The Software Defined Radio Market was valued at about USD 6.41 billion in 2020. It is projected to grow to approximately USD 14.69 billion in 2030, with a CAGR of approximately 8.8% during the forecast period (2021-2030).
The impact of COVID-19 is relatively lower on the software-defined radio market. However, the overall output of the SDR manufacturing companies remained low in 2020 due to disruptions in the supply chain, as well as the temporary shutting down of production.
The increasing investments toward modernization of C4ISR and battle management systems as well as enhancement of situational awareness of the armed forces, fuelled by the increase in defense spending by major economies, is expected to drive the growth of the SDR market.
The common platform architecture of the software-defined radios (SDRs) reduces development costs dramatically and simplifies the process of developing new products. Due to such advantages, the adoption of SDRs for dismounted military personnel as well as vehicular platforms is expected to accelerate the growth of the market during the forecast period.
Key Market Trends
The Land Segment Accounted for a Major Share of Revenue in 2020
The land segment currently dominates the market and is expected to continue its dominance during the forecast period. The increased demand is majorly due to the integration of software-defined radios into infantry soldiers and armored vehicles for secured communication. Currently, the armies are replacing their existing infrastructure with SDRs for more secured communication channels between ground-to-air and ground-to-ground platforms. In February 2021, Ultra Electronics was awarded a delivery order for the procurement and deployment of ORION radio systems to the US Army. This contract worth USD 26.7 million and is a part of the USD 497 million indefinite award/indefinite-quantity (IDIQ) contract provided to the company in 2019, under the TRILOS Radio Program of the US Army. The company has delivered more than 500 ORION SDR systems since the inception of the program. Similarly, as of February 2021, the Indian Army is in plans to replace its communication systems with Very/Ultra High Frequency (V/UHF) Manpack SDRs under the Make-II category. The contract is expected to be awarded to one of the 18 local manufactures post-development of the SDR prototype as per the Buy (Indian-IDDM) category of DAP 2020. Such plans of the armed forces will drive the growth of this segment during the forecast period.
The Asia-Pacific Region is Anticipated to Generate Significant Demand for SDRs During the Forecast Period
The Asia-Pacific region is expected to generate demand for SDRs primarily due to the growing tension among major economies, which has resulted in higher defense spending on enhancing situational awareness. The military spending of the region increased by more than 20% during the 2015 - 2020 period. The majority of the investments are into the modernization of the land, air, and sea platforms. In addition, the investments are directed toward the procurement of advanced communication systems that will enhance their battlefield capabilities and situational awareness of the military personnel in complex terrain. For instance, India has been rapidly investing in the replacement of existing radio systems with indigenously developed SDR systems into various platforms of the armed forces. In this regard, in February 2021, the Indian Ministry of Defence (MoD) selected Bharat Electronics Limited (BEL) for the acquisition of Software Defined Radio Tactical (SDR-Tac) over a period of three years. The contract was worth USD 136.9 million (USD 1,000 crore). Similarly, in September 2020, Hindustan Aeronautics Restricted (HAL) began the integration of SDRs supplied by Rafael Defense Systems (as a part of the contract to deliver 400 SDRs) onboard the fleet of Su-30MKI of the Indian Air Force. Such investments into the deployment of SDR are expected to propel the growth of the market in the Asia-Pacific region during the forecast period.
Despite the presence of many regional and international players in the market, few players accounted for a majority share in the software-defined radio market. Some of the prominent players in the market include L3Harris Technologies Inc., General Dynamics Corporation, Leonardo SpA, Elbit Systems Ltd, and Ultra Electronics Holdings.
The market is witnessing huge investment and technological enhancement due to the future potential of software-based communication and high-volume data-sharing technology in the defense industry. In addition to this, the companies are partnering with armed forces to supply and deliver advanced SDRs for their infantry troops and vehicle platforms. For instance, Elbit Systems Ltd partnered with various armed forces across North American, European, and Asia-Pacific regions. In November 2020, Elbit Systems was awarded a contract to provide the E-LynXTM Software Defined Radio (SDR) solution for the combat battalion level of the Spanish Army as a part of its combat radio network modernization program. These SRDs will be for dismounted soldiers and vehicular systems that will be installed onboard a range of combat platforms. Similarly, during the 2019 - 2020 period, the company received contracts from Sweden, Switzerland, and Germany to deliver the radios in hand-held and vehicular configurations. Such partnerships are anticipated to further enhance the geographical footprint of the companies in the market.
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1.2 Scope of the Study
4.2 Market Drivers
4.3 Market Restraints
4.4 Porter's Five Forces Analysis
4.4.1 Bargaining Power of Buyers/Consumers
4.4.2 Bargaining Power of Suppliers
4.4.3 Threat of New Entrants
4.4.4 Threat of Substitute Products
4.4.5 Intensity of Competitive Rivalry
5.2.1 North America
126.96.36.199 United States
188.8.131.52 United Kingdom
184.108.40.206 Rest of Europe
220.127.116.11 Rest of Asia-Pacific
5.2.4 Latin America
18.104.22.168 Rest of Latin America
5.2.5 Middle-East and Africa
22.214.171.124 Saudi Arabia
126.96.36.199 Rest of Middle-East and Africa
6.2 Company Profiles
6.2.1 Northrop Grumman Corporation
6.2.2 Elbit Systems Ltd
6.2.3 BAE Systems PLC
6.2.4 Thales Group
6.2.5 General Dynamics Corporation
6.2.6 Raytheon Technologies Corporation
6.2.7 L3Harris Technologies Inc.
6.2.8 Leonardo SpA
6.2.9 Rafael Advanced Defense Systems Ltd
6.2.10 ASELSAN AS
6.2.11 Israel Aerospace Industries Ltd
6.2.12 Ultra Electronics Holdings
A selection of companies mentioned in this report includes:
- Northrop Grumman Corporation
- Elbit Systems Ltd
- BAE Systems PLC
- Thales Group
- General Dynamics Corporation
- Raytheon Technologies Corporation
- L3Harris Technologies Inc.
- Leonardo SpA
- Rafael Advanced Defense Systems Ltd
- ASELSAN AS
- Israel Aerospace Industries Ltd
- Ultra Electronics Holdings