Embedded Systems Hardware & Software Trends for 2011

VDC Research – a US company specialized in technology market intelligence – recently released two reports about embedded systems trends for 2011. The first report focuses on hardware and the second on software.

The first report entitled “Top 10 trends for the embedded hardware and systems market in 2011” listed the following trends:

  • COMs gain traction as time-to-market accelerators for OEMs
    By combining COM express modules with off-the-shelf COMs, suppliers are able to offer several different configurations of CPU boards and leverage COMs’ interchangeable characteristics. CPU vendors can thus offer a fairly wide range of boards without incurring high design and inventory carrying costs.

  • PC/104 module family under pressure
    Although VDC data projects the PC/104 family will experience a single-digit rebound from the low points of the recent recession, vendors will have to commit resources to develop newer strategies in order for this technology to remain viable. Otherwise, the recovery of these architectures is likely to stall or decline in 2011.
  • Asia continues to rise in the development of embedded technology
    2011 will see further strengthening of the Asian embedded supplier community as supply chain synergies, R&D capabilities and fabrication automation increases between upstream and downstream ecosystem partners.
  • China’s growth will power automotive MCU market
    Continued economic growth in China will drive the country’s automotive market and expand the need for MCU technology. Despite reduction in government subsidies, VDC expects the Chinese automotive market to expand substantially through 2015, driving adoption of MCU solutions.
  • Suppliers will invest in services value chain
    While embedded hardware margins show signs of stability in 2011, it’s clear to VDC that leading embedded suppliers also recognize the value their clients place on a range of services capabilities. As a result, many leading suppliers will try to differentiate by investing in critical aspects of the services value chain, from consulting capabilities to enhanced warranty and end-of-life policies.
  • FPGA and GPU will expand into a number of market segments
    The medical, industrial automation and military segments provide an attractive opportunity for FPGA (Field-Programmable Gate Array) devices. From imaging equipment to diagnostic devices, there is a need for adaptable health care, factory control and military C4 solutions. The programmability, flexibility and reduced non-recurring engineering (NRE) costs associated with FPGAs will lend themselves to broader adoption in these markets. GPU (Graphic Processing Unit) will also be used in more and more devices especially as GPGPU is growing.
  • Tier 2/Tier 3 OEMs and ISVs will become more important
    Investment in solutions requiring embedded platforms continues to rebound; however, the market will still be driven by small- to mid-sized projects. This is related to the slow return of larger, blanket purchase orders let by Tier 1 accounts and to the user community preferences for projects with smaller footprints that fit within narrower application definitions and require short, sharply defined systems integration support. These projects are tailor-made for local, expert Independent Software Vendors (ISVs) , as well as Tier 2/Tier 3 OEMs.
  • The market explores HaaS (Hardware as a Service) bundles
    Broad market expansion and deep application penetration of remote monitoring and control capabilities will advance across a number of market segments, foretelling a broader migration to managed services solution development and deployment models in supervisory monitoring and control applications. These embedded application clouds will require local points of presence (POPs) or on-site infrastructure and hardware rolled into service level agreements (SLAs) supporting the software and service delivery portions of contracts.
  • Cross-platform processor suppliers learn to play nice
    From broader, bigger, more aggressive, public licensing agreements to M&A, the market will force suppliers of CPU, FPGA and GPU technologies to collaborate more in 2011. VDC Research’s surveys of hundreds of OEMS across a number of embedded markets reveal significant growth in OEM plans to develop solutions on hybrid platforms incorporating two or more of these technologies.
  • Competition will intensify and growth will accelerate
    Even if the market does not return to pre-recession levels, growth will accelerate during 2011. VDC sees virtually every vertical market growing more than five percent, and most technology categories achieving the same five percent CAGR (Compound Annual Growth Rate). However, profitability results may not be so positive. Demand for stable technologies, brutal price concessions and expanded services requirements will provide opportunities for differentiation and revenues, but not necessarily margin.

The second report entitled “Top trends for the embedded software and tools market in 2011,” listed the following 8 trends:

  • Android to catalyze further growth in commercial Linux market
    As device manufacturers take Android into new application classes beyond mobile, the commercial Linux market will experience further growth.
  • Multi-OS systems will grow in designs
    More application classes will have sophisticated UI functionality that is not supported by traditional OSs and end-users will seek out multi-OS systems.
  • Virtualization in embedded and mobile systems will increase
    Driven by hardware bill of materials savings and reduced concerns regarding additional run-time execution latencies and costs, operating system virtualization will provide increased growth opportunities, and therefore will continue to be a significant focus for many suppliers.
  • Symbian’s loss to become MeeGo’s gain
    Intel’s increasing focus on embedded combined with Symbian’s loss of strategic direction will drive additional gains for MeeGo as Nokia turns their attention toward the Linux-based platform.
  • OEMs to increase focus on the use of web security test tools
    Increased interaction with the cloud and web-based content by more embedded device classes will increase OEM focus on use of web security test tools.

  • Telecom vertical will reaccelerate spending on commercial products
    The increasing burden of mobile device data usage is driving the need for investment in wireless infrastructure and the telecom vertical market will reaccelerate spending on commercial products.

  • Microsoft will regain relevance in the mobile phone sector
    Riding the wave of Windows Phone 7 buzz, Microsoft will re-emerge as a leading player in the mobile phone arena.
  • Another acquisition to come?
    Following a string of high profile acquisitions in 2009/2010, VDC anticipates yet another major embedded real-time operating system supplier will get acquired in 2011.

On the 8 software and tools trends, I can easily conceive Android will continue to grow, Symbian will decline, more and more embedded devices will connect to the cloud and investment in infrastructure will pick up. I’m not so sure about the acquisition of an embedded software company and Windows Phone 7 becoming a leader in 2011. However, I have a hard time believing multi-os will grow in device as that would probably just confuse users or maybe I’m just not seeing what device may benefit from it.

VDC Reseach is currently conducting another survey for the embedded processor market. You may participate and answer this survey and get a chance to win an Apple iPad. VCD Research will also give 1 USD to charity for each completed survey.

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