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Strategic Insights and Growth Opportunities for Software-defined Vehicles

  • Report

  • 105 Pages
  • November 2022
  • Region: Global
  • Frost & Sullivan
  • ID: 5695863

Future Growth Potential in the Automotive Industry Hinges on a Service-oriented Architecture with Repeatable Avenues of Revenue Generation

Original equipment manufacturers (OEMs) used to differentiate their products based on mechanical features. Today, however, consumers are increasingly looking for features defined by software, such as driver assistance, connectivity, and comfort-convenience services. The convergence of technologies including electrification, autonomous driving, shared mobility, and connectivity is causing OEMs to migrate from the traditional hardpoint-defined architecture to a software-oriented architecture. Meanwhile, these trends are reshaping customer expectations and forcing OEMs to address them in new-generation vehicles, thereby turning vehicles into software on wheels.

Similar to the mobile phone industry, the automotive industry is experiencing a sort of rebirth. The traditional business models of generating revenue cyclically are being challenged by continuous cash flow generation throughout the vehicle life cycle. Beyond unlocking new safety, comfort, and convenience features, software-defined vehicle (SDVs) have several advantages compared to their hardware-defined counterpart. SDVs allow customers over-the-air (OTA) updates that cover firmware patches; infotainment to receive improvements; monitoring and tuning of core functional capabilities, such as powertrain and vehicle dynamics; and feature-on-demand comfort-convenience services. This allows OEMs the opportunity to improve and upgrade vehicles on the go throughout their life cycle while generating revenue from feature-on-demand services, which culminates in deeper, more connected relationships with customers.

SDVs, therefore, are at the forefront of monumental changes in the automotive industry. This research service aims to provide an overview of trends impacting SDVs. It discusses the impact of these trends on the growth and deployment strategies of different OEMs and suppliers in the market.

Key Issues Addressed

  • What are the technological advancements shaping SDVs?
  • What change in development approach did SDVs cause?
  • What are software platforms? Will software players elevate from a Tier 2/3 supplier space to Tier 0.5?
  • What are the opportunities for OEMs and other stakeholders in the value chain?
  • How are OEMs transitioning from a hardware-centric to a software-centric approach?

Table of Contents

1. Strategic Imperatives
  • Why Is It Increasingly Difficult to Grow?
  • The Strategic Imperative 8
  • The Impact of the Top 3 Strategic Imperatives on the Software-defined Vehicle (SDV) Industry
  • Growth Opportunities Fuel the Growth Pipeline Engine
2. Growth Environment
  • Scope of Analysis
  • What is an SDV?
  • Characteristics of SDVs
  • Major Trends Leading to SDVs
  • Growth Drivers
  • Growth Restraints
  • Life Cycle of an SDV
  • Building Blocks of SDVs
  • Approaches to SDVs
3. Hardware Module
  • Evolution of E/E Architecture
  • Characteristics of Different E/E Architecture
  • Pathways to E/E Architecture Evolution
  • Centralized Architecture Allowing HW and SW Decoupling
  • Select OEM Activity in the HW Module
  • Case Study: Snapdragon Digital Chassis
  • Case Study: Tesla Partial Zonal Architecture to Full Zonal Architecture
  • Case Study: STLA BRAIN Platform
4. Vehicle Operating System (OS)
  • Major Trends
  • OS Migration for SDV
  • OS Overview
  • High-level Structure of an Automotive OS
  • Automotive OS Requirements
  • Strategies for Vehicle OS Development
  • OS Valuechain
  • OEM Activity
  • OS Benchmarking
  • Case Study: The Ascent of Android
  • Case Study: Android Automotive OS
  • Case Study: VW.OS
  • Case Study: MB.OS
  • Case Study: Blackberry In-vehicle OS Components
5. Middleware
  • Automotive Middleware
  • Automotive Middleware Protocol Comparison
  • Case Study: Middleware Requirement for Autonomous Driving
  • Case Study: ZF Middleware
6. Connectivity
  • Evolution of Vehicle Connectivity
  • Embedded Connectivity by Region
  • Importance of Auto Cloud Strategies
  • Snapshot of OEMs’ Cloud Strategy
  • OTA Update Allowing Features on Demand
  • Primary Cloud Players in Cloud Networking and Offerings
  • OEM Partnerships and Activity in Cloud Networking
  • Case Study: Amazon’s Connected Vehicle Ecosystem
7. Cybersecurity
  • Automotive Cybersecurity: Possible Attacks Scenarios and Impact
  • Cyberattack Scenarios in SDVs
  • Layered Cybersecurity Approach
  • Vehicle SW and System Cyber Risk Assessment
  • Automotive Cybersecurity Value Chain
  • Different Types of Cybersecurity Solutions in Vehicles
  • Overview of Cybersecurity Threats in an SDV
  • Overview of OEM Cybersecurity Partnerships and Strategies
  • Automotive Cybersecurity Companies: Comparative Analysis
  • Semiconductor and Chip Manufacturers: Comparative Analysis
  • Automotive Tier I Suppliers: Comparative Analysis
  • Case Study: Bosch Cybersecurity
  • Case Study: Cybellum Digital Twins™ Platform
  • Case Study: Harman Cybersecurity and WP.29 Compliance Services
8. Impact of SDV on the Automotive Value Chain
  • Traditional Automotive Value Chain
  • SDV Ecosystem, Threats, and Opportunities
  • Value Creation Throughout the Life Cycle of an SDV
  • SDVs Lead to New Business Models
  • Opportunities and New Value Chain in SDV
  • Emergence of Tier 0.5
  • Role of Tier I
  • Emergence of the Digital Car and Features on Demand
  • OEM Benchmarking
  • The Last Word
9. Growth Opportunity Universe
  • Growth Opportunity 1: SDVs Opening New Avenues for Repeatable Revenue Generation
  • Growth Opportunity 2: Software Players to Find Prominence in New Value Chain
  • Growth Opportunity 3: IT Companies Assisting Automakers to Develop Technology Know-how
10. Next Steps
  • Your Next Steps
  • Why Now?
  • Legal Disclaimer

Companies Mentioned (Partial List)

A selection of companies mentioned in this report includes, but is not limited to:

  • Amazon
  • Android
  • Blackberry
  • Bosch
  • Cybellum
  • Harman
  • Mercedes-Benz
  • Tesla
  • Volkswagen
  • ZF