Growth Opportunities for In-Vehicle Software Spending

Growth Opportunities for In-Vehicle Software Spending

Industry Convergence between Consumer Electronics, IT, and Automotive Players to Create Major Value Add for Nearly Half of All Vehicle Software in Use

RELEASE DATE
26-Oct-2023
REGION
North America
Deliverable Type
Market Research
Research Code: PF1D-01-00-00-00
SKU: AU_2023_262
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Description

Original equipment manufacturers (OEMs) used to differentiate their products based on mechanical features. Today, however, consumers increasingly want features defined by software, such as driver assistance, connectivity, and comfort-convenience services. The convergence of technology areas including electrification, autonomous driving, shared mobility, and connectivity is causing OEMs to migrate from the traditional hardpoint-defined architecture to a software-oriented architecture. These trends are reshaping customer expectations and forcing OEMs to address them in new-generation vehicles, thereby turning vehicles into software on wheels.

Similar to the mobile phone industry, the automotive industry is experiencing a sort of rebirth. Increasingly, industry participants are spending more R&D budget on software development and turning themselves into software companies. OEMs will deploy different strategies to develop proprietary software based on their capabilities, some developed in-house and others co-developed with partners.

This study includes research, analysis, forecasts, and an overview of industry spending on in-vehicle software development. It aims to provide an overview of trends impacting software development and a discussion on the impact these trends have on the growth, deployment, and R&D strategies of different OEMs, suppliers, and industry stakeholders.

Author: Manish Menon

Table of Contents

Why Is It Increasingly Difficult to Grow?

The Strategic Imperative 8™

Impact of the Top 3 Strategic Imperatives on the In-vehicle Software (SW) Industry

Growth Opportunities Fuel the Growth Pipeline Engine™

Scope of Analysis

Key Competitors

Segmentation

Major Trends Impacting SW Development in the Automotive Industry

SW Development Trends in the Automotive Industry

The SW Life Cycle in the Automotive Industry

SW Development Value Chain and Ecosystem

SW Categorization by Value Creation

Automotive R&D and In-vehicle SW Spending Market Snapshot

Comparative Analysis of OEM SW Development Strategies

OEM Benchmarking

SW Development Takeaways for OEMs

Comparative Analysis of Tier I Suppliers

Main Takeaways for Tier I and SW Engineering Players

Key Takeaways

OEM Approaches to SW Development

Strategy 1: Outsourced/Co-developed SW Development

Strategy 2: In-house SW Development

Tier I Approach to SW Development

Cooperative SW Development Consortia

Cooperative SW Development Consortia (continued)

Shift in Value Chain

Key Growth Metrics

Global Automotive Revenue and Unit Shipment Forecast

Global Automotive R&D Spending & In-Vehicle SW Spending Forecast

Global In-vehicle SW Spending by Domain

Global In-vehicle SW Spending: Powertrain

Global In-vehicle SW Spending: ADAS and AD

Global In-vehicle SW Spending: Connectivity (Plus Cybersecurity)

Global In-vehicle SW Spending: Body, Comfort, and Convenience

Global In-vehicle SW Spending: Others

Global Average In-vehicle SW Spending per Vehicle

In-vehicle SW Strategy and Spending: BMW Group

In-vehicle SW Strategy and Spending: Ford Motor Company

In-vehicle SW Strategy and Spending: GM

In-vehicle SW Strategy and Spending: Honda Motor Co., Ltd.

In-vehicle SW Strategy and Spending: Hyundai Motor Group

In-vehicle SW Strategy and Spending: Mercedes-Benz Group

Case Study: Mercedes-Benz MBition

In-vehicle SW Strategy and Spending: RNM Alliance

In-vehicle SW Strategy and Spending: Stellantis

Case Study: Stellantis SW Center

In-vehicle SW Strategy and Spending: Toyota Motor Corp.

Case Study: Woven

In-vehicle SW Strategy and Spending: VW Group

Case Study: VW Group’s CARIAD Division

In-vehicle SW Strategy and Spending: Volvo Cars

In-vehicle SW Strategy and Spending: Aptiv PLC

In-vehicle SW Strategy and Spending: Bosch

In-vehicle SW Strategy and Spending: Continental AG

In-vehicle SW Strategy and Spending: DENSO Corporation

In-vehicle SW Strategy and Spending: Hyundai Mobis

In-vehicle SW Strategy and Spending: Magna International

In-vehicle SW Strategy and Spending: ZF Friedrichshafen AG

SW Engineering Players: BlackBerry Ltd.

SW Engineering Players: EB

SW Engineering Players: Green Hills Software

SW Engineering Players: Red Hat Inc.

SW Engineering Players: Wind River Systems

Growth Opportunity 1: OEMs Becoming SW Organizations

Growth Opportunity 1: OEMs Becoming SW Organizations (continued)

Growth Opportunity 2: Pure-play SW Companies Helping Automakers Develop Technological Expertise

Growth Opportunity 2: Pure-play SW Companies Helping Automakers Develop Technological Expertise (continued)

Growth Opportunity 3: Decoupling HW and SW for Recurring Revenue Generation

Growth Opportunity 3: Decoupling HW and SW for Recurring Revenue Generation (continued)

Your Next Steps

Why Frost, Why Now?

List of Exhibits

List of Exhibits (continued)

List of Exhibits (continued)

Legal Disclaimer

Original equipment manufacturers (OEMs) used to differentiate their products based on mechanical features. Today, however, consumers increasingly want features defined by software, such as driver assistance, connectivity, and comfort-convenience services. The convergence of technology areas including electrification, autonomous driving, shared mobility, and connectivity is causing OEMs to migrate from the traditional hardpoint-defined architecture to a software-oriented architecture. These trends are reshaping customer expectations and forcing OEMs to address them in new-generation vehicles, thereby turning vehicles into software on wheels. Similar to the mobile phone industry, the automotive industry is experiencing a sort of rebirth. Increasingly, industry participants are spending more R&D budget on software development and turning themselves into software companies. OEMs will deploy different strategies to develop proprietary software based on their capabilities, some developed in-house and others co-developed with partners. This study includes research, analysis, forecasts, and an overview of industry spending on in-vehicle software development. It aims to provide an overview of trends impacting software development and a discussion on the impact these trends have on the growth, deployment, and R&D strategies of different OEMs, suppliers, and industry stakeholders. Author: Manish Menon
More Information
Deliverable Type Market Research
Author Manish Menon
Industries Automotive
No Index No
Is Prebook No
Keyword 1 In-Vehicle Software Spending Analysis
Keyword 2 Future Trends in Vehicle Software
Keyword 3 Software Expenditure in Automotive Sector
Podcast No
WIP Number PF1D-01-00-00-00