Embedded Systems: Technologies and Markets

Published - Apr 2009| Analyst - Anand Joshi| Code - IFT016C
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Report Highlights

  • The global market for embedded systems is expected to increase from $92.0 billion in 2008 to an estimated $112.5 billion by the end of 2013, a compound annual growth rate (CAGR) of 4.1%.
  • Embedded hardware was worth $89.8 billion in 2008 and is expected to grow at a CAGR of 4.1% to reach $109.6 billion in 2013
  • Embedded software generated $2.2 billion in 2008. This should increase to $2.9 billion in 2013, for a CAGR of 5.6%.

INTRODUCTION

STUDY GOALS AND OBJECTIVES

This market research report focuses on embedded technology, including both embedded hardware and embedded software. The report forecasts the market for embedded technology through 2013 by considering macroeconomic factors and dynamics of the markets for various end products. It also provides measurement and analysis of major market segments, and highlights major players and emerging trends affecting the market.

REASONS FOR UNDERTAKING THE STUDY

The ease of developing and marketing embedded devices is increasing with the advancement of technology and communication. Embedded devices are now starting to dominate nearly every aspect of human life. Many new devices are being introduced into the global market every day with innovative end application. From cell phones to digital TVs to mp3 players to refrigerators to washers, we are constantly using embedded devices for different purposes, blissfully unaware of the underlying technology.

Embedded hardware and software make these embedded devices work. The success of the embedded devices is defined by the quality of the device’s design and development, and its use of the proper underlying hardware that meets cost constraints. This study analyzes key components of embedded devices, underlying business models and the drivers for each. It projects the overall market size and that of major market segments.

EMBEDDED TECHNOLOGY MARKET SEGMENTATION 

Historically, the term embedded systems was used to describe any non-PC-related system, but in time, the definition has grown to include any system that is dedicated to a particular functionality. We have segmented the embedded market into hardware and software. The hardware segment consists of Processor IP, MPU/MCU, DSP, ASIC, FPGA, and embedded boards. The software segment consists of OS, software development and testing tools, middleware, and Linux-based OS and tools.

SCOPE OF REPORT

The report is divided into two parts: embedded software and embedded hardware. For each segment of the hardware and software market, we have provided: 

  • Definition and further segmentation
  • Overall market
  • Geographic data
  • Revenue by end application
  • Business models
  • Growth forecast and market trends
  • Key players and market share

The report also includes a high-level discussion on the embedded hardware design. 

The report does not consider chips developed for a specialized market such as set-top boxes. It also excludes IP and EDA tools used for the development of hardware.
 
This report will provide: 
  • Understanding of the embedded devices architecture and the roles played by different hardware components.
  • Understanding of the market segment and factors driving its growth.
  • Knowledge of business models used in different market segments.
  • Market potential for each segment and projection for the next 5 years. 
INTENDED AUDIENCE
 
This report touches many industries, and will be useful to a broad reader base. More specifically, we believe that the following categories of people should benefit from the information in this analysis: 
  • Embedded industry insiders looking to enhance their business knowledge by understanding more about the market trends, including executives, managers, marketing, and salespeople.
  • Product marketing and management people who want to understand the intricacies of the embedded market and position their products accordingly.
  • Business and venture executives in the technology industry looking to invest in embedded hardware companies.
  • Finance and investment professionals looking to make investment decisions for embedded hardware market companies.

METHODOLOGY

Market data and information for this report was conducted through numerous channels. We looked at the publically available information from various companies and the industry association data. These include SEC filings by public companies, presentations in various conferences, and articles and reports published by company insiders.

We also conducted interviews with company executives and other industry experts to gather the key data and to understand their market insights. The companies selected for this purposes fell into several categories, including hardware suppliers, device manufacturers, and engineering services companies. 

In addition, several other sources were used, including exhaustive Internet searches, blogs, and articles written by industry journalists. Editors and executives provided individual perspectives on the market. We also reviewed industry journals and publications, white papers, and technical notes. Internal sources included earlier reports from BCC on embedded systems technology.
 
The projections for future growth were based on several factors. We developed a mathematical model to forecast growth based on the following:
  • Annual revenue of the overall industry throughout the period of last 5 years; we used this data to determine trends and correlation between the overall industry and each segment.
  • External factors such as the economy and growth projections by key institutions, including the IMF.
  • Key drivers for each the market segment, such as the emergence of digital TV and consumer devices.
  • Geographical trends impacting the technology, such as the rise of Asia as a major consumer base.
  • New innovations and threats incurred to the existing technology. 
ANALYST CREDENTIALS
 
Anand Joshi has more than 15 years of experience in the embedded and semiconductor industry. His career spans involvement in engineering and marketing roles in fortune 500 companies as well as start-ups.  As an industry executive, he has often been involved in developing market strategies, market projections, and modeling.
  
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DISCLAIMER

The information developed in this report is intended to be as reliable as possible at the time of publication and of a professional nature. This information does not constitute managerial, legal, or accounting advice; nor should it serve as a corporate policy guide, laboratory manual, or an endorsement of any product, as much of the information is speculative in nature. The author assumes no responsibility for any loss or damage that might result from reliance on the reported information or from its use.

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Published - Jun-2005| Analyst - Ravi Krishnan| Code - IFT016B

Report Highlights

  • The world market for embedded software will grow from about $1.6 billion in 2004 to $3.5 billion by 2009, at an average annual growth rate (AAGR) of 16%.
  • Embedded hardware growth will be at the aggregate rate of 14.2% to reach $78.7 billion in 2009, while embedded board revenues will increase by an aggregate rate of 10%.
  • Embedded components are being propelled by three factors (1) ASPs are higher than stand-alone chips, (2) their unit sales are cannibalizing the consumption volume of stand-alone MPUs, ASIC, FPGA and DSP; (3) and, the growth of system-on-a-chip components.
Published - Jan-2000| Analyst - Lorraine Ross| Code - IFT016A

Report Highlights

  • Embedded systems market is expected to grow at an average annual growth rate (AAGR) of 13% over the period, rising from $32 billion in 1998 to nearly $67 billion in 2004.
  • Software for embedded applications, which includes realtime operating systems and portable operating systems, will see the second highest growth, with an AAGR of over 16% through the period. Market heavyweights Microsoft and Sun have entered the embedded systems marketplace, their Windows CE and Java offerings, respectively.
  • Embedded processors, the largest segment in terms of revenue, will grow at 11.2% on average per year.
  • The market will be led, in terms of growth, by embedded memory products, which will rise at an AAGR of 17.7%.

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