All Reports
1Q 2023

Leveraging Software-Defined Vehicles for Next-Generation Consumer Experiences

Organizational Structures, Software Architectures, Cars as a Third Space, and In-Vehicle Commerce: Global Market Analysis and Forecasts, 2022-2031

Software-defined vehicles (SDVs) could transform the automotive industry—generating billions in revenue from new applications and services. Over the next decade and beyond, automakers’ large investments will bring new vehicles to market that are designed to function as more than a means of transportation. SDVs will become a third space in which consumers can engage in experiences such as working, gaming, or escaping from the outside environment. SDVs’ new mediums and use cases are the focus of this Guidehouse Insights report.

Major automakers project that more than $100 billion can be generated from over the air updates and other services, but many factors challenge these multiples: regulatory uncertainties, lack of industry expertise, and evolving business models. To generate the most revenue possible, automakers will likely focus on providing unique upgrades for their premium vehicle lineups, while increasing the number of premium models they offer. At the same time, a new automotive ecosystem is taking shape whose value chain is significantly different from the traditional Tier 2 > Tier 1 > OEM structure. Guidehouse Insights expects the total annual revenue generated from SDVs to grow from $8.6 billion in 2022 to $110.5 billion in 2031, based on the total addressable vehicles in the market.

This Guidehouse Insights report analyzes the global market for SDVs, the new passenger experiences they will enable, and the industry changes needed to facilitate their implementation. It provides an analysis of SDV market issues, business cases, opportunities, and implementation challenges. Global market forecasts for capacity and revenue, broken out by segment and region, extend through 2031. The report examines key SDV technologies and use cases and profiles key market players.

Pages 60
Tables | Charts | Figures 34
  • What are the primary SDV applications globally and regionally?
  • Which companies are pushing this market forward, and why?
  • What new in-vehicle use cases do SDVs enable?
  • What technical and organizational challenges stem from these new use cases?
  • Which regions and applications offer attractive near-term ROI?
  • Which businesses can be implemented with SDVs?
  • OEMs, Tier One, and Tier Two suppliers
  • Startups and other tech companies building in-vehicle applications
  • Streaming media, gaming, and other content providers
  • Automotive consumer advocacy groups
  • Government agencies and lawmakers
  • Non-governmental organizations
  • Academia
  • Investor community

1. Executive Summary

1.1      Introduction

1.1.1     Market Drivers

1.1.2     Market Barriers

1.2      Scope

1.3      Global Market Outlook

2. Market Issues

2.1      Market Overview

2.1.1     Defining Software-Defined Vehicles

2.2      Market Drivers

2.2.1     Consumer Expectations

2.2.1.1   Software-Defined Functionality and User Experience

2.2.1.2   Active Safety Systems

2.2.2     Next-Generation Use Cases

2.2.2.1   Head-up Displays and Augmented Reality Head-up Displays

2.2.2.2   Driver and Occupant Monitoring Systems

2.2.2.3   Over-the-Air Updates and Subscriptions

2.2.3     The Car as a Third Space and Marketing Medium

2.2.3.1   Augmented Reality

2.2.3.2   AI Voice

2.2.3.3   Streaming Media and Video on Demand

2.2.3.4   Gaming

2.2.3.5   Closed-Loop Commerce and Payments

2.3      Market Barriers and Challenges

2.3.1     Organizational Structure

2.3.2     Development Processes

2.3.3     Talent Pool

2.3.4     Shifts in Supply Chain

2.3.5     Technical Integration, Complex Hardware, and Licensing

3. Technology Issues

3.1      Technology Overview

3.2      Software-Defined Vehicle Landscape

3.2.1     Hardware

3.2.1.1   Hardware as a Foundation

3.2.1.2   Decoupling Hardware and Software

3.2.2     SDV Architecture

3.2.2.1   Zonal Electrical and Electronics Architecture

3.2.2.2   Onboard Software Platform

      3.2.2.2.1   Operating System Kernel

      3.2.2.2.2   Middleware Layer

      3.2.2.2.3   Microservices

      3.2.2.2.4   Edge Computing

      3.2.3    Power Consumption

      3.2.4    Cybersecurity

      3.2.5    Liability

4. Key Industry Players

4.1      Overview

4.1.1     Blackberry QNX

4.1.2   Envisics

4.1.3   Foxconn

4.1.4   General Motors Ultifi

4.1.5   Nvidia

4.1.6   Qualcomm

4.1.7   Red Hat

4.1.8   Seeing Machines

4.1.9   Stellantis

4.1.10  Xperi

4.1.11  Additional Key Market Participants

5. Market Forecasts

5.1      Scope

5.2      Sources and Methodology

5.3      Results

5.3.1     Overall Software-Defined Vehicle Market

5.3.2     Total Addressable Connected and OTA-Capable Vehicle Market

5.3.3     Automotive OTA Subscriptions and Services Market

5.3.4     In-Vehicle Payments Market

5.3.5     In-Vehicle Streaming Content and Gaming Market

5.3.6     Vehicles with Level 2, 2+, or 3 Capabilities Market

5.3.7     HUDs and AR HUDs Market

6. Conclusions and Recommendations

6.1      Introduction

6.2      Focus on Premium Upgrades and Experiences

6.3      Make ADAS Standard and Avoid Shakedowns

6.4      Partner Early

6.5      Shift in Thinking and Design

6.6      Learning from Other Industries

6.7      Regulatory Body and Consumer Advocacy Group Engagement

7. Acronym and Abbreviation List

8. Table of Contents

9. Table of Charts and Figures

10. Scope of Study, Sources and Methodology, Notes

  • Total Software Defined Vehicle Revenue, World Markets: 2022-2031
  • Vehicles Sold With Level 2, 2+, or 3 Automation Capabilities, World Markets 2022-2031
  • Annual HUD & AR HUD Units Sold, World Markets 2022-2031
  • Total Addressable Connected & OTA-Capable Vehicles On the Road, World Markets: 2022-2031
  • Annual Automotive Subscription & Services Revenue, World Markets: 2022-2031
  • In-Vehicle Streaming Content & Gaming Revenue, World Markets: 2022-2031
  • In-Vehicle Payments Revenue, World Markets: 2022-2031
  • Annual Vehicles Sold With Level 2, 2+, or 3 Capabilities, World Markets 2022-2031
  • Annual HUD and AR HUD Units Sold, World Markets 2022-2031
  • Software-Defined Vehicle Breakdown
  • SDV ADAS Systems
  • AR HUD View
  • In-Cabin Sensing Capabilities
  • In-Vehicle Augmented Reality
  • Three-Tiered Infotainment Display
  • Traditional Software Development
  • Vehicles Sold With Level 2, 2+, or 3 Automation Capabilities, World Markets 2022-2031
  • Annual LDV Sales by Region, World Markets: 2022-2031
  • Total Connected and OTA-Capable Vehicles on the Road, World Markets 2022-2031
  • Total Addressable Connected and OTA-Capable Vehicles, World Markets 2022-2031
  • Annual HUD and AR HUD Units Sold, World Markets, 2022-2031
  • Annual HUD and AR HUD Units Sold, By Type, 2022-2031
  • Total Addressable Connected and OTA-Capable Vehicles on the Road, World Markets 2022-2031
  • Annual Vehicles OTA Subscription and Services Revenue, World Markets 2022-2031
  • In-Vehicle Streaming Content and Gaming Revenue, World Markets: 2022-2031
  • In-Vehicle Payments Revenue, World Markets: 2022-2031
  • Total Software-Defined Vehicle Revenue, World Markets: 2022-2031
  • OEM Actions to Facilitate and Foster SDV Innovation
  • Nvidia DRIVE Offerings
  • Snapdragon Features
  • Seeing Machine Product Offerings
  • Stellantis AI-Powered Platforms
  • Xperi Solutions
  • Additional Key SDV Market Participants
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