerns is important to foster trust and ensure the integrity of on-board connectivity systems in the automotive ecosystem.

Market Opportunities

Rapid Evolution of Advance Technologies

5G Technology utilizing a private cellular network built on 5G has the potential to enhance current WiFi and wired infrastructure. This enhancement enables the adoption of contemporary applications that demand high bandwidth, minimal latency, and increased connection density, ultimately leading to the creation of a more intelligent and interconnected ship. The features of 5G technology, such as high-speed broadband connectivity, minimal latency, support for numerous simultaneous connections, and quality of service via network slicing, facilitate these advancements.

Furthermore, its slicing technology can be tailored for particular scenarios, such as offering high-speed internet access to all guests aboard a cruise ship. This customization alleviates bandwidth limitations and enhances the overall guest experience. By leveraging a private 5G network and bolstering backhaul internet bandwidth connections, a plethora of new applications can emerge. These applications have the potential to lower operational expenses, elevate guest experiences, and generate revenue by capitalizing on monetization opportunities.

Implementation of Artificial Intelligencey

The integration of artificial intelligence (AI) and machine learning presents a significant opportunity for future market growth in the on-board connectivity sector. In recent years, there has been a surge of interest in artificial intelligence (AI). AI, encompassing machine learning (ML), deep learning (DL), and reinforcement learning (RL), has demonstrated notable success across various fields in science and engineering. Its application has yielded promising outcomes in numerous facets of satellite communication, such as beam-hopping, AJ, network traffic forecasting, channel modeling, space-air-ground integration, and energy management, among others.

• In January 2024, Thales demonstrated its distinctive approach to Artificial Intelligence, which played an essential role in assisting pilots operating an engineless scientific glider to navigate through unpredictable weather conditions as part of the US-based Airbus Perlan Mission II endeavor. The onboard Thales AI technology aided in identifying optimal upward routes for the engineless aircraft amidst intricate stratospheric waves intensified by the Polar Vortex, as well as determining secure pathways for the pilots amid constantly evolving meteorological and atmospheric circumstances. Consequently, the Perlan 2 glider soared to a remarkable altitude of 60,300 feet, effectively elevating Thales's FlytLink connectivity demonstrator to unprecedented heights.
• In September 2020, a test satellite, approximately the dimensions of a cereal box, was deployed from a rocket's dispenser alongside 45 other comparably small satellites. Dubbed PhiSat-1, this satellite featured a novel hyperspectral-thermal camera and onboard AI processing, made possible by an Intel Movidius Myriad 2 vision processing unit (VPU). The AI technology of PhiSat-1 was developed and evaluated by the Irish start-up company Ubotica, in collaboration with camera developer cosine, as well as the University of Pisa and Sinergise, culminating in a comprehensive solution.

As the capabilities of AI and machine learning continue to evolve, the on-board connectivity market stands to benefit from innovative solutions that improve efficiency, safety, and the overall passenger experience. Companies investing in AI and machine learning technologies will be well-positioned to capitalize on this opportunity and drive future growth in the on-board connectivity market.

Key Segment Analysis

Technology Segment Analysis Preview

The ground to air segment captured a substantial market share of 58.56% in 2023. The growing demand for air travel and the expansion of the aviation industry worldwide have spurred the adoption of advanced ground to air communication systems to ensure efficient air traffic management and safety. Additionally, the increasing use of unmanned aerial vehicles (UAVs) for surveillance, reconnaissance, and commercial purposes has bolstered the demand for ground to air communication solutions to maintain connectivity between these UAVs and ground control stations.

End User Segment Analysis Preview

The aviation segment held largest market share of 47.49% in 2023. Numerous commercial airlines and private jet companies employ in-cabin Wi-Fi systems and inflight internet services delivered via either satellite or air-to-ground networks. Aircrafts provide Wi-Fi connectivity through a combination of air-to-ground services or, more commonly, through satellite-based systems.

• In February 2024, Hanwha Phasor and Lufthansa Technik joined forces to provide cutting-edge in-flight connectivity solutions for commercial flights. Under a newly established multi-year agreement, Lufthansa Technik will undertake the design, construction, and provision of several hundred fuselage-mounted airborne Satellite Communications (SatCom) radomes annually for Hanwha Phasor.
• In 2022, Hawaiian Airlines revealed a partnership with Starlink, unveiling plans to install Starlink's inflight connectivity on its Airbus A330 and A321neo aircraft, as well as its fleet of Boeing 787-9 aircraft, starting in 2024 and continuing onwards.

These collaborative efforts between various companies serve as driving factors for the aviation segment. Through collaboration, companies can combine their expertise, resources, and technologies to develop ground-breaking products, services, and solutions that propel the industry forward.

Regional Insights

North America dominated the market with 39.92% of shares in the global on-board connectivity market. North America has a high demand for in-flight connectivity due to the extensive air travel within the region. Passengers expect seamless internet access during flights for both leisure and business purposes, driving the adoption of on-board connectivity solutions by airlines operating in the region. Additionally, the region is a hub for technological innovation, with many leading companies and start-ups focusing on developing advanced on-board connectivity solutions. Technological advancements such as the deployment of 5G networks and the emergence of satellite-based internet services contribute to the growth of the on-board connectivity market in the region.

Asia Pacific is expected to grow at a fastest CAGR of 15.18% during the forecast period. The Asia Pacific region is experiencing significant growth in air travel, driven by factors such as rising disposable incomes, urbanization, and increasing tourism. As more people travel by air, there is a growing demand for in-flight connectivity solutions to stay connected during flights, driving the adoption of on-board connectivity technologies by airlines operating in the region. Furthermore, governments in the region are investing heavily in expanding and modernizing their aviation infrastructure to accommodate the growing demand for air travel. This includes the construction of new airports, expansion of existing airports, and upgrading of air traffic management systems, creating opportunities for the deployment of advanced on-board connectivity solutions.

Recent Developments by Key Market Players

• February, 2024: The FirstNet Authority, in collaboration with its network partner AT&T, announced the latest network investment totaling $6.3 billion. This investment aims to provide comprehensive 5G capabilities on FirstNet, expand mission-critical services, and improve coverage.
• September, 2023: Intelsat revealed that its multi-orbit network services, utilizing both LEO and GEO satellites, will be accessible to airlines and aircraft lessors through Airbus' Airspace Link (HBCplus) solution. Intelsat will stand as the primary service provider in the manufacturer's versatile IFC service portfolio.
• June, 2023: Inmarsat Maritime unveiled its latest offering, the Fleet Reach coastal LTE service, designed to enhance maritime connectivity. Powered by Fleet Xpress, Inmarsat Maritime's Fleet Reach provides enhanced coastal connectivity, offering faster speeds, stronger signals, reduced latency, and more dependable connectivity for vessels navigating close to shore or berthed in port.
• January, 2023: Emirates chose Inmarsat as the provider of inflight connectivity for its upcoming fleet of Airbus A350s, reaffirming the UAE airline’s commitment to ensuring passengers has an exceptional flying experience. This significant agreement represents an expansion of the longstanding partnership between Emirates and Inmarsat. It will enable the airline to deliver advanced, high-speed inflight broadband using Inmarsat's acclaimed GX Aviation solution on-board 50 Airbus A350s scheduled to commence service from 2024.
• August, 2022: Royal Caribbean Cruises announced plans to provide on-board internet access using SpaceX's Starlink satellite network. This collaboration aims to address the longstanding issue of poor internet connectivity experienced by cruise ships at sea. The implementation of this technology will be rolled out across all Royal Caribbean-owned cruise ships, commencing immediately, with installation anticipated to be finalized by early next year.

Market Companies

Some of the key players in on-board connectivity market are Huawei Technologies Co., Nokia Corporation, Honeywell International Inc., AT&T Inc., Collins Aerospace, Nomad Digital, Panasonic Corporation, Bombardier Inc., Qualcomm, and ZTE Corporation, among others.

Market Segments

By Component

• Software
• Services

By Technology

• Ground to Air
• Satellite

By Application

• Communication
• Monitoring
• Entertainment

By End User

• Maritime
• Railway
• Aviation

By Region

• North America
  • U.S.
  • Canada
  • Mexico
• Europe
  • U.K.
  • France
  • Germany
  • Italy
  • Spain
  • Rest of Europe
• Asia Pacific
  • China
  • Japan
  • India
  • South Korea
  • South-East Asia
  • Rest of Asia Pacific
• Latin America
  • Brazil
  • Argentina
  • Rest of Latin America
• Middle East & Africa
  • GCC Countries
  • South Africa
  • Rest of Middle East & Africa