Automotive Operating System Market

[299 Pages Report] The global automotive operating system market size was valued at USD 12.7 billion in 2022 and is expected to reach USD 25.8 billion by 2030, at a CAGR of 9.2% from 2022 to 2030. Factors such as growing number of ECUs/domain controllers in vehicles, along with the increase in the penetration of ADAS technology in vehicles will boost the demand for the automotive software such as OS. Increase in developments related to autonomous vehicles, in conjunction with rising penetration of electric vehicles will create new opportunities for this market. Companies operating in the market are focusing on product enhancement in order to gain competitive advantage in the global market.

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Automotive Operating System Market Dynamics:

Driver: Growing number of ECUs/domain controllers in vehicles

Every vehicle requires electronic-based components in its powertrain and chassis systems, body electronics and connectivity systems, and safety and convenience systems. Some of the increasing applications of electronic-based systems in vehicles are automatic transmission, voice recognition and biometric systems, antilock braking systems, power steering, blind spot detection, lane departure systems, headlights, ADAS, and park assist technologies. These applications are controlled by one or more ECUs. With the addition of advanced and connected technologies in a vehicle, the complexity and number of ECUs have also increased in recent years. This, in turn, will increase the need for automotive operating systems in the near future.

The automotive industry is witnessing a rapid advancement in terms of the number of electronics being used in vehicles. A modern automotive cockpit comprises digital displays for infotainment, instrument cluster, climate control, and others. Thus, the cockpit domain controller has emerged as an important aspect of controlling multiple cockpit functions from a single control unit. The cockpit domain controller gives the cockpit intelligent perception and interaction capabilities. This helps to provide users with an improved interactive experience. In addition, the cockpit domain controller is a single system that ensures multi-display management across the vehicle, thereby reducing the complexity of ECUs in the vehicle. Considering the improving in-vehicle infotainment and increasing penetration of ADAS features, the importance of cockpit domain controllers is expected to continue growing in the future. Domain controllers require Real Time Operating System (RTOS), general-purpose OS (Linux and Android) virtual machines, GPU, and CPU, among others, for the proper functioning of the cockpit domain. This is likely to increase the demand for operating systems. Considering all the mentioned parameters, the automotive operating system market is likely to augment projected revenues during the forecast period.

Restraint: Lack of seamless connectivity

3G is still the predominant connectivity network in some regions. For instance, according to the GSM Association, a significant share of smartphones in Sub-Saharan Africa, the Middle East & North Africa, and Latin America & Caribbean support 3G only. Moreover, emerging countries such as India, Argentina, and Brazil are still facing the challenge of upgrading existing infrastructure for connectivity purposes to 4G/5G due to the predominance of the 3G network. Further, the seamless availability of 4G connectivity is growing at a slow pace mostly in rural and suburban parts of the countries.

A large amount of capital is required to upgrade the necessary infrastructure for telematics, data analytics, and cloud platforms, and this requirement for huge capital will remain a key concern in countries such as India and Brazil while upgrading to 4G/5G. Thus, there arises a need for telecommunication providers to expand network infrastructure to cater to the surge in spectrum usage and data requirements.

The unavailability of uninterrupted 4G/5G networks in developed as well as developing nations is also one of the major concerns. Plus, an unclear picture of the commercialization of 5G technology is hindering the conversion of some conceptual developments to real-time use in developing countries as well as the outskirts areas and major cities within developed countries. Thus, a lack of uninterrupted and seamless connectivity will restrain potential opportunities for infotainment systems, ADAS features, and cockpit domains, among others. For instance, ADAS requires basic infrastructures such as well-organized roads, lane marking, and GPS connectivity for effective functioning. On highways, information such as lane change, object detection, traffic, and the distance between vehicles, apart from services such as navigation and connectivity, is critical. However, vehicles are not connected to each other or to cloud data due to the limited network connectivity on highways. All these factors are likely to restrain the growth opportunities of the automotive operating system market during the forecast period.

Opportunity: Advent of software-defined vehicles

The automotive industry has started shifting its focus towards software-centric vehicles from hardware-defined vehicles. This transformation has given birth to software-defined vehicles. The features and functions of these vehicles are primarily enabled through automotive software. Today, most premium vehicles have up to 150 million lines of software codes, which are typically proportionate among hundreds of electronic control units (ECUs) and a rising number of cameras, RADAR, and light detection and ranging (LiDAR) devices, among others.

In the past, automotive manufacturers used to differentiate their product offerings with mechanical features such as torque and horsepower. However, in today’s scenario, consumers/buyers are interested in features defined by software such as infotainment innovations, intelligent connectivity solutions, driver assistance features, and V2X communication solutions. The increasing demand for these features will, in turn, increase the need for automotive operating systems, software platforms, etc. All the above factors are expected to bolster the revenue growth of the automotive operating system market during the forecast period.

Software-defined vehicles have several advantages over hardware-defined vehicles. For instance, software upgrades pertaining to vehicle infotainment systems, telematics, vehicle diagnostic systems, etc. will require a trip to the dealership. However, with software-defined vehicles, customers will be able to receive over-the-air (OTA) updates that cover infotainment improvements, security patches, and the monitoring & tuning of core functionalities, such as powertrain and vehicle dynamics. This will increase the demand for software-defined vehicles, in turn driving the market during the forecast period.

Challenge: Risk of cybersecurity

Despite major developments in the automotive sector (ADAS, L2/L3 autonomy, etc.), cybersecurity remains a major challenge. Automotive advanced features are vulnerable to cyberattacks. There are various instances where cybersecurity has created a nuisance. For example, two researchers were able to hack into Chrysler’s Jeep, leading to the company upgrading the software in 1.4 million of its vehicles. Similarly, in Nissan Leaf, the control of the vehicle’s systems, such as HVAC, could be accessed by hackers.

According to a white paper study (Accenture's 2019 Global Survey), data breaches have increased by 67% in past five years, with the US being the most targeted country for cyberattacks. Several automotive OEMs are working on cybersecurity systems in order to make their respective vehicle models safer by integrating cybersecurity as well as threat detection systems with Artificial Intelligence (AI) and data analytics.

Regulators in various countries are preparing minimum standards for vehicle software and cybersecurity. For instance, in April 2018, California’s final regulations on autonomous vehicle testing and deployment came into effect, requiring autonomous vehicles to meet appropriate industry standards for cybersecurity. The World Forum for Harmonization of Vehicle Regulations under the United Nations Economic Commission for Europe (UNECE) also finalized its regulation on cybersecurity and software updates in June 2020. This made cybersecurity a clear requirement for future vehicle sales, and the associated regulations would affect new vehicle-type approvals in more than 60 countries. All these aforementioned factors are likely to hinder the automotive operating system market growth to a certain extent.

Automotive Operating System Market Share

The automotive operating system market share refers to the percentage of the global market owned by specific companies that provide car operating systems. Automotive operating systems are software platforms that manage numerous car operations such as infotainment, navigation, and driver assistance systems. The growing demand for connected and autonomous vehicles, the requirement for increased safety and security features, and the expanding popularity of electric vehicles are driving the automotive operating systems market. A few significant players dominate the worldwide vehicle operating system market, including Google, Apple, and BlackBerry. The market is divided into three sections: vehicle type, application, and geography.

Android segment is estimated to account for significant market during the forecast period (2022-2030)

Android segment is expected to witness significant growth in the automotive operating system market during the forecast period (2022-2030). The adoption of Android-based OS is growing, with its wireless mode already running in more than 100 million vehicles. Google is pulling out the Android smartphone playbook and attracting automakers with a car-specific version of Android, called the "Android Automotive OS". Android Automotive is an open-source platform that runs on other operating systems. It allows access to the Google Play ecosystem and advanced Google Assistant features. This will allow passengers to use the Play Store, Google Maps, Google Assistant, and other Android apps without an Android smartphone. Android Automotive OS supports several applications, such as messaging apps, navigation apps, Point of Interest (POI) apps, Internet of Things (IoT) apps, and video apps. According to primary inputs, the Android OS is likely to gain a significant share by 2028 in the market. All the aforementioned factors are expected to drive the Android-based operating system market during the forecast period.

Light commercial vehicles segment is expected to have significant growth opportunities during the forecast period

The light commercial vehicles segment is estimated to hold the second-largest automotive operating system market share in terms of value in 2022. North America and Asia Pacific are projected to lead the market. There has always been a high demand for vans from the logistics sector. OEMs are also offering an increasing number of LCV models in the Asia Pacific market. In December 2021, Mahindra & Mahindra announced its plan to launch 14 new models in the LCV segment in the Indian market. The upcoming LCVs include 6 new electric LCVs, and among these 6 electric LCVs, 4 will be for last-mile connectivity. These vehicles are expected to be launched in India by 2026. In 2020, United Parcel Services (US) announced that it had ordered 10,000 light-duty electric vans from Arrival for North America and Europe. All these aforementioned factors are anticipated to augment the revenues for autonomous segment of the market during the forecast period.

Asia Pacific is estimated to be the largest market during the forecast period.

Asia Pacific region is expected to have largest share for automotive operating system market during the forecast period. Asia Pacific comprises emerging countries such as China and India and developed countries such as Japan and South Korea. China, India, Japan, South Korea, Thailand, and the Rest of Asia Pacific have been considered in this study. In recent years, this region has emerged as a hub for automobile production. China, India, Japan, and South Korea, together, are driving the automobile market with the largest share in production and sales globally. This has led to an increase in vehicle production volumes over the years, which caters not only to domestic but also overseas demand. In addition, the increasing purchasing power of the population and rising concerns over vehicle pollution have triggered the demand for electric vehicles and semi-autonomous vehicles in Asia Pacific. One of the key drivers for the Asia Pacific market is the increased demand for connected services, particularly in China, Japan, and South Korea. The tech-savvy population in these countries demands a better and connected driving experience. Moreover, it is the largest market since it has majority of vehicle production, which is further exported to other regions. Although Asia Pacific has a lower penetration of software content in cars/vehicles than North America and Europe currently, the market size is larger due to larger vehicle production. Key automotive manufacturers in this region, along with the software providers and system integrators, are focusing on developing and innovating advanced software solutions to support reliable, safe, and performance-oriented automotive applications. All these factors are expected to bolster the revenue growth of the Asia Pacific market during the forecast period.

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Key Market Players

The automotive operating system market is dominated by major players including BlackBerry Limited (Canada), Automotive Grade Linux (US), Microsoft Corporation (US), Apple Inc. (US), and Alphabet Inc. (US). These companies offer automotive operating system and have strong distribution networks at the global level. These companies have adopted extensive expansion strategies; and undertaken collaborations, partnerships, and mergers & acquisitions to gain traction in the market.

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Scope of the Report

This research report categorizes the automotive operating system market based on operating system type, ICE vehicle type, EV application, application, and region.

Based on Operating System Type:

• QNX
• Linux
• Windows
• Android
• Others  

Based on ICE Vehicle Type:

• Passenger Cars
• Light Commercial Vehicles
• Heavy Commercial Vehicles

Based on EV Application:

• Charging Management Systems
• Battery Management Systems

Based on Application:

• ADAS & Safety Systems
• Autonomous Driving
• Body Control & Comfort Systems
• Communication Systems
• Connected Services
• Infotainment Systems
• Engine Management & Powertrain
• Vehicle Management & Telematics

Based on the Region:

• Asia Pacific (APAC)
  • China
  • India
  • South Korea
  • Japan
  • Thailand
  • Rest of APAC
• North America (NA)
  • US
  • Canada
  • Mexico
• Europe (EU)
  • Germany
  • France
  • UK
  • Italy
  • Spain
  • Rest of Europe
• Latin America (LATAM)
  • Brazil
  • Argentina
  • Rest of Latin America
• Rest of the World (RoW)
  • Iran
  • South Africa
  • Others

Recent Developments

• In June 2022, BlackBerry Limited announced an updated version of QNX Advanced Virtualization Frameworks (QAVF) and support for Google’s latest Android Automotive OS (AAOS) reference implementation (Trout 1.0). This new version of QAVF is likely to further enable embedded automotive software developers to simplify development, accelerate time to market, and reduce costs when building Android Automotive OS-based In-Vehicle Infotainment (IVI) systems.
• In June 2022, BMW announced that it will develop its BMW Operating System 8 infotainment software using Alphabet Inc.’s Android Automotive for some vehicle models beginning in March 2023.
• In April 2022, Automotive Grade Linux (AGL) announced IndyKite, Marelli Corporation, and Red Hat as new bronze members. This collaboration is likely to bring together automotive manufacturers, automotive suppliers, and technology companies to accelerate the development as well as the adoption of an open, shared software platform (Linux) for all technology in the vehicle, from infotainment to autonomous driving.

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