Embedded Software Market - Size, Share, Industry Trends, and Forecasts (2024 - 2031)

By Category:

Based on the category, the market is segmented into bifurcated into software and service.

Trends in the category:

• Edge computing is a crucial aspect of many embedded applications because of the growing need for faster response times and heightened privacy requirements.
• The automotive industry is revolutionized by advancing features such as advanced driver-assistance systems (ADAS) and others.

The software accounted for the largest revenue share in the year 2023 and is anticipated to register the fastest CAGR growth during the forecast period.

• They are utilized in aerospace, military & defense, IT & telecom, and other industrial applications that require efficient resource utilization, real-time responsiveness, and seamless integration with hardware component solutions.
• They offer a variety of benefits, including device control, communication protocols, and data processing.
• In February 2024, AMD introduced AMD Embedded+, a solution that combines AMD Ryzen Embedded processors with Versal adaptive SoCs on a single integrated board. As a result, this system leads to scalable energy-efficient solutions, with long lifecycles for applications in the medical, industrial, and automotive domains. This helps ODMs bring new products to market more quickly.
• Therefore, according to the market analysis, the implementation of software in various sectors such as aerospace, military & defense, and others is driving the embedded software market trends.

By Component:

Based on the component, the market is segmented into operating systems, middleware, firmware, and application software.

Trends in the component:

• Embedded systems are commonly equipped with dual-core, quad-core, and even octa-core processors, enabling them to handle multiple tasks and more complex operations simultaneously.

The operating system accounted for the largest revenue share in the year 2023 and is anticipated to register the fastest CAGR growth during the forecast period.

• Operating system offers capabilities, such as resource management, user interface, and communication with devices.
• According to the analysis, they offer numerous advantages, such as efficient hardware use, running multiple applications, security management, and others.
• In April 2020, Microsoftmade its Azure real-time operating system available to major MCU vendors like ST, Renesas, NXP, Microchip, and Qualcomm. The adoption of this operating system by these vendors was seen as an initiative to enable billions of IoT devices using MCUs to operate within Azure's environment.
• Thus, the market analysis concludes that the ability to connect with multiple devices and multiple applications in the operating system segment is driving the market trends.

By Operating System:

Based on the operating system, the market is segmented into general-purpose operating systems (GPOS), real-time operating systems (RTOS), Linux, QNX, Windows, Android, VxWorks, and others.

Trends in the operating system:

• The increasing demand for minimal latency boosted the popularity of RTOS.

The RTOS accounted for the largest revenue share in the year 2023 and is anticipated to register the fastest CAGR growth during the forecast period.

• RTOS includes functionalities such as the ability to process data and events within strict time constraints, minimal interrupt latency, minimal thread switching latency, and the capability to interact with analog systems.
• They deliver a range of valuable benefits, including the capability to prioritize and divide application code, enhanced responsiveness of high-priority tasks, elimination of polling, and ease of incorporating middleware components. It also offers improved security and privacy and simplifies the development process. This makes it more expandable, maintainable, portable, and secure.
• In February 2024, the Zephyr Project , a Linux Foundation open-source initiative, was joined by Renesas Electronics Corporation, STMicroelectronics, and Ac6 as silver members. This project is primarily based on a proven RTOS ecosystem built by developers for developers, which is simple to deploy and manage.
• Thus, the data processing ability with minimal latency of RTOS is driving the embedded software market trends.

By Function:

Based on the function, the market is segmented into standalone systems, real-time systems, network systems, and mobile systems.

Trends in the function:

• Reconfigurable computing is a technology that lets hardware change its setup without needing to stop. This is useful for embedded systems that need to adapt to changing workloads or requirements.
• Wireless embedded systems are revolutionizing connectivity in the IoT Era with advancements in wireless solutions such as Z-Wave, Bluetooth, Wi-Fi, ZigBee, and others.

The mobile system accounted for the largest revenue share in the year 2023 and is anticipated to register the fastest CAGR during the forecast period.

• Mobile systems boast features such as controlling microprocessors, cameras, GPS, Bluetooth, and Wi-Fi to enable portable smart devices with advanced functionality and connectivity.
• They offer an array of benefits including enhanced performance, a robust app ecosystem, connectivity and IoT integration, power efficiency, security measures, and the potential for Augmented Reality (AR) and Virtual Reality (VR) applications.
• In April 2024, Qualcomm Technologies announced a significant advancement in Wi-Fi technology at the Embedded World 2024. Additionally, they unveiled new AI-ready IoT and industrial-embedded platforms. The aim of these platforms, along with a micro-power Wi-Fi SoC, is to enable intelligent computing.
• Thus, the ability of mobile systems to connect and control various components such as cameras, GPS, Bluetooth, and others is driving the software market trends.

By Application:

Based on the application, the market is segmented into segregated into Automotive, Aerospace, Consumer Electronics, Manufacturing, Healthcare, Military & Defense, IT & Telecom, and Others.

Trends in the application:

• The optimization of battery-powered devices for minimal power consumption and high uptime is driven by the increasing reliance on mobile and IoT devices.
• Automation in computers, robots, and other fields is boosting the embedded software market demand.

The consumer electronic segment accounted for the largest revenue share in the year 2023.

• This technology is utilized in consumer electronics and other industrial applications that require device control and management, connectivity IoT integration, and other solutions.
• Additionally, as per the analysis, the factors including the proliferation of smart home devices and the use of the internet are driving the consumer electronics segment. This is due to the increasing popularity of smartwatches, smart home devices, and voice assistants, as well as the growing need for smart speakers.
• In January 2023, Fluent.ai unveiled an embedded voice recognition solution developed in collaboration with Airoha, a subsidiary of Mediatek. This cutting-edge software supports offline speech recognition, even in noisy environments, and works with any language or accent. Users can perform more than 30 True Wireless Stereo (TWS) actions using 101 versatile voice commands, including tasks like enabling noise cancellation, controlling music playback, managing calls, and checking battery levels.
• Thus, the rise of smart home devices and others in the consumer electronic sector is driving the market trends.

The automotive sector is anticipated to register the fastest CAGR during the forecast period.

• The growth of the automotive segment is attributed to several factors including the incorporation of ADAS in vehicles, swift advancements in connected car services, growing adoption of semi-autonomous and autonomous vehicles, and others.
• In March 2024, General Motors (GM), Magna , a global automotive supplier, and Wipro Limited collaborated to create SDVerse, a B2B sales platform for automotive software.
• Therefore, the market analysis concludes that the use of this technology in the automotive sector to improve its efficiency is anticipated to boost the market during the forecast period.

Regional Analysis:

The regions covered are North America, Europe, Asia Pacific, Middle East and Africa, and Latin America.

North America is estimated to reach over USD 16,026.68 Million by 2031 from a value of USD 8,207.81 Million in 2023 and is projected to grow by USD 8,772.73 Million in 2024. The market evolution is mainly driven by its deployment in consumer electronics, automotive, healthcare, industrial automation, and telecommunications, among others. These industries are increasingly relying on embedded systems for efficient device control, interactivity, connectivity, and optimized performance, thereby fueling market development.

• In January 2024, Valeo is expanding its software capabilities in North America to meet the growing demand in the automotive sector. This is due to the significant transformation taking place with the advent of electric, autonomous, and connected cars. Valeo offers embedded software solutions that contribute to safer, cleaner, and more affordable mobility. Additionally, they enable individualization of car functionalities from the time they are built until the end of their life cycle.

Furthermore, factors including increasing adoption of Internet of Things (IoT) devices are projected to drive the market in North America during the forecast period.

Asia Pacific region was valued at USD 2,499.12 Million in 2023. Moreover, it is projected to grow by USD 2,675.06 Million in 2024 and reach over USD 4,964.88 Million by 2031. Out of this, China accounted for the maximum revenue share of 34.2%.

The Asia Pacific region's growing adoption of IoT offers lucrative growth prospects for the market. Additionally, the prevalence of a large number of semiconductor manufacturing facilities in the region is driving the Asia Pacific market opportunities.

• In January 2024, Advantech formally set up the ASEAN Shared Service Center (ASSC) in Penang, Malaysia, to boost customer service in the Asia-Pacific region. The first project of ASSC was kick-started with the signing of a Letter of Intent (LOI) with Piacom, a system integrator (SI) associated with Petrolimex, a Vietnamese petroleum conglomerate.

As per the embedded software market analysis, Europe is anticipated to witness substantial growth that is backed by the well-placed automotive and electronics sector. Companies invest in innovative technologies to cater to the surging need for software across regions.

The Middle East & African market is expected to show a moderate development rate during the forecast period. The rise of this technology helps farmers to implement efficient agricultural techniques and optimize the number of fertilizers, pesticides, water, and others which leads the agricultural sector, in turn, is anticipated to drive the embedded software market share.

There is growing infrastructure, digitalization, and attractive government policy for data center developments in the Latin American market depicting cumulative expansion in countries such as Colombia, Argentina, Chile, and others.