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The connected rail solutions market size is estimated to grow at a CAGR of 5.9% between 2023 and 2028. The market size is forecast to increase by USD 38.12 billion. The growth of the market depends on several factors, including increasing adoption of technologically advanced connected devices, digital transformation in railway industry and developments in railway infrastructure. Connected rail solutions are used to collect data essential for understanding the events occurring in the railway industry, including train tracking, guiding, and communication. The users of connected rail solutions gather data to improve productivity, increase the safety of trains and passengers, and ensure efficiency in railway operations. Connected rail solutions integrate capabilities from multiple preoperatory networks in railway operations into new converged Internet Protocol (IP)-based network infrastructure. These solutions provide resilient infrastructure to deliver numerous services, such as onboard safety and security (including video surveillance), entertainment services, and passenger information display and collection and establish real-time communication between various entities of railway systems and end-customers of railways.
This connected rail solutions market report extensively covers market segmentation by safety and signaling system (CBTC, PTC, and ATC), deployment (on-premises and cloud-based), and geography (Europe, APAC, North America, Middle East and Africa, and South America). It also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report includes historic market data from 2018 - 2022 .
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Increasing adoption of technologically advanced connected devices is notably driving the market growth. Globally, smartphone sales have increased rapidly in the past three years, and end-users prefer technologically advanced mobile devices for both personal and professional use. The high adoption of connected devices among individuals encourages railway operators to adopt advanced devices that can connect railway operations and end customers. The growth in the number of connected devices across the globe is a significant factor that encouraged railway operators to incorporate connected rail solutions in their operations. Technological advances and the increasing adoption of various technologies by end-users are boosting the adoption of electronic content in commercial railways.
Moreover, government regulations are forcing the deployment of minimum levels of advanced driver-assistance systems (ADAS). Such developments are increasing the number of trains embedded with software and hardware to enable compatibility with communication systems. The presence of a conducive technology environment or platform that enables the viability of connected rail solutions will drive connected rail solutions market growth during the forecast period.
IoT integration powered by AI technology in the railway industry is an emerging trend shaping the market growth. The development of connected trains will also support the development of IoT, which is a network created by physical devices, such as smartphones, other transportation vehicles (such as cars, ships, and flights), and other items embedded with network connectivity, including actuators, sensors, software, and electronics, to communicate with each other. The modern design of railcars uses the Design for Six Sigma (DFSS), along with the Theory of Inventive Problem Solving (TRIZ), which helps in reducing errors in the process and ensures maximum quality of products. The TRIZ and DFSS combination helps designers understand many design trade-offs that require compromises in conflicting decision management.
However, this will increase the weight of railcars, reducing their ability to carry loads and decreasing fuel efficiency. The TRIZ solutions use structural designs to provide crash protection with superior performance and less weight. Similarly, the DFSS helps in checking the design function separately, ensuring there is a zero or minimal error in the process. Hence, the DFSS and TRIZ will ensure efficient and better railcar designs in the future, which will drive the growth of the global connected rail solutions market in the new and advanced rolling stock manufacturing during the forecast period.
Reluctance to adopt new systems is a significant challenge hindering market growth. The global railway industry has not been an active adopter of advanced technologies, and it still uses some of the traditional processes. Employees who use traditional methods of document handling are reluctant to move toward electronic record management solutions due to the possibility of downtime and the requirement for additional training. System reliability is challenged by users, which determines the acceptance level of new systems by users. Sensors and communication systems that deliver railway process automation need to be tuned accurately to avoid false positives. Improper tuning of communication systems can create unwanted stoppages of critical operations in trains. The technology is tuned to generate only high-risk alerts.
Therefore, electronic system manufacturers need to consider such consequences to deliver solutions in line with user expectations. In addition, a shallow talent pool at training and dealer sites may emerge as a global concern among first-time users of such new technologies, which may restrict the growth of the market during the forecast period. Hence, the reluctance of railway operators to adopt new systems will hinder the growth of the global connected rail solutions market during the forecast period.
The market share growth by the CBTC segment will be significant during the forecast period. The increasing use of CBTC solutions for rail route management and infrastructure control in railways is driving the growth of this segment. CBTC is a type of railway safety and signaling system that tracks the location of trains using satellite and location-based technologies. This system also manages the time interval between trains or metros traveling on the same line, which helps in increasing the safety of trains and passengers traveling in them.
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The CBTC segment was the largest and was valued at USD 43.22 billion in 2018. The growth of freight car logistics is the major factor accelerating the growth of this segment. The increasing use of railways for goods transportation and the growing requirement for smart logistics systems from rail logistics service providers and their end customers are driving the adoption of the CBTC safety and signaling system. The rapid rise of rail freight transportation is due to the environmental sustainability of rail transportation. Compared with other modes of transportation, rail freight transportation produces lower negative environmental impacts, and it is 55% more fuel-efficient than other modes of transportation. The rise in rail freight logistics across the globe is expected to boost the requirement for smart and connected rail solutions, which will drive the growth of the global connected rail solutions market through the CBTC segment during the forecast period.
On-premises solutions focus on leveraging advanced technologies to enhance operational efficiency, passenger safety, and overall rail network management. On-premises deployment refers to the installation and utilization of connected rail solutions within the rail operators' infrastructure, allowing them to have direct control and management of the systems. However, on-premises deployment also presents challenges such as higher upfront costs, the need for dedicated IT infrastructure and expertise, and potential limitations in terms of scalability and agility compared to cloud-based solutions. These factors must be taken into account while considering the deployment strategy in the global connected rail solutions market. However, the growing popularity of cloud-based solutions will slow down the growth of the on-premises segment of the global connected rail solutions market during the forecast period.
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APAC is estimated to contribute 32% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. The railway is a significant medium of transportation in Europe, where several countries are linked to each other through rail networks. According to the Community of European Railway (CER) and Infrastructure Companies, around 9.5 billion passengers are transported by railways in Europe every year. Europe has several major companies with a presence in the railway transportation sector, such as ALSTOM, Siemens, and Thales. The region has also been a frontrunner in adopting advanced systems for railway transportation. From the technology aspect, the railway industry in Europe has evolved significantly due to the growing adoption of IoT.
In the past three years, railway operators and government agencies in different countries in the EU have developed digitalization programs. The initiatives and solutions proposed through such programs, such as the Shift2Rail, PPP, and UIC Digital Platform, have been promoting the digital transformation of railways on a large scale. Such factors are expected to drive the market growth during the forecast period.
In 2020, the railway industry faced a severe setback owing to the spread of COVID-19 in Europe. However, with government relief packages, the railway industry recovered its revenue losses to a certain extent in 2022. Several railway projects are expected to commence and the market start recovering. Such factors are expected to drive the regional market growth during the forecast period.
The Connected Rail Solutions Market report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Global Connected Rail Solutions Market Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
ABB Ltd. - The company offers connected rail solutions such as traction systems and products for rolling stock, abb ability, control and signaling, and traction power supply.
ALSTOM SA - The company offers connected rail solutions such as Iconis security, rolling stock, and interlocking 4.0.
Atos SE - The company offers connected rail solutions such as Gsm R solution, network rail private cloud, and Lifelink critical communication solutions.
The research report also includes detailed analyses of the competitive landscape of the market and information about 20 market companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The connected rail solutions market report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2018 - 2022.
Connected Rail Solutions Market Scope |
|
Report Coverage |
Details |
Page number |
181 |
Base year |
2023 |
Historic period |
2018 - 2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 5.9% |
Market Growth 2024-2028 |
USD 38.12 billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
5.44 |
Regional analysis |
Europe, APAC, North America, Middle East and Africa, and South America |
Performing market contribution |
APAC at 32% |
Key countries |
US, China, Japan, UK, and Germany |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
ABB Ltd., ALSTOM SA, Atos SE, CalAmp Corp., Cisco Systems Inc., Digi International Inc., General Electric Co., Hitachi Ltd., Huawei Technologies Co. Ltd., Indra Sistemas SA, Mitsubishi Electric Corp., Nokia Corp., Robert Bosch GmbH, Schneider Electric SE, Siemens AG, Sierra Wireless Inc., Thales Group, Toshiba Corp., Trimble Inc., and WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORP. |
Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for the forecast period |
Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this market research report to meet your requirements.
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Safety and Signaling System
7 Market Segmentation by Deployment
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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