The global embedded systems could be set for a sea change in the coming years, with the rise of the Internet of Things paving the way for the development of a connectivity-centric operation framework in the global embedded systems industry. The September 2016 sale of ARM Holdings plc to SoftBank Group, a Japanese telecom giant, thus holds increased importance in this respect, as it represents a union between the leading role played by ARM Holdings plc in the global embedded system market and the growing telecom operations of SoftBank Group.
According to Transparency Market Research, the global embedded systems market is expected to exhibit a steady CAGR of 6.40% from 2015 to 2021, with the market’s total annual revenue expected to rise to close to US$233.2 bn by the end of the period.
Q.How does the emergence of the IoT affect the embedded system industry?
Embedded systems are processing systems designed to carry out a particular task in an application-specific device. The high speed, processing power, and accuracy of embedded systems, allied to their smaller size than conventional processing units and adaptability in various applications, have been vital in generating a plethora of self-sufficient electronic systems. However, the rise of the Internet of Things is likely to shake up the embedded system industry due to the former’s objective of making distinct devices communicate rather than operate self-sufficiently.
Telecom giants such as SoftBank Group are likely to play an important role in this transformation, as smartphones and tablets are increasingly being used as the command centers of personal area networks consisting of several smart devices, each carrying its own embedded system but connected through IoT technology.
Q.Which are the key segments of the global embedded system market?
The automotive industry is the leading consumer of embedded systems and has consistently retained a dominant share in the global industry over the last few years. The rising demand for automotive electronics and the increasing purchasing power of consumers, which has led to a steady demand for premium cars incorporating the latest safety and comfort features, are the key drivers for the automotive industry’s contribution to the global embedded system market.
While the automotive industry is likely to remain the key contributor to the global embedded system market in the coming years, the consumer electronics industry is also likely to register a growing demand for embedded systems due to their rising use across emerging economies and their important role in the current scenario of the Internet of Things.
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Geographically, North America is likely to dominate the global embedded systems market in the next few years due to the rapid advancement of IoT technology in the U.S. and the growing use of smart devices for various household and commercial purposes. However, the booming consumer electronics as well as automotive industries in Asia Pacific are likely to ensure steady demand for embedded systems in the near future, helping APAC’s rise as a key contender in the global embedded systems market.