The embedded systems sector is projected to expand from US$ 104.31 billion in 2022 to US$ 159.44 billion by 2030, reflecting a compound annual growth rate (CAGR) of 5.4% during the period from 2022 to 2030.
Embedded systems are integral to the consumer electronics landscape, finding extensive application in a variety of devices including smartphones, tablets, smartwatches, printers, smart TVs, gaming consoles, household appliances, wearable technology, digital cameras, smart speakers, and home security systems. These systems are designed to deliver the necessary speed and precision that facilitate the smooth operation of these devices. For instance, home security systems utilize embedded systems in conjunction with peripheral sensors to enhance residential safety. Similarly, household appliances like microwaves, refrigerators, and washing machines incorporate embedded systems to gather user inputs and manage operations based on those specifications, which is anticipated to further propel the growth of the embedded systems market. These systems also employ sensors to monitor appliance performance and adjust settings as needed.
The rising popularity of consumer electronics is a significant factor driving the embedded systems market. For example, Canalys reported a 3% increase in the demand for smartwatches and a 21% rise for basic watches in 2022. Globally, consumers are increasingly adopting smartwatches for health and fitness tracking. Leading companies in the smartwatch sector are continuously enhancing their products with new features to attract a broader customer base. A notable development occurred in July 2023 when Apple Inc. introduced a smartwatch capable of detecting conditions such as Parkinson?s disease, diabetes, and Lyme disease, which is expected to resonate well with older adults. The embedded systems within these smartwatches process the data generated to monitor users' health and fitness effectively.
In Europe, the embedded systems market is experiencing significant growth, particularly within the automotive sector. The automotive industry in Europe has long been a vital contributor to the region's economic development, innovation, and overall prosperity, representing nearly 7% of the GDP. The industry is synonymous with quality and innovation, as evidenced by phrases like "Made in Germany," "Italian car design," and "British racing." The increasing integration of advanced driver assistance systems (ADAS), autonomous vehicles, and connected car technologies is driving the demand for embedded systems in this sector.
The impact of digitalization on the embedded systems market has been profound. It has facilitated the adoption of various wireless communication technologies, including Bluetooth, Wi-Fi, and cellular networks. These technologies enable embedded systems to connect seamlessly to the internet, cloud services, and other devices, enhancing data transfer capabilities. According to the European Commission, a significant investment of US$ 189.4 million is planned for cutting-edge digital technologies and research as of August 2023. The advancement of digital technologies allows embedded systems to utilize more powerful processors, memory, and storage, enabling local data processing and analysis. This capability is particularly relevant for edge computing applications that require real-time decision-making, thereby contributing to the growth of the embedded systems market.
In 2023, Europe also launched the Horizon Europe Programme to promote collaborative research in areas such as artificial intelligence, robotics, and new materials. The development of AI-driven embedded systems is enhancing user performance by predicting equipment failures and minimizing downtime. This not only helps businesses save on operational costs but also extends the lifespan of equipment by reducing the need for manual intervention. AI-based embedded systems improve efficiency by optimizing processes and minimizing waste, leading to better resource utilization and cost savings. For instance, an AI-enhanced HVAC system can learn occupancy patterns to adjust temperature and ventilation, resulting in energy savings and increased comfort for occupants. These factors are expected to significantly boost the embedded systems market in Europe.
In France, the surge in investments in emerging technologies is prompting key players to either develop or adopt IoT and AI-based embedded systems. The French government is actively supporting start-ups to foster technological advancements. For example, in June 2023, President Emmanuel Macron announced a US$ 6.3 billion investment aimed at enhancing the technology sector. The French embedded systems market is being driven by a growing number of businesses transitioning from legacy systems to advanced IoT and AI solutions. Data from IBM indicates that in 2022, 31% of companies implemented AI technology, while 44% explored AI to improve their operations. The integration of AI in embedded systems offers substantial advantages, such as monitoring potential hazards and taking corrective actions. For instance, an AI-enabled autonomous vehicle can identify and react to dangerous situations, enhancing safety for passengers and other road users.
In Italy, the embedded systems market is anticipated to grow due to the rising demand across various sectors, including industrial automation, automotive, transportation, defense, home automation, and particularly healthcare. The healthcare sector is increasingly adopting embedded systems to enhance the functionality of medical devices and equipment. Significant investments in healthcare are driving the embedded systems market in this region. For instance, in February 2023, the Italian government allocated US$ 132.35 billion to improve the healthcare industry. Additionally, the government plans to invest in AI technology as part of its National Recovery and Resilience Plan (PNRR), further stimulating global embedded systems market growth. AI-based embedded systems provide healthcare professionals with improved diagnostic and treatment capabilities, enhancing the functionality of medical tools and improving patient care experiences, which is likely to positively influence the embedded systems market during the forecast period.
Key players in the embedded systems market include Infineon Technologies AG, Intel Corp, NXP Semiconductors NV, Qualcomm Inc, Renesas Electronics Corp, STMicroelectronics NV, Texas Instruments Inc, Microchip Technology Inc, Advantech Co Ltd, and Marvell Technology Inc. The report also examines several other significant players in the embedded systems market to provide a comprehensive overview of the market and its ecosystem. The embedded systems market report offers in-depth insights that assist key players in formulating effective growth strategies.