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.