A recently published report by VDC Research indicates that embedded system manufacturers’ requirements and end-consumers’ expectations continue to drive substantial investment in embedded software and development tools. The embedded and real-time operating system market, in particular, has faired better than many other sectors of the broader embedded market, with 2008 revenue demonstrating 9% growth over 2007. However, even this achievement is qualified with the expectation of the first industry contraction in 2009 since 2002.
“As a whole, the embedded operating system market has been greatly affected by the reduction in unit shipments over the past nine months due to the substantial percentage of market revenues typically derived from production licenses,” says Chris Rommel, Analyst with VDC’s Embedded Software and Tools Practice. “However, the magnitude of the recession’s impact has been tempered within the embedded and real-time segment due to the growing demands for software-driven functionality coupled with mounting device safety and security considerations and new device requirements.”
Although the recession has and is expected to continue to negatively impact the market for embedded and real-time operating systems in 2009, certain vertical markets have been less affected in the short term while others hold the potential to rebound significantly in 2010.
For example, innovation within the medical device industry will drive growth as cart-mounted devices consolidate sensing and computing components into smaller, mobile form factors and device software is placed under greater regulatory scrutiny. By contrast, the retail automation industry market is expected to demonstrate the largest percent decrease from 2008 to 2009 as retail stores combat falling revenues by limiting capital expenditures on new kiosks and POS equipment. However, VDC expects the retail segment to rebound significantly after showing modest growth in 2010 to grow in excess of 20% in 2011 as these companies begin to parlay increased cash flow into investments in enhancing efficiencies and consumer experiences.
VDC expects market participants who – in spite of the current economic climate – remain focused on targeted product development for and marketing to these and other key vertical markets will improve their ability to emerge from this downturn with greater revenue growth and market share.
VDC explores these industry trends and other critical issues affecting this market in the recently released report, Embedded/Real-time and Mobile Application Operating Systems, Volume 1 from Track 1 of VDC’s 2009 Embedded Software Market Intelligence Service.
About VDC Research Group
VDC Research Group (VDC) is a technology market research and strategy consulting firm that advises clients in a number of technology markets including: Embedded Software and Tools, Embedded Hardware and Systems, Automatic Identification and Data Collection, Industrial Automation and Control, Mobile and Wireless, and Power Conversion and Control. Using rigorous primary research and analysis techniques, the firm helps its clients identify, plan for, and capitalize on current and emerging market opportunities. We strive to deliver exceptional value to our clients by leveraging the considerable technical, operational, educational and professional experience of our research and consulting staff. During our nearly four decades of ongoing operation, we have had the pleasure of serving most of the world’s leading technology companies, many high-profile start-ups, and numerous blue-chip early and later stage investors. Our products and services consist of research reports, annual research programs, and custom research and consulting services. Founded in 1971, the firm is located in the Boston area.