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Connecting the Large Cycling Market: The Embryonic Market of Connected Bikes

July

Snaps #66

In the history of professional cycling there are famous images of heroic cyclists climbing the Alps and the Pyrenees carrying spare wheels over their shoulders and pushing their simple bikes up and over steep mountains. In recent years technology has changed cycling in many aspects; that almost mythological perception of cycling remains, however, and has driven the love of bikes and cycling.

The Unexpectedly Large Cycling Market

The bike industry is surprisingly large. According to COLIBI and COLIPED, the European associations of the bike and bike components industries, 19.7 million bikes were sold in Europe during 2012; The Netherlands, Germany and Great Britain are the largest markets. The market for Electric Power-Assisted Cycle (EPAC) is also growing steadily in Europe. In 2012, 854,000 EPACs were sold in Europe, at a 19.3% growth rate in comparison to 2011. The key markets for EPACs are Germany and the Netherlands. Europe is a small portion of the worldwide bike market. It is estimated that at the end of 2012, 133 million bikes were sold worldwide. The average selling price for bikes was €189. The total market size was around €25bn. China is the largest market worldwide.

Technology in Bikes – From Electric Bikes to Connected Bikes

These growth trends are not new. Since 2003, the average number of bikes sold in Europe has been about 20 million per year. Bikes are increasingly used in cities; bike sharing programmes have been developed in all the major European cities and bicycling has become a key transport medium for commuters. Cyclists continuously look for improving their bike experience, as well, confirmed by EPAC market trends. In 2006, only 98,000 EPACs were sold in Europe, the number growing continuously until reaching the above 854,000 in 2012. During the period of 2012-2014, as the bike industry focused its attention on the Internet of Things, the term “connected bike” appeared.

The concept was introduced at the end of 2012 by product development consultancy Cambridge Consultants. “The Connected Bike” is a standard bicycle equipped with an electronic gear-changing system to which a smartphone is mounted on the handlebars; automatic shifting is enabled by a Bluetooth Low Energy (BLE) connected smartphone “app.” A rider sets performance goals and the bike shifts accordingly, also shifting into a lower gear when a rider’s cadence slows.

Current Connected Bike Product Concepts

Cambridge Consultants’ idea has been followed by a number of product concepts. Some of these are under development using crowdfounding. Helios Bars, currently on Kickstarter, are handlebars that can be installed on bikes. They include a GPS tracker, Bluetooth Smart for connecting to a smartphone, rear LEDs, and a powerful CREE LED headlight. The solution also includes mobile applications for data visualization and navigation. Smart Wheel is also on Kickstarter. Here, the idea is to substitute an intelligent rear wheel for gears. The wheel is connected to a smartphone using BLE. As with Helios Bars, the solution also includes mobile applications. Vanhawks Valour is another Kickstarter funded concept bike. These connected carbon fibre bicycles are designed around three priimary objectives: Ensuring personal safety, improving the cycling experience, and anti-theft solutions. The Valour uses BLE to communicate with a smartphone and includes sensors to detect specific riding conditions such as distance from other vehicles. The Valour also gathers road data, used to identify the perfect routes and alert the cyclist to potential issues.

A different approach is used by the Chinese car manufacturer Qoros. They launched eBIQE, a cloud based connected electric bike, at the Geneva Motor Show in 2014. The eBIQE is always connected through 3G cellular technology to the Qoros Cloud Platform as well as a touchscreen mounted on the handlebar. Available applications include navigation and security.

The Early, but Promising, Life of Connected Bikes

The connected bike market is in a very early stage of development. However, considering the size of the bike market, the business potential is strong, particularly in countries such as China. Connected bikes can improve cyclists’ experience through the following three sets of applications:

• Anti-theft solutions, which can also lead to new forms of insurance;

• Real-time info and alerts about routes and road conditions; and

• Empowering safety through the use of sensors and data.

Sensors, data analysis, and software application development are key to the connected bike concept. Cyclists can also use wearable devices for interacting with their bike, while embedded SIMs can empower the security features of the bikes and enable an always on connection between the bikes and cloud-based services.

The time of the heroic climbers of Alps and Pyrenees might be over, but the popularity of cycling and bikes continues to increase, worldwide. Cyclists – amateurs, professionals, and commuters – familiar with smartphones and the Internet of Things – seek to improve their cycling experience and connected bikes can help them accomplish this. Initially, connected bikes will impact the high-end segment of the bike market – the Vanhawks Valour costs $1,144 -- but then move to other segments, most rapidly in China. It will not be long before connected cyclists over peddling over Les Deux Alps!

Saverio Romeo, Principal Analyst
Beecham Research, Ltd.


Beecham Research M2M Blog at m2mapps

Recent posts:

July 23, 2014: LTE and Internet of Things: Moving Closer Together?
July 9, 2014: The Future’s Bright for Business Use of Wearable Technology

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