IoT & Embedded Technology Blog

PART II: GOOGLE/Motorola Acquisition Likely to Impact Embedded Market More than Mobile

So what does this mean for the embedded market?

VDC has been tracking Android closely over the recent years as we have seen the appetite for and applicability of the platform grow within applications classes beyond mobile phones. Set top boxes and industrial ruggedized terminals are just two of the many use cases that embedded OEMs are now experimenting with. In quick response, many participants within the larger ecosystem of embedded software and hardware solution providers have aligned themselves to support development of the platform in these new use cases. In some instances, the embedded market potential for Android has even cannibalized the available market for traditional embedded Linux offerings.

Will this announcement and the associated fears regarding the sustainability of Android’s core mobile ecosystem impact embedded OEMs desire to embrace the “open” platform?

Clearly, it is hard to alter the momentum of an industry movement that has accelerated as quickly as Android has over the past few years. However, its penetration within the embedded market is still in many cases experimental. As compared to the mobile phone segment - there is not yet as robust of an ecosystem of solution providers or leveragable third-party content available for many of the hardware architectures or form factors in use within the broader embedded market today. The acquisition just may derail – or at least – slow down Android’s appearance in some embedded device classes.

Obviously, the nature of the embedded market with its often multi-year development cycle means that we will continue to see Android emerge in a higher percentage of development projects in the near future. We what can now expect, however, is that OEMs will increasingly look to hedge their own investments around OS platforms. This trend, which was initially instigated by the acquisitions of MontaVista and Wind River two years ago, will surely accelerate going forward, especially in the increasingly fickle consumer-facing device classes.

Given the potential increase of parallel (and ultimately superfluous) project development streams at OEMs, we expect that embedded OS vendors will need to reevaluate their engagement strategies and business models. In the recent past, there has been a growing movement for embedded OS vendors to offer flexible licensing terms, with OEMs choosing between term, subscription, and/or per unit device fees. The increase in the cost of sales – or rather the potential for decreases in the design in/deployment rates – will place increasing pressure on the production license model, with the risk/reward benefits shifting further into the OEMs favor.

If nothing else, Android helped to establish a demand for robust, commercially viable open source operating software stacks that can offer a depth of functionality beyond what Linux itself can offer. The rise of Android, however, has largely suffocated the efforts supporting platforms such as LiMo and MeeGo. This Motorola-Google acquisition could help resuscitate the market’s need for other open source or consortia-based operating system platforms. The larger question for the embedded market is if Android is no longer the right fit (and it probably still is) then what organization or consortia can pick of the mantle?