OBD Dongles: The Next Big Consumer Electronics Market?

Ludovic Privat

There is a lot of discussion about OBD dongles these days: do they create issues to the car (warranty, liability)? do they suck battery life? what kind of data do they really provide? etc… All of that is interesting but frankly the whole opportunity is lying beyond pure engine data. Let me explain why.

The OBD port - and a dongle connected to it - offer many business advantages.

First, it can be self-installed, which means sold off-the-shelves everywhere: e-commerce, big box retailers, etc. not only at a dealership or a repair shop, unlike products that require a professional installation.

Second, it is self-powered: it does not need to be recharged and can stay on its port for years.

Third, it is working 24/7 once installed. Unlike a standalone app that is often buried within tens of apps and forgot about in a matter of weeks, the OBD dongle will record 100% of car usage.

Fourth, it can easily communicate with a cloud through Bluetooth, Wi-Fi and a consumer smartphone data plan, or directly via its own embedded wireless modem.

Fifth, this is rather inexpensive to manufacture.

OBD Dongles: The Next Big Consumer Electronics Market?
Last but not least, this is hardware. In a world of digital services increasingly disrupted by the app store model where the pricing trend is towards free - freemium at best - hardware offers a physical, identified value for the customer which means a price - and therefore margins for the vendor - in addition to in-store visibility, branding, etc. It is obviously more complex to operate as a hardware company but surely more profitable as a long term business.

This is already a lot, even without car data or with only minimum engine data from the dongle. And based on MEMS inertial sensors that might be embedded in the dongle you can identify and reconstruct a lot of information: gear changes, idle time with engine on, etc.

But even without engine data, if you think about car location and movements, historical data, driving patterns and behaviors, plus the many sensors embedded in the phone, all of that offers zillion possibilities for new services and monetization. This can be either through a direct service offered to the driver based on his car data, or indirectly through big data processing of a fleet of cars to offer both B2B or B2C information: fleet patterns, real-time traffic service, free parking spot location, etc.

Market opportunity
Therefore we forecast that OBD dongles will be a cornerstone of many new start-up and probably create a consumer electronics market segment that is on par with what Personal Navigation Devices were 5 years ago.

Continued...

The market potential is huge because it can address pretty much all cars currently on the road.

Obviously the biggest competition to OBD dongle are connected cars themselves. But even if (natively) connected cars represent 50% of all car sold in five years, there is a decade of business ahead for OBD dongles and services vendors, and probably longer in developing economies where connected car adoption will be lower.

To learn more on this topic, join us at the ConnecteDriver conference in Brussels, on January 28-29, 2015. We are hosting several presentation on this topic as well as a panel discussion with OBD market pioneers coming from Europe, US and Australia.


Comments (3)
1. Marcelo Debeza on 01/27/2015 3:09 PM
Hi
I had the oportunity to test these devices and I think that the application is very limited.
Not all car manufacturers provide the same information and the OBD port is not easily accesible in all the cars. For example, I ran tests in an Honda Civic, Peugeot 206, and VW Passat.
The best results come from the Honda, the connector is under the dashboard, not visible and provide a lot of information from the engine.
In the Passat rans good as well but with less information and the OBD is exposed in the central dashboard
In the 206 was practically imposible, no information was reported, and to install it you have to remove a cover, and all the fuses were exposed.
In my opiniont is only appicable for a limit market and specific use

Regards
Marcelo
2. Robert Vogt on 01/29/2015 1:29 AM
Size is key. Our new cellular OBD unit only adds 15mm to the port. We have Bluetooth versions down to 3mm. Also many of these devices have an extremely limited feature set and weak communications capabilities (limited to legislated protocols and data
3. María Paz Gillet on 02/14/2015 9:06 PM
I agree that people is interest in this kind of conecting car services.

As a example I can told that my latinamerican company Jooycar.com post in Facebook 2 weeks a presale message and we got 600 registers only in Chile asking for buying.
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