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Automotive tier ones need to learn from software vendors, study says

June 14, 2012 | Christoph Hammerschmidt | 222902309
Automotive tier ones need to learn from software vendors, study says In an automotive technology landscape where 90 percent of the innovation is based on software, automotive electronics tier ones have to adopt their R&D activities to changing needs, a study from consultant company Oliver Wyman says. In-car software will offer extraordinary business chances, but in order to seize these opportunities, even organizations with deep roots in electronics and mechatronics will have to transform themselves to software vendors and services providers.
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Within the next couple of years, computing systems in cars will take over the cars. By 2016, 210 million vehicles worldwide will be "always on", with more than 80 percent of the new cars being equipped with internet access. Connected cars, intelligent driver assistant systems or innovative HMI concepts - in all of these cases, electronics suppliers to the automotive value chain these developments will offer new business chances; for tier ones, this trend even offers the chance to break out of their niche in the value chain which often enough is defined and assigned by the OEMs, says Juergen Reiner, Oliver Wyman Partner and author of the study

Reiner polled several hundred R&D and business managers from leading tier ones about their strategies and expectations for the increasingly software-dominated automotive business. The vast majority of them has understood the importance of software for the future of their business - in their view, the significance of the IT in the cars compares to dominating technology and business trends like electromobility and lightweight construction. In particular experts and managers in companies active in the sectors infotainment, telematics and driving safety regard software as an enabler for new developments which eventually also generate new business opportunities.

The most visible benefits lie in replacing hardware functions through software. Modularizing approaches and software reuse translate into significant cost reduction, the manages questioned said. But while cost reductions are important, the competition to technology leadership is the paramount rationale for them. "Who develops and deploys an IT platform attractive enough to be adopted by OEMs, will be able to redefine its position in the value change", Reiner made clear.

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