The recent news that Qualcomm is in talks to acquire NXP semiconductors, which has sent the Dutch electronics company's stock up more than 24% in two days, confirms that connected cars will be one of the most important markets for the electronic industry in the next few years.
NXP is making most of its sales from the automotive; secure identification solutions; and secure interface and infrastructure sectors, which represent 72% of the total revenue of the company. NXP is, after last year's acquisition of Freescale, the biggest provider of car electronics.
Technology, and the change of demographics in the twenty-first century, will make connected cars and automated mobility services the next big business for hardware manufacturers, more than computers and smartphones.
Google's fleet of self-driving cars
Just this week, car manufacturers and technology mobile players have created the 5G Automotive Association, to develop together solutions for autonomous vehicles using connected technologies, such as Cellular Vehicle to Everything (C-V2X) communication.
The association, initially formed by global vendors Ericsson, Huawei, Nokia and Qualcomm, technology firm Intel and automobile giants Audi, BMW and Daimler, aims to provide an alternative to rivals such as Apple, Google, Lyft, and Uber, who are working intensely to launch driverless mobility services in the next three years.
Recently, analyst firm Gartner has forecasted that the production of connected cars will grow exponentially in the next few years, reaching nearly 61,000 cars per year in 2020, a ten-fold increase from 2015.
Cities need a new mobility ecosystem
In 30 years the majority of the world's population will live in cities, creating a huge mobility challenge. In developing countries, especially, urban population growth will be so massive public transport infrastructure won't be able to keep up.
Cities may be able to absorb more people, but not more cars. Deploying more mass transit services will reduce the problem, but personal transportation will still be necessary. That's why ride-sharing autonomous cars, which can be used many times during the day by different passengers, will substitute for most car ownership, as we know it.
Cities are already reducing road and parking space for cars. Recently my hometown of Barcelona installed the first "superblock", a square area of nine city blocks, that eliminates over 60% of parking spaces within the area and changes traffic direction to prevent any through traffic. And Barcelona is a compact city where only 24% of mobility is by passenger car. San Francisco, by contrast, has almost triple the number of individual, polluting cars -- 64% -- while being home to Uber, the biggest ride-sharing firm.
As cities become less car friendly by necessity and their populations increase, more people will consider living without a car. Many millennials are already following that trend, and the percentage of young people delaying getting a driver license, once considered a rite of passage, is rapidly increasing.