Berg Insight assesses how telematics systems for construction equipment are on the rise

An estimate provided by Berg Insight has shown that the installed base of active construction equipment (CE) OEM telematics systems globally will hit 4.6 million in 2021, compared to 1.8 million units in 2016.

The estimated target of the 4.6 million units will be achieved by registering a CAGR of 21.3%. This includes all CE telematics systems marketed by CE OEMs, either formulated in-house or supplied by the CE manufacturers in conjunction with third-party telematics players.

According to Berg Insight estimates, at the end of 2016 the European market accounted for nearly 0.4 million active CE OEM telematics systems. It is estimated that the North American market is marginally bigger than its European counterpart.  The rest of the world represents over 50% of the global installed base of CE telematics systems provided by construction equipment OEMs.

Alongside this, another Berg Insight research report projected that the number of active insurance telematics policies in the European market will reach 30 million by 2021, growing at a CAGR of 34.8%. In Q4/2016, this number stood at 6.8 million. While for the same period, the number of active insurance telematics policies in the North American market is anticipated to grow at a CAGR of 38.2% to reach 35.2 million, compared to 6.9 million in Q4/2016.

While hardwired aftermarket black boxes primarily dominate the European insurance telematics market, vast majority of the active policies in the North American market is represented by self-install OBD devices. However, in the recent times, a number of prominent US insurers have focussed on smartphone-based solutions. In the future, Berg Insight is anticipating a rapid increase in the uptake of smartphone-based solutions in all markets.

While the North America telematics insurance market is dominated by US-based Progressive, Allstate, Liberty Mutual and State Farm, the Canadian market is led by Desjardins. On the other hand, Italy-based insurers UnipolSai and Generali Generali together accounted for nearly 50%of the telematics-enabled policies in the European market.

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The installed base of construction equipment OEM telematics systems will reach 4.6 million units worldwide by 2021

The installed base of construction equipment OEM telematics systems will reach 4.6 million units worldwide by 2021

The installed base of construction equipment OEM telematics systems will reach 4.6 million units worldwide by 2021

Berg Insight estimates that the global installed base of active construction equipment (CE) OEM telematics systems reached almost 1.8 million units in 2016.

Growing at a compound annual growth rate (CAGR) of 21.3 percent, the active installed base is estimated to reach 4.6 million units worldwide in 2021.

This includes all CE telematics systems marketed by construction equipment OEMs, either developed in-house or provided by the CE manufacturers in partnership with third-party telematics players.

Berg Insight estimates that the European market accounted for almost 0.4 million active construction equipment OEM telematics systems at the end of 2016. The North American market is estimated to be slightly larger than the European. The Rest of World represents more than half of the global installed base of CE telematics systems provided by construction equipment OEMs.

Most major construction equipment OEMs have introduced telematics offerings for its customers either independently or in collaboration with telematics partners. OEM telematics systems are today commonly factory-installed as standard at least for heavier machines.

Berg Insight ranks Caterpillar and Komatsu as the leading construction equipment OEMs in terms of the number of CE telematics systems deployed worldwide. “The leading construction equipment manufacturers by market share are unsurprisingly also by far the top players when it comes to the number of OEM telematics subscribers”, said Rickard Andersson, Senior Analyst, Berg Insight.
He adds that this is a natural development in an industry where telematics has increasingly been included as standard with the machine purchase for quite some time, gradually covering more models and equipment categories.

Mr. Andersson continued:

“Caterpillar and Komatsu together account for more than one million telematics units today.”

Berg Insight chart: installed base of active construction equipment OEM telematics units 2016-2021Other key players include Japan-based Hitachi Construction Machinery and South Korea-based Hyundai Construction Equipment as well as JCB, Volvo CE and Deere & Company which are based in the UK, Sweden and the US respectively. South Korea-based Doosan Infracore, Liebherr based in Switzerland and CNH Industrial which is headquartered in the UK all have global installed bases of construction equipment telematics units in the low tens of thousands. “Notably, half of the top-10 OEMs have surpassed the milestone of 100,000 telematics units globally”, concluded Mr. Andersson.

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IoT Business News

Construction equipment telematics set to rise on building sites, says Berg Insight

Construction equipment telematics set to rise on building sites, says Berg Insight

As construction machinery manufacturers increasingly sell connected products, the building sector looks set to build a new image for itself as a technology enthusiast and embrace digitization. 

The construction industry has a reputation as a technology laggard, with dire repercussions for productivity and profitability.

Last year, researchers at strategy house McKinsey & Company singled it out as a sector “ripe for disruption”, calculating that large projects typically take 20 percent longer to finish than scheduled and come in 80 percent over budget. Worse still, productivity in the building industry has actually declined in some markets since the 1990s.

More digitization and the introduction of IoT technologies could do much to rectify the situation, McKinsey’s analysts say in their report, and this week there have been signs that the sector is starting to understand that. A report from Berg Insight forecasts healthy growth in the global installed base of construction equipment telematics systems, which reached 1.8 million units in 2016. By 2021, that number is set to reach 4.6 million units.

Read more: Dewalt powers ahead with IoT plans for construction workers

Towards telematics

Berg Insight’s report, The Global Construction Equipment OEM Telematics Market, covers all construction equipment (CE) telematics systems offered by equipment manufacturers, either built in-house or developed in partnership with telematics specialists. 

The European market accounted for almost 0.4 million units at the end of last year, with the North American market estimated to be slightly larger, and the rest of the world accounting for more than half of the global installed base.

“Most major CE OEMs [original equipment manufacturers] have introduced telematics offerings for its customers, either independently or in collaboration with telematics partners,” says Berg Insight’s report.

These are commonly factory-installed as standard, at least for heavier machines, it adds, with Caterpillar and Komatsu ranking as the leading OEMs in terms of the number of CE telematics systems deployed worldwide. These two companies together account for more than one million telematics units today, said Berg Insight analyst Rickard Andersson.

Read more: JCB uses IoT to control 10,000 construction machines

Other key players

Other key players include Hitachi Construction (based in Japan), Hyundai Construction Equipment (South Korea), JCB (UK), Volvo CE (Sweden) and Deere & Company (US). Smaller players include Doosan Infracore (South Korea), Liebherr (Switzerland) and CNH Industrial (UK).

“Notably, half of the top 10 OEMs have surpassed the milestone of 100,000 telematics units globally,” said Mr Andersson.

This is important, because these telematics systems can help construction firms locate equipment on busy building sites and assess their recent utilization and performance. Beyond that, the data collected can be used to detect maintenance requirements and send automated alerts for preventative maintenance.

In short, the construction industry has much to gain (and it seems, little to lose) by getting new insights into bulky and expensive machinery that firms typically hope to use for many years to come.

Read more: Clicks for bricks, Procore cements construction management software

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Internet of Business

Hitachi Construction Machinery to Use Iridium® for Delivering Global e-Service Across the Planet

Hitachi Construction Machinery to Use Iridium® for Delivering Global e-Service Across the Planet

New Agreement Expands Hitachi Construction Machinery’s Remote Construction Machinery Management Business and Grows Iridium’s Heavy Equipment Partner Network.

Iridium Communications Inc. today announced a new long-term agreement bringing the truly global coverage and reliability of the Iridium® network to Hitachi Construction Machinery world class Global e-Service construction machinery management system.

By integrating Iridium connectivity, Hitachi Construction Machinery’s Global e-Service will now be able to expand to regions and markets previously not possible. Together, Iridium and Hitachi Construction Machinery are making effective, reliable and truly global, construction machinery management possible for Hitachi Construction Machinery’s vast telematics customer base.

Hitachi Construction Machinery’s Global e-Service construction machinery management system provides customers with robust maintenance information to help companies control CO2 emissions, minimize idling times and monitor fuel consumption. Through this new agreement, Global e-Service customers will be able to easily access and transfer critical data, that convey key operational information, including but not limited to, daily operation hours, temperatures and pressures. Quake Global, a key Iridium hardware manufacturer, provides its Iridium satellite network-based product for Hitachi Construction Machinery to integrate Global e-Service with the network.

“At Hitachi Construction Machinery, we are committed to providing reliable and accurate asset management capabilities to our customers with our Global e-Service system,” said Toru Kurenuma, general manager, design department control system center at Hitachi Construction Machinery.

“Iridium’s network will afford us a new level of global connectivity that will help us grow our telematics business and expand our worldwide footprint.”

Iridium’s network is uniquely qualified for mobile telematics and serving the Internet of Things (IoT) beyond the reach of terrestrial networks, due to the inherent advantages it boasts. Iridium operates the only 100-percent global network comprised of interconnected LEO satellites. Due to its proximity to Earth in LEO, Iridium’s network delivers low-latency and reliable connectivity supporting critical business functions, like remote asset tracking, vehicle management and preventative maintenance. With constantly moving satellites that can communicate with each other, end users have access to enhanced reliability and connectivity, even in the most remote locations.

“Partnering with Hitachi Construction Machinery is a major milestone for Iridium’s IoT business,” said Tim Last, vice president and general manager, IoT at Iridium. “We are excited to work together in making reliable, satellite-based telematics solutions available to Hitachi Construction Machinery’s Global e-Service customers. Integrating with our network will allow Hitachi Construction Machinery to deliver improved performance and better coverage to its customers, helping expand their business into new regions previously not possible, due to lack of satellite coverage. When deploying business critical communications, such as those with Global e-Service, reliability is key, and we are the only network that can offer that level of dependability and connectivity.”

To date, Iridium IoT services are used by eight of the top 20 heavy equipment, original equipment manufacturers, and includes five of the top 10. As the satellite IoT market continues to grow through the increased adoption of satellite-enabled telematics solutions, the need for global and reliable solutions will increase, further establishing Iridium’s position as a leader in this space.

All Iridium IoT services are compatible with Iridium’s next-generation constellation, Iridium NEXT. The new constellation, which is currently being launched by SpaceX, will also enable Iridium Certussm, the Company’s state-of-the-art communications platform supporting a portfolio of critical communications solutions. Specifically, for Iridium IoT solutions, Iridium Certus will support faster speeds and higher throughputs, delivering an enhanced version of the low latency satellite connectivity it provides today.

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IoT Business News

Leveraging IoT based technologies at the construction jobsite

The Internet of Things is ubiquitous, disrupting every aspect of how we live, work and play. With smart home, for example, a home owner can communicate with their IoT-connected thermostat as they leave the office, ensuring that they can come home to a cool house on a hot summer afternoon. Now, homeowners can optimise air […]

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