As the importance of software in the automotive industry has grown over the past 10 years (and continues to grow), automakers have to rely on over-the-air updates (OTA).
The software used in the automotive industry has many unique features, both good and bad.
The best feature is the low development cost as it is mainly royalties that decide. Among the disadvantages is the high cost of developing complex software. Worst of all, complex software contains bugs that need to be fixed after it's been deployed. Even with extensive testing at all stages of development, all complex programs will show sudden bugs that need to be fixed over the 15-year lifespan of the automotive software.
As a result, industries that heavily rely on sophisticated software end up using OTA upgrades to reduce costs and improve software functionality. The PC industry has been using OTA updates for over two decades, and the smartphone market for over a decade. The automotive industry is moving steadily to follow suit and reap the many benefits of this technology.
The table below shows the main benefits of OTA upgrades for the automotive industry. Next, we'll look at the benefits of OTA updates for different companies and consumers.
For software vendors, OTA updates are clearly an additional revenue opportunity. Revenue is split into several parts: fees for tailoring software to specific car models, royalties for each vehicle with installed software, support fees and OTA updates, and cybersecurity and analytics fees. Over the air vendors can ship their products through Tier-1 vendors (or Tier-1 vendors can handle OTA updates themselves).
Automotive OEMs primarily perceive OTA upgrades as a cost-effective technology that can be used both during the vehicle manufacturing phase and during recall companies. Reducing the cost of receiving notifications from users can also potentially be beneficial. Another benefit is that it saves time because updates that arrive by air can be installed faster than in the dealership. Also, OTA updates can be profitable in the future, as they can be used to install functional updates. Only a certain part of car owners will want to pay for such improvements.
Value for car owners - saving money and time by eliminating the need to go to dealerships to update software. Also, faster software fixes can be important when it comes to security.
Finally, OTA updates will be beneficial to the community as a whole. Currently, software updates distributed through dealerships are installed on 70% of cars. This means there are millions of potentially dangerous vehicles on the road that do not have the required software updates. OTA updates are expected to have better numbers - probably above 95%.
OTA updates are currently at their peak (and will continue to grow for the next 5 years). IHS Markit maintains a database that tracks OTA update support across OEMs and models. According to IHS Markit, it can be seen that 30% of cars sold in 2020 will support OTA updates. By 2025, support will grow to 79% of all cars sold in the world.
The following table provides an overview of all the key players in the OTA update market, and company briefs of their strategies. Notably, many OTAs have been bought by larger players. Probably, similar deals will be concluded in the future.
Harman
Harman is a clear leader. In 2015, Harman acquired Redbend, a leader in smartphone OTA updates and a strong position in the automotive segment. In 2015, Harman also acquired Symphony Teleca, a company with a powerful cloud infrastructure. Harman uses all of these resources to serve OTA clients and cloud SaaS platforms. Harman's leadership in OTA updates is so significant that other members have to look for alternative strategies in order to be able to compete.
QNX-BlackBerry
QNX is a leading provider of automotive operating systems, and companies using QNX OS have the ability to upgrade software platforms over the air. BlackBerry, on the other hand, has an IoT platform that has successfully deployed an OTA infrastructure and is successfully used in the automotive industry. QNX is the market leader in real-time automotive operating systems. The safety ratings of their products allow them to be used in all automotive control units.
Wind river
Wind River entered the OTA market with the acquisition of Arynga, an Intel subsidiary. Arynga was a startup with extensive experience with OTAs in telecommunications. Arynga OTA technology is hot-swappable - software can be updated without shutting down the OS. Wind River's OTA platform is called Edge Sync.
Wind River is a provider of various OSes for the automotive industry (such as VxWorks, Wind River Linux, AUTOSAR Adaptive, and a rendering platform called Helix).
Airbiquity
Airbiquity specializes in networking services for the automotive industry. In particular, we can mention their platform for updating software and managing its life cycle called OTAmatic. OTAmatic is a multi-ECU OTA data management solution tailored for the automotive industry. The OTAmatic platform can be used on the facilities of Microsoft Azure or AWS, or it can be installed on the servers of automakers.
Toyota and Denso invested $ 15 million in Airbiquity in 2019, and the companies will collaborate on OTA and software management. Wind River and Airbiquity have announced that they will work together to create an open and flexible OTA solution for the automotive industry.
Excelfore
Excelfore is the developer of a software update platform called eSync OTA Pipeline. This OTA platform is used to update a variety of devices, but is generally targeted at the automotive industry. ESync platform users can work with data for diagnostics or fleet management / analysis. eSync OTA Pipeline is available through Microsoft Azure.
Excelfore has announced a partnership with the eSync Alliance to implement OTA-enabled device interoperability. The eSync Alliance currently consists of 11 companies, including Alps / Alpine, DSA, Excelfore, Faurecia, Hella, Mobica, Molex and ZF.
Many automakers and Tier-1 suppliers use the eSync OTA platform. Infotainment system providers also use eSync products to integrate OTA updates.
Aurora labs
Aurora Labs is a software OTA startup that was founded in 2016 and has currently received $ 34 million in investment from a venture capital fund. Aurora Labs has developed several innovative technologies and has a portfolio of various patents. Aurora Labs markets its product as a "self-healing" software solution that can power the future of connected cars.
Aurora Lab's Line-of-Code Behavior technology lays the foundation for OTA solutions and enables software management. The technology is based on machine learning algorithms that cover all stages of software development - from direct development to use in a car. This technology can be used not only through OTA, and it allows you to write more reliable code with fewer errors.
Basically, the functionality of Aurora Lab products is integrated during the development phase. making it much easier and more cost effective to manage OTA updates throughout the 15-year software lifecycle. This strategy differs markedly from the approaches of other OTA companies that provide after-sales solutions for software updates - their OTA solutions are integrated after the development of the software product.
The disadvantage of Aurora Lab is that it takes a long time to deploy their OTA solution, as their Line-of-Code Behavior technology must be used during the development of Tier-1 or OEM software platforms. It will probably be another 3-5 years before Aurora Lab starts rolling out its products on the road. The long-term performance benefits of automotive software look promising.
Sibros
Sibros is an OTA startup that was founded in 2018 and has currently received $ 15 million in investment from a venture capital fund. The founders of the company have experience in Tesla and Uber. The Deep Connectivity Platform allows you to fully update and collect data from all automotive software.
Transport software platforms include products such as Deep Updater, Deep Logger, Armor cybersecurity, and a proprietary downloader. These products are the building blocks from which you can assemble software solutions for connected vehicles. The Deep Connectivity Platform also includes cloud services for interacting with cloud services from Sibros and its customers.
The Sibros platform is multifunctional, although its main function is OTA updates. Other applications also provide functionality for remote diagnostics, forecasting, fleet management and analytics. The platform can also provide data for usage-based insurance (UBI), smart parking and other connected car applications. Sibros already has several customers in different countries, the company has been supplying its products since July 2019.
Sibros has an innovative strategy that involves working with a networked car platform that can cover different communication segments (and OTA is just one of them).
Tier-1 Suppliers
Some Tier-1 providers provide OTA update functionality via telematics systems and / or IoT platforms. Many Tier-1 vendors also use OTA solutions from the companies listed above.
Aptiv acquired Movimento in 2017 (it was then part of Delphi). Movimento has extensive experience in ECU programming via Wi-Fi OBDII devices. Movimento technology has been used by many OEM and Tier-1 manufacturers. Now their solutions are integrated into the Aptiv Connect platform.
OTA updates from Bosch work through the IoT Suite platform. OTA functionality is also included in the Bosch IoT Rollouts platform. The IoT Suite is available through AWS.
Continental delivers OTA updates through its own telematics systems. Continental has an agreement with Inmarsat, a company that is a leader in global satellite communications and can provide solutions for the distribution of OTA updates.
Lear also uses its own telematics systems to install OTA updates. Lear acquired the intellectual property rights and hired key employees from Autonet Mobile in 2015. Lear announced the launch of its own solutions in its ConneexUs products in 2017.
HERE primarily uses OTA to update maps. HERE acquired Advanced Telematics Systems (ATS) in 2018. ATS specializes in open source software for OTA updates for the automotive industry. ATS also actively supports open-source projects for GENIVI, Auto Grade Linux and Uptane. Uptane is a framework for securely installing OTA updates.
Where is the over-the-air update industry heading?
There are several trends in the OTA area. The most important of these is new usage rules and the need for OTA solutions from leading car manufacturers. Updating all software in the car (including the ECU) is also becoming a key task.
New global regulations (UNECE WP.29) require software updates (millions of lines of code) for future vehicles to be traceable and safe. Adopting these rules will require automakers to have a deep understanding of software behavior in order to obtain the data and evidence that will lead to the required certifications. Regulations could change the OTA market significantly over the next 5-10 years.
OTA updates are becoming an essential functionality that OEMs need to manage software-based vehicles. Thus, most OEMs want more control over their OTA solutions and their respective software platforms.
All of these trends will open up new opportunities, and OTAs will need to innovate. In a sense, these trends are creating market gaps that give innovative companies a chance to compete and big players in the OTA market.
I think both Aurora Labs and Sibros have unique technologies that many automakers could use as part of their OTA strategies. More solutions are expected to hit the market - especially as OTA update functionality and cybersecurity are becoming more important for connected vehicles.
Connected cars are already in use and will only expand over the next decade. Software complexity continues to grow, and wireless updates will be required to fix bugs in hundreds of millions of vehicles. OTA will be an important strategy that enables OEMs to save billions of dollars in cost savings for remote software updates. In addition, functional upgrades will be an additional source of revenue, which will more than offset the cost of deploying an OTA infrastructure.
Basically, automakers want to distribute OTA updates for quality, safety and security reasons. And also to improve the user experience by introducing new features and capabilities throughout the life of the vehicle.
