Skip to main content

New Automobile Software Upgrade Market Opportunities

As the Software Over-the-Air (SOTA)-enabled vehicles market gains momentum, ABI Research forecasts that 203 million OTA-enabled cars will ship by 2022. Both SOTA and Firmware Over-the-Air (FOTA) will see a spike, with nearly 180 million new cars supporting SOTA and 22 million FOTA by 2022.

Beyond Tesla, car OEMs will primarily focus the next three to five years on SOTA versus the still nascent FOTA upgrade. Moreover, the majority of new vehicles will include computer software that will require periodic updates.

"Three factors changed the course of the automotive industry and paved the way for the future of OTA: recall cost, Tesla’s success as the foundation of autonomous driving, and security risks based on software complexities," said Susan Beardslee, senior analyst at ABI Research.

It is a welcome transformation, according to the ABI assessment, as OTA is the only way to accomplish secure management of all connected car software in a seamless, comprehensive, and fully integrated manner.

Emerging OTA Technology Applications

OTA can positively change the car recall process. In the past two years, the recall rate increased to approximately 46 percent with four major car OEMs setting aside a combined $20 billion during the course of 2015 in warranty reserves.

Though not all vehicle recalls can be fixed via an OTA update, ABI market analysis suggests that close to one-third of last year’s recalls could have been addressed over the air, saving car OEMs at least $6 billion.

As the level of vehicle autonomy accelerates, cyber security concerns will become increasingly critical. To address cyber security risks that stem from software upgrades, ABI anticipates the automotive industry will begin to see more mergers and acquisitions over the next two years, as car OEMs emphasize the value of software management solutions.

"Movimento, in particular, is a huge acquisition opportunity," continues Beardslee. "One of the leading software management vendors in the automotive industry, Movimento reflashes more than 3 million vehicles per year and can detect and delete cyber attacks within 10 milliseconds."

But this industry change is not without its challenges: particularly, the threat to car dealerships and the danger of customers opting out of software upgrades. The car dealers have everything to lose. When the automotive industry becomes fully OTA, car dealers will lose the revenue enhancement that they acquire in making updates and repairs.

Customer opt outs, on the other hand, were a challenge long before the arrival of OTA and one that car OEMs will likely find a way to address, as they move toward a recurring service revenue generation model in the early 2020s.

Popular posts from this blog

Digital Transformation Investment at $3.4 Trillion

Business technology leadership matters. Across the globe, more leaders have been pursuing bold Digital Transformation (DX) initiatives with the goal of creating new sources of business value through digital products, services, and experiences. As an additional benefit, the COVID-19 pandemic revealed that digital transformation efforts improve an organization's resilience against global market disruptions. Global DX investment is forecast to reach $3.4 trillion in 2026 with a five-year compound annual growth rate (CAGR) of 16.3 percent, according to the latest worldwide market study by International Data Corporation (IDC). Digital Transformation Market Development "Despite strong headwinds from global supply chain constraints, soaring inflation, political uncertainty, and an impending recession, investment in digital transformation is expected to remain robust," said Craig Simpson, senior research manager at IDC . The benefits of investing in DX technology -- including aut

Artificial Intelligence for National Border Security

National border protection agencies are under pressure to provide the highest level of security in the face of growing threats, such as increasing illegal migration and international terrorism. Now, government agencies are embracing advanced border security technologies to aid in effectively and reliably securing national borders. These solutions look to detect and identify potential threats and prevent them from escalating to a point that may jeopardize security. Security Surveillance Market Development Traditional border security patrols and Closed-circuit Television (CCTV) surveillance systems aren't adequate protection, and agencies must increasingly deploy new solutions to stay ahead of criminals and other potential threats to ensure the safety of a country’s borders. According to the latest market study by Juniper Research, the value of the border security technology market will exceed $70 billion globally in 2027 -- that's rising from $48 billion in 2022. Growing by 47 p

How to Apply Sustainability to Drive Value Creation

Global climate change policy initiatives have been an emerging topic for CEOs and their leadership teams, as they look to the future. Many organizations are preparing to play their part and help reduce carbon emissions. Eighty-seven percent of business leaders expect to increase their organization’s investment in sustainability over the next two years, according to the latest worldwide market study by Gartner. Customers are the stakeholder group creating pressure for these organizations to invest or act on sustainability issues -- selected by 80 percent of executives, followed by investors (60 percent) and regulators (55 percent). Sustainability Market Development "Sustainability enables businesses to cope with disruption," said Kristin Moyer, VP analyst at Gartner . "Economic uncertainty, geopolitical conflict and escalating materials and energy costs are forcing businesses to reexamine all forms of expenditure." According to Gartner, this focus on essentialism --