The automobile is in the midst of a historic transition from a primarily mechanical machine to a primarily electronic device. The evidence of this evolution is plain. The North American OEM market for automotive electronic products is expected to reach $33.8 billion by 2008. That represents a 7.3% annual growth rate, significantly exceeding the expected overall auto industry growth.
Not all segments of the automotive electronics industry will grow uniformly, according to "OEM Automotive Electronics In North America," a study by the Freedonia Group market research firm. A breakout of the four subsegments in the study, all for the North American light vehicle market through 2008, shows:
- The market for electronic engine and drivetrain controls is expected to rise 4.4% per year through 2008 to $12.9 billion, below the forecast regional average pace for OEM automotive electronics in the aggregate.
- Demand for safety and security electronics at the original equipment level is projected to rise 11.4% per year to $11.6 billion, well above the aggregate rate.
- The market for automotive comfort, convenience, and entertainment electronics is projected to increase 5.5% per year to $5.8 billion, also below the forecast average pace for automotive electronics products in the aggregate.
- The market for automotive navigation and instrumentation electronics is projected to increase 10.3% per year to $3.5 billion, above the forecast pace for automotive electronics in the aggregate.
Not surprisingly, automobiles have begun to evolve at higher and higher "clockspeeds." This trend is evident in everything from the time required to design a car to the time between vehicle updates. Understanding this evolutionary path enables one to realistically anticipate what the future of automotive electronics may hold.
CHARTING THE ELECTRONICS EVOLUTION
The first stage of the transformation in the U.S. took place in the 1970s. Electronic systems largely were introduced to meet mandates regarding emissions and, in some cases, safety. Auto companies learned that conventional mechanically actuated ignition and fuel systems weren't precise enough to control exhaust emissions within mandated boundaries.
Electronically tuned ignitions, carburetors, fuel injection systems, and feedback catalytic converters were the first major electronic applications in the automotive mass market. Designers made few attempts to integrate systems. But they did learn that once an electronically generated signal such as engine speed was present, it could be used in multiple applications, from controlling ignition timing and carburetor function to driving the tachometer.
The next phase of the automotive electronics evolution expanded functionality. Companies began to add still more, often discrete, electronic systems. Antilock brakes, fuel injection, and the first electronically augmented automatic transmissions began to appear in North America, Western Europe, and Japan. During these first two phases, electronic systems, including both hardware and software, largely tended to be proprietary.
The third phase saw attention shift away from discrete applications and toward the need to optimize newly emerging electronic systems. A new type of system that depended on other electronic systems to operate began to evolve. For instance, electronic stability-control systems, which combine attributes of other electronic systems like antilock brakes, traction control, and engine management, improved vehicle stability through the use of software.
Auto companies began to tackle the challenge of electronic system proliferation. To this point, the strategy could have been characterized as "add a feature, add a box." That is, designers added controllers as new electronic features were introduced, rather than attempt to integrate them into existing systems.
During this phase, the first attempts at standardized operating systems and "plug and play" protocols began to emerge, although progress on gaining acceptance of such systems was slow. In addition, the adoption of in-vehicle networks, including controller-area network (CAN), began on a wide scale as auto companies sought fault-tolerant ways to link safety and performance-critical systems.
Finally, the industry is now forecast to enter an age of vehicle optimization that largely will be driven by electronic systems. The goal is to integrate various systems to provide even greater functionality and performance. For example, much work is being done on safety systems that can anticipate potential accidents and proactively trigger multiple active and passive systems to either prevent an accident or to minimize injury.
During this phase, the role of system software will grow significantly, because such anticipatory systems will require sophisticated sensors, decision algorithms, and high-speed communications capabilities.
SOFTWARE WILL BE KEY
This blurring of boundaries between separate systems will make the already challenging job of designing reliable vehicles even more difficult. Software will become more important as companies design sophisticated electronic control systems that cost-effectively deliver greater levels of functionality.
The average amount of data used in modern vehicles appears to be following Moore's Law, as it has doubled in the past few years and likely will double again in the next two. The implications of this growth in terms of dependence on software are significant for the industry, both for technology planning and for operation.
From a technology perspective, increasing dependence on software will require the industry to finally accept a standardized operating system or driver layers and protocols. The industry has had difficulty meeting this challenge so far, though recent progress has been promising. Few in the industry believe there will be standardization at the hardware level, as is common in the personal-computer industry. But most believe standardization at the software level will be critical for combating problems related to software code.
At the operational level, the rise of software brings unique challenges, since OEMs typically do not expect to pay suppliers for code. Yet leading-edge software providers are making headway, especially when the software in question provides differentiating appeal to an automobile.
Ultimately, the biggest winner in the electronification of the automobile has been the consumer, who has benefited from ever increasing levels of vehicle reliability and durability and from the many cost-effective electronic features and functions that even entry-level vehicles offer.
In fact, given the trend toward continued cost reduction in other electronics-intensive consumer products, like personal computers, the current inability of automakers to raise prices could become a norm for the industry, driven both by intense competition and the increasing levels of electronics in the average car.
The Freedonia Group