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The automotive software market size is estimated to grow by USD 12,754.64 million between 2022 and 2027. The market size is forecast to increase at a CAGR of 9.25%. The growth of the market depends on several factors, including the growing demand for differentiated in-car experiences, the introduction of infotainment systems, and the integration of advanced safety technologies in luxury cars. It is a set of instructions that enable the user to interact with the underlying in-vehicle hardware as well as perform control functions in a vehicle.
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The growing demand for differentiated in-car experiences is driving growth in the market. The global automotive industry is experiencing rapid changes in dynamics, whether it is from the buyer's end or the supplier's perspective. The Global Market is highly competitive due to advances in technology and an increase in the penetration of electronic components in vehicles. The digital services provided by automotive OEMs in modern vehicles, such as telematics services, are based on the cloud platform.
Moreover, it also allows automotive original equipment manufacturers to accelerate the deployment of Autonomous Cars by integrating Cloud Mapping technology into their vehicle mapping systems. The development of a unified cloud infrastructure supports various applications, such as simulation tests for new deployments, offline deep-learning model training, and HD map generation. This enhances both vehicle performance and scalability. The OEM also cooperates with car software suppliers due to the increased demand for technical improvements in vehicles. The growing partnerships among vendors will propel the global market during the forecast period.
The over-the-air (OTA) updates for software components is a primary trend in the market. Electronic components of cars are increasing exponentially over the last few years. This is due to the increased installation of driver assistance and safety features in automobiles. The most important part of a car today is electronics hardware and software. Due to the increased number of ECUs and program implementation, there is a growing need for software updates in cars. As the number of connected devices increases, it may not be cost-effective for OEMs to provide software updates via their dealers.
Moreover, a few automobile manufacturers like Tesla Motors have already implemented OTA updates in their automobiles. In addition, OTA updates are planned to be rolled out by some of the largest OEMs such as BMW and Daimler. This feature can act as a product differentiator for many OEMs owing to the enhanced user. The company aims to provide a software-reliant system, component updates for connected vehicles, and expand its Airbiquity OTA software to additional connected device segments. Such initiatives are expected to drive the growth of the market focus during the forecast period.
The hacking and data security issues in the space are a challenge in the market. Automotive telematics applications in IVI use wireless communication systems that are prone to hacking and theft of information. Internet connectivity is available in these modern systems, along with real-time updates and information. Accessing such information may, however, give rise to a breach of confidentiality and an increase in the risk of malware. In addition, the primary concern is the passage of malware through IVI systems to other in-car networks such as controller area network (CAN) bus. The malware may have connected in-car entertainment and information systems to the car's vital functions.
Moreover, other security vulnerabilities arise from the insertion of multiple web applications and connecting Bluetooth in automobiles. These applications provide access to social media applications and personal contacts. User information may be compromised by any unauthorized access to applications and personal data, such as passwords and usernames, which may lead to personal information losses.
The market share growth by the safety system segment will be significant during the forecast period. Due to legislation that mandates their installation in automobiles, there has been an increasing demand for safety systems on vehicles. Some of the regulatory mandates are in order to reduce back-over incidents, the National Highway Transportation Safety Authority (NHTSA) of the US.
Get a glance at the market contribution of various segments
The safety segments showed a gradual increase in the market share of USD 5,338.23 million in 2017 and continued to grow by 2021. Increasing concern about safety and comfort among vehicle buyers and governing bodies is driving the adoption of these advanced safety features in new-generation vehicles. The adoption of these safety technologies has been significantly increased by developed regions, like North America and Europe, which is anticipated to drive the demand for automotive safety system software during the forecast period.
Moreover, there has been an increasing demand for infotainment systems in the mid-segment and mass-produced segment, which was earlier limited to premium vehicles. The growth of the middle class in developing economies, such as India and China, is a key reason for changing consumer preferences. As a result of sustained economic growth, these economies have seen an increase in disposable income. Hence, there has been an increased demand for luxury and premium vehicles with high-end infotainment systems. The increased adoption of in-vehicle infotainment systems and telematics solutions is driving the demand for associated software.
The application software segment will account for the largest share of this segment. Nowadays vehicles are able to house a couple of OS due to the multiplied adoption of rear-seat infotainment structures and technological advances inside the system-on-chip (SoC) industry. Although many vehicles use the same installed automotive-grade Linux variant OS for both controls as well as infotainment functions, the demand for systems capable of housing twin OS will gain traction during the forecast period due to the strong growth in the luxury vehicle segment. Original equipment manufacturers (OEMs) are partnering with other technology providers and platform providers to develop self-driving cars, which will also drive the growth of the application software segment of the global market during the forecast period.
Middleware is a very crucial part of any computer system as it is the only component that enables the OS to recognize other input and output devices. Without middleware, the whole system will be crippled. This segment is expected to witness robust growth due to the increased electronics content in automobiles (The increase in ECUs will influence the embedded software market as each ECU is programmed with embedded software), Rising demand for driver assistance systems, and the middleware in infotainment systems. Thus, the rising demand for infotainment systems will also influence the automotive middleware market.
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APAC is estimated to contribute 40% 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 growth of the market in APAC will outpace the growth of the market in Europe and North America during the forecast period. Although adoption rates for ADAS and IVI systems are still low, the market is expected to show strong growth over the forecast period. This is attributed to the growing demand for IVI systems and shifting consumer preferences toward passenger safety in emerging markets such as India, China, Thailand, and Indonesia.
The Market industry 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 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.
Access Co. Ltd. - The company offers such as NetFront Browser BE is an advanced HTML5 solution that provides In-Vehicle Infotainment platforms with a comprehensive platform to offer services via standardized HTML5 rather than operating system-specific binaries or applications.
Airbiquity Inc. - The company offers such as OTAmatic Software Management Platform to receive remote over-the-air software updates and transmit diagnostic and operational data from onboard systems and components.
Alphabet Inc. - The company offers automotive software through its subsidiary Google such as Android Automotive OS is an infotainment platform built into cars by car makers.
The research report also includes detailed analyses of the competitive landscape of the market and information about 15 market players, including:
Qualitative and quantitative analysis of vendors 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 vendors as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize vendors as dominant, leading, strong, tentative, and weak.
The Market is propelled by advancements in body control, comfort, and Advanced Driver Assistance Systems (ADAS), catering to connected car services and innovative technologies. Standard protocols and connected infrastructure enable troubleshooting and maintenance, enhanced by Artificial Intelligence (AI) and predictive capabilities. Vehicle connectivity, IoT devices, and voice commands improve user interfaces, while data monetization drives revenue opportunities. From semi-autonomous to autonomous vehicles, the technology supports various autonomy levels and in-vehicle electronics architectures, with leading OEMs and mobility players investing in ADAS and infotainment systems.
Regulatory developments and changing consumer behavior underscore the importance of crash-avoidance technology and self-driving car features, leveraging radar sensors, parking sensors, and cameras for safety and stability controls. Tier 1 companies and software development vendors collaborate with Internet-of-Things technology providers like Aeris and Dealer-FX to drive innovation and meet evolving market demands, particularly in regions like Asia-Pacific and LAMEA.
The market report forecasts market growth and forecasting by revenue at global, regional & country levels and provides a market analysis and report of the market growth and trends opportunities from 2017 to 2027.
Automotive Software Scope |
|
Report Coverage |
Details |
Page number |
177 |
Base year |
2022 |
Historic period |
2017-2021 |
Forecast period |
2023-2027 |
Growth momentum & CAGR |
Accelerate at a CAGR of 9.25% |
Market growth 2023-2027 |
USD 12,754.64 million |
Market structure |
Fragmented |
YoY growth 2022-2023(%) |
8.56 |
Regional analysis |
APAC, Europe, North America, South America, and Middle East and Africa |
Performing market contribution |
APAC at 40% |
Key countries |
US, Canada, China, Japan, and Germany |
Competitive landscape |
Leading Vendors, Market Positioning of Vendors, Competitive Strategies, and Industry Risks |
Key companies profiled |
Access Co. Ltd., Airbiquity Inc., Alphabet Inc., Bittium Corp., BlackBerry Ltd., Elinext IT Solutions Ltd., Green Hills Software LLC, Hitachi Ltd., Information Technologies Institute Intellias LLC, Intel Corp., KPIT Technologies Ltd., Microsoft Corp., NVIDIA Corp., NXP Semiconductors NV, Renesas Electronics Corp., Robert Bosch GmbH, Samsung Electronics Co. Ltd., Schaeffler AG, Siemens AG, and Sigma Software |
Market dynamics |
Parent market analysis, Market forecasting, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and Market condition analysis for the forecast period. |
Customization purview |
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