Sep. 5.16 | About: Verizon Communications (VZ)
Verizon's acquisition of Telogis and Fleetmatics is making more sense today.
Growth in telematics segment can be huge by 2020.
Verizon will probably destroy the competition.
Verizon Communications (NYSE: VZ) is an industry leader, with a
fat dividend yield and a strong balance sheet. The company has been pushing the
boundaries in technological advancement for years, and I believe it may be
looking for an absolute kill in the next big growth market: Internet Of
Verizon's IoT technology sees significant traction in its
telematics segment. In Q2 earnings call, the company revealed that its revenue from
IoT grew 25% to $205 million (yoy), led by strong demand for telematics product,
Verizon Telematics, a subsidiary of Verizon, has a fleet
management solution called NetworkFleet.
I have reasons to assert that after its acquisition of Telogis and Fleetmatics (NYSE: FLTX), the company may be staring
at billions of dollars in potential future revenues. Verizon has already become
the largest fleet management solution provider worldwide.
According to a research report on Connected CarTech, the
commercial telematics market is set to grow from $20.42 billion in 2015 to
$55.14 billion by the end of 2021, at a CAGR of more than 18% between 2016 and
Commercial applications of telematics can be seen in
infotainment, insurance, fleet/asset management, satellite navigation,
tele-health solutions, and others including emergency warning systems. Of these,
fleet and asset management occupies a significant 28% market share, as of 2015.
Transporation and logistics segment dominated with a market share of 54%. Other
industries are expected to witness strong growth too.