Growth Agents
In the upcoming years, it is anticipated that increased use of cutting-edge technologies and the introduction of new technologies with enhanced user interfaces will aid in market expansion. The expanded use of the ADAS function will also contribute to the expansion of this software market. During the projected period, the rising use of artificial intelligence will show to be beneficial for the market’s expansion. The market is anticipated to develop further due to the advent of 5G technology.
Artificial intelligence is used in autonomous as well as semi-autonomous vehicles. The revenue in the automotive sector has grown to a great extent as many opportunities are provided to the stakeholders due to the increased use of software in the automotive’s. The demand for connected cars has also increased in recent years and provided major growth opportunities. Autonomous driving is another feature that is in great demand, and this will also provide major opportunities for the growth of the market in the coming years and provide larger revenues to the market players.
Various Market Factors
Demand for connected automobiles is rising as a result of the use of sophisticated software systems to control the whole operation and handling of the vehicle, as well as aid from artificial intelligence. This market category has seen a significant increase in demand. When the economy is predicted to grow even more, this has become a key factor in the growth of the automotive software business.
The emergence of new market participants: Several new market participants have appeared in the automobile industry because of the introduction of the electric segment, which has recently experienced extremely high demand.
The demand for better, more user-friendly software has increased as a result of a significant increase in the number of people choosing the technologically advanced alternatives offered in the automotive industry.
Principal Market Obstacles
Lack of infrastructure development – Compared to the progress the automotive sector once achieved, infrastructure development is more slower today. This is causing a chasm between the two industries, which should be working together to take full advantage of the market. A better infrastructure that links intelligently with the system and offers seamless service to the end user is required via the use of smart technologies and systems. The absence of cutting-edge infrastructure significantly slows market expansion.
Limited connectivity – Key market participants have created advanced navigation systems and applications in response to the rising demand seen in the market. A reliable Internet connection is necessary to enable these improvements and ensure the system runs smoothly. The expansion of the automotive software market has been significantly constrained by the lack of advancement in the realm of Internet connectivity. These variables have come to light as the most difficult ones for market expansion.
The aforementioned sum does not account for the software value that is a part of the automobile buyer’s pricing. The following table includes some projections for 2020 and 2030 estimations. Due to the wide variety of electronics that are sold with each car, the estimations have wide variances. Although the prediction for 2030 is hypothetical, the trend is undeniable—more software value per automobile will persist for a very long time.
The software royalties that are paid for different software utilized in ECUs are listed on the bill of materials (BoM). Software royalties for a typical car are predicted to be between $150 and $300 in 2020 and $250 to $500 in 2030.
According to projections, the price of software development for a typical car will go from $500 to $900 in 2020 to $900 to $1,500 in 2030. Included in this are the software supply chain’s current value estimates.
The auto OEMs still incur software expenditures for bug repairs, software maintenance, and recalls during the ownership or use phases of the automobile. The estimated costs are $150–450 in 2020 and $250–650 in 2030. This segment’s growth is likely being slowed by the rising use of OTA.
The overall cost range for these three groups is expected to increase from $800 to $1,650 in 2020 to $1,400 to $2,650 in 2030. The OEM has assessed the average car’s lifetime software cost in the United States.
Estimating the price of the hardware required to execute the software, often known as the software free ride on hardware. It has a range of $4,000–$9,000 for the electronics hardware in the automotive segments for 2020. In 2030, it’s anticipated that hardware expenses for electronics would increase to $7,000–$15,000. The significant growth by 2030 can be attributed in large part to the addition of ADAS and AV technology.
Conclusion
Numerous automakers have taken extreme action to boost performance after realizing the advantages of vehicle software development. Some businesses intend to increase their software capabilities and hire thousands of software engineers over the coming years. Others develop global centres of excellence, partner with other organizations, and reinvent their governance models.
The fundamental operating paradigms for software development need to be updated by automakers. The majority of automakers still haven’t advanced their software engineering methods as much as leaders in other industries have. Concerns exist in the fields of automated testing, agile methodologies, and continuous integration. The industry will be won by the automotive leaders who draw in the greatest personnel and organize their businesses to foster innovation. So, finding and managing personnel well is crucial for success.
