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Market and sectors
The facts and figures described here come from a variety of sources and they have been compiled and presented together here. We would like to acknowledge the following main sources of data:
- "The Hipeac Roadmap on Embedded Systems" including "Future of Embedded Systems Technology" by BCC Inc
- Venture Development Corporation (VDC)
- Linuxdevices.com
- Study of Worldwide trends and R&D programmes in Embedded Systems by FAST GmbH for the European Commission (PDF, 2.074KB)
Market
The embedded systems market is made up of both hardware (integrated circuits and boards) and software. The majority of the revenue comes from the embedded IC industry as it is shown in the table below. In 2004 the revenues was almost 40$ billions while it is estimated that by 2009 it will reach 79$ billions with a 14.2% average annual growth rate (AAGR). However, the highest growth rate in terms of revenues comes from the embedded software (operating systems, design automation and development tools). Hence, it is estimated that by 2009 the overall embedded software revenues will reach 3,448$ million [1].
(*) "The Hipeac Roadmap on Embedded Systems".
Source: "Future of Embedded Systems Technology". BCC Report G-229R.
In terms of regional distribution, the Americas (US mainly) has almost half of the total revenues. The other regions, Europe, Japan and Asia/Pacific equally share the rest. The Asia/Pacific region has the highest growth rate (22.7%) followed by Europe with 13.2%. The US has the lowest growth rate of 11.0% as is illustrated in the graph below.
(*) "The Hipeac Roadmap on Embedded Systems".
Source: "Future of Embedded Systems Technology". BCC Report G-229R.
Sectors:
The value added to the final product by embedded software is often orders of magnitude higher than the cost of the embedded devices themselves. Europe is currently leading the world in industrial sectors such as consumer electronics, telecommunications, automotive, avionics, medical and industrial automation. A key factor is the increase of the share of the value of embedded electronics components in the value of the final product. In the next five years, this share is expected to reach significant percentages in areas such as Telecommunications (37%), Consumer Electronics and Intelligent Homes (41%), Industrial Automation (22%) and Health/Medical Equipment (33%).
Venture Development Corporation estimates that the consumer electronics vertical market continues to be a leading source of revenue for embedded OS vendors, accounting for 41.7% of shipments in 2004. The telecom /datacom ranked as the second largest vertical market in 2004 [2]. The digitisation and networking of consumer electronics and home appliances and the convergence of PCs and home entertainment systems, are already giving rise to a new breed of intelligent consumer electronics devices. Analysts estimate the growth of the digital home in the US alone will generate 200+ billion in revenue up to 2010.
In the automotive industry, electronics are an increasing fraction of a vehicle's value, increasing from 22 % in 1997 to 33-40 % in 2010. An estimated 70% of automotive innovations over the last 20 years are ICT-related whereas vehicles with stability control are 35%, less likely to be involved in accidents [3]
Embedded System technologies add intelligence to the control processes in manufacturing shop floors and improve the logistic and distribution chains, resulting in an increasing productivity in a wide range of industrial processes. The possibility to deliver systems with new functionality or improved quality within a competitive time frame has ensured substantial market shares for the European economy in domains like automotive (37% in 2002), industry and energy (30% in 2002), or defence and space (30% in 2002) [4]. In this way, Embedded Systems directly impacts European competitiveness.
Revenues by sectors:
The BCC figures are shown below, computing, telecom, and consumer embedded devices have the majority of the revenues. However, the automotive industry it seems to be the most promising in terms of annual growth rate (19.5%). Unfortunately, the medical and the industrial applications have the lowest numbers in terms of revenues and growth. The telecoms and the consumer devices have high computation demands (hence they are based on state-of-the-art components) while the medical and the industrial application can be usually be supported by lower performance components [5].
(*) "The Hipeac Roadmap on Embedded Systems".
Source: "Future of Embedded Systems Technology". BCC Report G-229R.
For further information: STUDY OF WORLDWIDE TRENDS AND R&D PROGRAMMES IN EMBEDDED SYSTEMS (PDF, 2.074KB)
[1] The Hipeac Roadmap on Embedded Systems. European Network of Excellence on High-Performance Embedded Architecture and Compilation. Chapter 3. Market Research.
[2] Venture Development Corporation. Embedded Software and Tools Practice. The 2005 Embedded Software Strategic Market Intelligence Program. Volume 1. Embedded and Real Time Operating Systems. White Papers
[3] P. Hansen, "Electronic Stability Control promoted in Japan", The Hansen Report on Automotive Electronics, vol. 17, No.1, February 2004.
[4] Automotive S/W and Electronics Briefing-IBM Automotive Industry team, may 2002.
[5] The Hipeac Roadmap on Embedded Systems. European Network of Excellence on High-Performance Embedded Architecture and Compilation. Chapter 3. Market Research.