24.4 C
New York
Wednesday, July 24, 2024

Software Transformation in Automotive

A number of well-established industries have been greatly impacted by technology. Electric cars or self-driving cars with automotive software are disrupting the automotive industry, much like the Internet of Things and smart appliances are changing home appliances, on-demand content providers are disrupting home entertainment, and smart appliances and the Internet of Things are changing home appliances. Those in positions of leadership across all industries, but particularly in the auto sector, should carefully consider such changes.

Trends in Automotive Industry

The rivalry between the automotive and technology sectors is at an all-time high, with businesses vying to maintain their lead in this quickly changing environment. For instance, in 2016, after investing $1 billion in Cruise Automation, a start-up that develops self-driving car technology, General Motors announced that it would collaborate with Lyft to test self-driving taxis. This collaboration showcased the growing importance of automotive software development services in enabling autonomous driving capabilities.

Similar to this, Sony announced in March 2022 a well-planned collaboration with Honda Motors to produce high-value. By 2025, these battery-operated vehicles are likely to be on the road, demonstrating the incorporation of cutting-edge software systems in new cars. In March 2021, Xiaomi made another announcement regarding its entry into the smart electric vehicle market, indicating the expansion of automotive software development services to aid in the creation of intelligent electric vehicles. Currently, 90% of an automobile’s components are hardware and 10% are software.

However, industry predictions state that hardware will only account for 40% of total spending, with the remaining 60% being divided between software and content. Automotive industry experts claim that cooperation will be crucial as manufacturers struggle to maintain their growth during this disruptive time. Let us talk about how the automobile industry might lower the amount of hardware used in cars from 90% to 40%.

Consumer Behavior is Changing 

The development of social media and the internet during the digital age increased the power of the informed consumer.

The industry’s revenue model and value chain will change as the automotive digital revolution progresses due to a significant change in consumer behavior. Virtual and artificial reality are two immersive technologies that current and potential auto enthusiasts are interested in using to explore and customize their vehicles. For the purpose of offering such experiences, premium businesses must go beyond simply adhering to industry-wide initiatives; instead, they must take the initiative themselves, failing to do so could result in the loss of a significant component of their brand’s cachet.

The industry will continuously collect and quickly analyze vast amounts of data on driving behavior, road conditions, and other factors in order to forecast and improve automobile service.

Expectations and behavior of consumers will change even more as the automotive industry transitions to the digital age. More than ever, it is imperative to stay current and one step ahead of the competition.

Time Spent Driving

The first obvious change in the auto industry is how much time people spend in their vehicles while driving. In their cars, people already spend a lot of time: US drivers log more than 290 hours of driving time annually, or about 6-7 hours per licensed driver each week, according to estimates from the AAA Foundation. But as driverless vehicles proliferate, the number will probably drastically decrease. The justification is simple: as transportation technology develops into self-driving cars with 40% hardware, people will have more time to complete other tasks while traveling. According to AT Kearney, self-driving technology could provide travelers with up to 1.9 trillion minutes of leisure time by the end of 2030. 

Expanding Mobility-as-a-Service 

The development of mobility-as-a-service is the other significant shift in consumer behavior brought about by autonomous cars. It alludes to moving away from privately owned automobiles and using on-demand mobility alternatives. Car ownership has evolved from a status symbol to a necessity. Self-driving cars will hasten this tendency even further.

Adapting Automobile Ownership Trends

With the advancement of automotive technology, consumer perception of automobiles is changing, increasing the need for businesses and enterprises. As mobility evolves from a lifestyle item to a utility and need, even people who desire their vehicle are more inclined to lease than to purchase one altogether.

This transition from ownership to consumption is accelerated by urbanization. For instance, many believe taking a taxi is preferable to investing in a luxury automobile and traveling.

A New Value Chain

The automobile industry is likely to change from an OEM-led value chain to a “technology stack” that, in many respects, resembles what has been occurring in the computer sector. Three categories will be used to categorize the automobile business.

Hardware providers: Creating the actual car parts

Software providers: developing connection and fleet management features and smart automobile software.

Applications: This will use hardware and software to provide clients with the finest service and experience.

According to Morgan Stanley’s projection, the value chain will comprise 60% software and application layers and 40% hardware suppliers, down dramatically from 90% to 40%. Hardware providers must respond to this issue and change as a result. According to strategy and projections, hardware businesses’ revenue share will degrade, and their portion of industry profits will fall even more sharply.

What Can We Do to Change the Future?

The OEMs will attempt to penetrate the software and apps layer to remain relevant in the age of self-driving vehicle technology since there is a high likelihood that the hardware revenue share will see a long-term drop. 

To ensure that the integration of the hardware or software use in the automotive sector is carrie out as seamlessly as possible, collaborate with all technology businesses producing OS solutions. Concurrently pursue hardware improvement and application development. Choose the appropriate personnel to go smoothly from 90% hardware to 40% hardware.

Future Business Prospects

The automotive sector will have a big impact on how companies of all sizes expand in the future, especially in the areas of digital development, modernization of IT infrastructure, and data exploitation.

Businesses using this technology provide their workers with a fulfilling and stimulating work environment.

New jobs will be create, and individuals in various technological sectors, such as artificial intelligence, deep learning, and machine learning, will be train due to future automotive technology. Not only will the automobile industry be drastically change by these innovations, but also closely connect industries. To remain competitive in this shifting environment, businesses must adapt and use the knowledge of bespoke software development companies and other tech centers. 

These organizations focus on using cutting-edge technology to provide custom software solutions that cater to the particular requirements of the automobile industry. Automotive firms may speed up innovation, improve operational efficiency, and provide outstanding customer experiences by collaborating with a custom software development company in NYC. Businesses and their partners may more easily cooperate and simplify operations with the help of cutting-edge software tools, allowing them to react quickly to market needs and maintain their competitive edge in this ever-evolving sector.


All parties concerned must be ready to accept it and look for ways to continue growing because the shift from 90% hardware to 40% hardware in the automotive software sector will eventually happen.

Related Articles


Please enter your comment!
Please enter your name here

Stay Connected

- Advertisement -spot_img

Latest Articles