Embedded AI Market Analysis

Embedded AI Market (Global, 2024)

Introduction

Artificial intelligence is on the verge of revolutionizing the way in which smart systems are built into everyday objects to increase their functionality and efficiency. In all areas of industry, from cars and health care to consumer products and industry, the demand for smart systems is growing. The integration of artificial intelligence into embedded systems is becoming increasingly important. This market is characterized by the combination of sophisticated algorithms, machine learning, and miniaturized hardware that allows objects to process data locally and make decisions in real time. In addition, the spread of the Internet of Things is driving the implementation of embedded artificial intelligence, as companies seek to optimize their operations and improve the customer experience. In the coming years, the market for embedded artificial intelligence is expected to see considerable innovation, resulting in a competitive advantage for companies that adopt these transformative technologies.

PESTLE Analysis

Political

In 2024 the political landscape of the Embedded AI market is dominated by government initiatives to promote AI. For example, the US government has allocated around $ 1.5 billion to fund the development of AI, including Embedded AI in various industries, such as health care and automobiles. The European Union is proposing new regulations that could affect over 500,000 AI-related companies in its jurisdiction.

Economic

The economic environment in 2024 for the Embedded AI market is characterized by increased investment in AI. VC investment in AI-startups is estimated to reach $ 30 billion in 2024. This reflects a growing confidence in the potential of embedded AI in the various industries. The labor market is also undergoing a transformation. By 2024, over a million new jobs are expected to be created in the field of AI. This means that there is a strong demand for skilled employees in this area. These economic developments are expected to increase innovation and competition in the Embedded AI market.

Social

In 2024, there is an increase in social acceptance of AI. The percentage of people who are willing to use AI in their daily life has reached about seventy percent. This shift in public opinion is of crucial importance for the embedded AI market, because it encourages manufacturers to develop and implement embedded AI. Moreover, educational institutions have reacted to this trend. Today, more than 200 universities worldwide offer special courses in AI and machine learning, in order to train the workforce for the future AI-based economy.

Technological

In 2024, technological developments will be rapidly shaping the Embedded AI market. New semiconductors have given Embedded AI systems a 25% increase in processing power, enabling more complex and resource-efficient applications to run on smaller devices. Also, the spread of edge computing is facilitating real-time data processing, with up to 50% of all AI calculations to be performed at the edge by 2024. This technological development is driving innovation and enabling the expansion of Embedded AI applications.

Legal

The legal framework for the market for embedded AI is becoming increasingly complex in 2024. The European Union introduces the AI Act to regulate the use of high-risk AI, which will apply to about 15 per cent of all currently in use AI systems. It imposes strict guidelines on companies, including transparency and accountability measures, which may lead to increased operating costs. In addition, intellectual property rights are being questioned. In Europe alone, more than 1,000 patent applications for AI-related inventions have been filed, underscoring the need for clear legal definitions in this developing area.

Environmental

In 2024, the impact of the Embedded AI market on the environment will come to the fore, with the emphasis on sustainable development. About 40 per cent of AI companies are already prioritising the reduction of energy consumption in their AI algorithms and the use of recycled materials in the manufacture of their hardware. In addition, the drive towards carbon neutrality has led to the development of new Embedded AI systems to optimize the use of energy in smart grids, which could reduce energy waste by 30 per cent in urban areas. These new products are establishing the companies operating in the Embedded AI market as the market leaders.

Porter's Five Forces

Threat of New Entrants

The Embedded AI Market in 2024 is moderately vulnerable to new entrants. The market is growing rapidly, but the high level of technical knowledge and the significant capital required to develop competitive AI solutions act as barriers to entry. The economies of scale and the brand name of the established players can deter new entrants. However, in the long run, the development of open-source AI tools and cloud computing will lower the barriers to entry.

Bargaining Power of Suppliers

Suppliers on the Embedded AI Market have a low bargaining power, because of the abundance of components and technology. The market is characterized by a wide range of suppliers, both hardware and software suppliers, which weakens the power of any individual supplier. Moreover, companies can often change suppliers without significant cost, which further reduces the suppliers' power.

Bargaining Power of Buyers

High—Buyers in the Embedded AI Market have high bargaining power, as they have many choices. Competition for Embedded AI solutions is high, and buyers can demand better terms and lower prices. In addition, as buyers learn more about the technology, they will demand better quality and more customization, further enhancing their bargaining power.

Threat of Substitutes

The threat of substitutes in the embedded AI market is moderate. There are alternatives that can perform similar functions, such as traditional coding and simpler automation tools, but the unique capabilities of embedded AI solutions often provide substantial advantages. However, as technology evolves, new substitutes may appear, which could increase the threat of substitutes.

Competitive Rivalry

The Embedded AI market is highly competitive, with a large number of established players and new entrants competing for market share. There is intense competition, with companies constantly trying to improve their offerings to stand out from the crowd. This leads to aggressive marketing strategies and price wars. Competition is also heightened by the fast-paced nature of technological innovation. Firms are trying to stay ahead of the curve in this fast-moving market.

SWOT Analysis

Strengths

• Integration of AI capabilities into various devices enhances functionality and user experience.
• Growing demand for automation and smart technologies across industries.
• Strong investment from tech companies in AI research and development.

Weaknesses

• High initial costs associated with the development and deployment of embedded AI solutions.
• Limited understanding and expertise in AI among some manufacturers.
• Potential for increased complexity in product design and maintenance.

Opportunities

• Expansion of IoT devices creating new markets for embedded AI applications.
• Rising consumer demand for personalized and intelligent products.
• Advancements in machine learning algorithms improving efficiency and performance.

Threats

• Rapid technological changes leading to potential obsolescence of current solutions.
• Regulatory challenges and concerns regarding data privacy and security.
• Intense competition from emerging startups and established tech giants.

Summary

The Embedded AI Market in 2024 is characterized by strong positive factors such as improved functionality and high investment. On the other hand, the challenges of high cost and complexity are still present. Opportunities are mainly based on the growing IoT and the demand for intelligent products from consumers. Threats include rapid technological development and regulatory issues. Strengths and opportunities must be used by companies in order to survive in this changing market.