ISOBUS Component Market

Market Overview

The global ISOBUS component market size was worth USD 695 million in 2022 and is estimated to reach an expected value of USD 1,472.48 million by 2031, growing at a CAGR of 8.7% during the forecast period (2023–2031).

Key Highlights

• Tractors dominate the application segment
• Software dominates the product segment
• North America is the highest contributor to the global market

ISOBUS or ISO11783 is the standard protocol regulated by the International Organization of Standardization (ISO) and Agricultural Industry Electronics Foundation (AEF) for inter-device communication among agricultural equipment. ISOBUS was developed in 1990 to improve inter-device connectivity and communication in the agricultural field. This is because multiple types of equipment are used in the farm simultaneously, such as tractor, harvester, planter and seeder, and sprayer. Most of this equipment does not possess an electronic control unit (ECU) and is connected to a tractor for use in the field. The connection between the different equipment with the tractor has been the primary driving force for achieving ISOBUS.

With the increased acceptance of ISOBUS standards in the agricultural equipment industry, synergistic partnerships have increased among the leading agricultural equipment manufacturers. Since the ISOBUS component offers the capability of using two pieces of agricultural equipment from different manufacturers, the manufacturers have started developing products with standard ports and compatibilities. Thus, ISOBUS agricultural equipment can be connected to equipment from other manufacturers. This saves a farmer from purchasing a completely new agricultural setup upon equipment failure.

Market Dynamics

Global ISOBUS Component Market Drivers

Need for Standardized Communication Between Agricultural Equipment

In the agricultural industry, multiple pieces of equipment are required to complete a specific task. The equipment used in agricultural activities includes tractors, equipment, cultivators, harrows, seed drills, and rollers. It has always been an issue among agriculturalists to correctly match and use different equipment to reduce operation time and increase efficiency. ISOBUS standard has brought a solution to this long-standing problem.

ISOBUS or ISO 11783 standard has helped achieve communication between different agricultural equipment as the standard specifies an essential requirement to be met in each piece of equipment. The standard makes it possible to manage the communication between tractors, software, and equipment by other manufacturers, allowing the exchange of data and information with a universal language through a single control console in the tractor's cab.

With the increased usage of ISOBUS-compliant equipment in the field, field workers have realized the need for ISOBUS as the standard has increased efficiency, productivity, and transparency. Also, the data collected using ISOBUS equipment can be used for remote fleet management and diagnostics of agricultural activities. GPS-enabled systems can measure the status and position of tractors, track their productivity and receive updates in case of any variation. Thus, the need for standardized communication between agricultural equipment has become a crucial driver for the global ISOBUS component market.

Need for Increased Production to Cater to the Growing Population

The global population stood at 7.3 billion in 2021 and is expected to reach 9.1 billion by 2050. The current agricultural industry production needs to be increased to cater to the growing population. With the increasing population, the demand for food is also increasing. ISOBUS standard-compliant products in the agricultural field can significantly help tackle the growing demand for food.

With ISOBUS-compliant equipment, productivity and efficiency in the field can be increased as the products offer remote farm management solutions. This would help the farmers in managing multiple tasks at multiple domains remotely. Also, with the ISOBUS component, autonomous farming equipment can decrease human efforts and increase efficiency with machine-operated farming activities.

The deployment of ISOBUS equipment in the field reduces human efforts, and the farm can be managed mechanically. The equipment will not only increase productivity but will help reduce human error and dependence in the field. Thus, the increased production demand is driving the global ISOBUS component market.

Global ISOBUS Component Market Restraint

High Initial Investment for Complete ISOBUS System

A farming operation setup requires various products to complete on-field activities, including tractors, equipment, cultivators, harrows, seed drills, and rollers. Some of these products are used individually, while some tasks require multiple pieces of equipment working together to complete the operation. ISOBUS standard-compliant products work more efficiently than the conventional agricultural equipment setup.

There needs to be more than one ISOBUS-compliant product to solve the purpose of inter-equipment communication and compatibility. To establish successful communication between two pieces of equipment, both should be ISOBUS compliant. The initial cost of achieving an all-ISOBUS setup can be high; the prices increase with better technology and up-to-date products. Thus, a farmer might be reluctant to opt for ISOBUS products due to the high initial investment. This can act as a hindrance to the growth of the global ISOBUS component market.

Global ISOBUS Component Market Opportunities

Increased Emphasis on Smart Farming

Smart farming is widely considered to be the future of the agricultural industry. It is an emerging concept that aims at farmers using technologies such as IoT, robotics, drones, and artificial intelligence to increase the quantity and quality of products while optimizing the human labor required by production. ISOBUS standard-compliant products can be one big step in successfully implementing smart farming in the agricultural industry.

With smart farming, different up-to-date equipment is expected to be used in the field, such as smart sensors for soil and temperature management, GPS and satellite connectivity, robotics in autonomous tractors, and data analytics solution such as standalone analytics solutions for a better understanding of field activities. Equipped with such tools, farmers can monitor field conditions without visiting the field physically and make strategic decisions for the whole farm or a single plant. ISOBUS standard-compliant products and sensors can help develop smart farming technologies globally as with connected machines, dependability on humans will reduce, and production efficiency will increase with automated robotics.

Regional Analysis

Based on region, the global ISOBUS component market is segmented into North America, Latin America, Europe, the Middle East and Africa, and Asia-Pacific. 

North America Dominates the Global Market

North America is the highest revenue contributor and is estimated to exhibit a CAGR of 7.8% during the forecast period. North America is one of the largest markets for ISOBUS standards. The agricultural industry is one of the major industries in the North American region. The growth in the agricultural sector in the region has added to the change of ISOBUS standard-compliant equipment in the field. The U.S. has led developments in seed improvement, such as hybridization, and expanding uses for crops from the work of George Washington Carver to bioplastics and biofuels. The agricultural equipment manufacturers operating in the region have implemented ISOBUS standards to their products, widening their portfolio. Also, the ISOBUS standard has enabled communication between equipment from different equipment manufacturers. This has led to increased synergistic partnerships between other agricultural equipment manufacturers. For instance, in November 2020, CNH Industrial N.V. announced a collaboration with Microsoft and Accenture to assist the capital goods company to enhance its digital capabilities and develop smart connected products and services.

Europe is the second largest region and is anticipated to grow at a CAGR of 7.1% during the forecast period. Agriculture has shaped Europe's landscapes for thousands of years and is still one of the principal sectors impacting Europe's economy. In the last decade, the environmental conditions in the region have caused the European farming industry to accept eco-friendly farm production techniques. The newest technologies in the agricultural field, such as agricultural robots, variable rate technology, and ISOBUS equipment, have improved the farm sector in the region with minimal resource wastage, such as water, pesticides, and labor, to meet the demand for rising production. The countries in the Europe region have realized that deploying new technologies in agricultural activity would make it profitable. Thus, the farmers in this region have taken initiatives to adopt new technologies in the field, including ISOBUS equipment.

Asia-Pacific and Japan is the third largest region. As per the United Nations, over 60% of the world's population lives in the Asia-Pacific region, which is projected to grow exponentially. This has raised a concern about food inefficiency in the area. In this region, the agricultural industry is one of the industries that significantly impact the country's GDP. Thus, development in agricultural technology is crucial in these regions to enhance their agricultural sector and cater to the growing population. Therefore, farmers in the region are now concentrating on rising crop yields and providing an all-year supply of agricultural products to satisfy the increasing demand for food.

Segmental Analysis

The global ISOBUS component market is segmented by product, application, and region. 

By application, the global market is segmented into the tractor, harvester, planter and seeder, and others. 

The tractor segment dominates the market and is estimated to exhibit a CAGR of 8.7% during the forecast period. The ISOBUS tractor provides several devices and components. The virtual terminal is mounted on the tractor to allow the operator to control connected equipment. This makes any separate equipment control box unnecessary and thus increases space in the tractor cabin. The leading agricultural tractor manufacturing companies include Deere and Company, AGCO Corporation, CNH Industrial N.V., and CLAAS KGaA mbH. Manufacturers keep on introducing new and updated tractors with ISOBUS and non-ISOBUS compliance. For instance, in August 2020, Fendt, an AGCO Corporation agricultural equipment brand, announced six new models of the 700 Gen 6 tractor line with 144 to 237 hp.

The harvester segment is the second largest. ISOBUS standard has helped in improving the harvesting process in the field. The ISOBUS standard compliant combines to give maximum output and increased reliability of the harvesting process when operated with a tractor. Agricultural equipment manufacturers offer other equipment for better usage of ISOBUS harvesters. For instance, Hexagon Agriculture offers HxGN AgrOn haul-out dynamic allocation, a synchronized system for haul-out transporter allocation, and harvesters' cutting pace.

By product, the global market is segmented into hardware and software. 

The hardware segment owns the highest market share and is estimated to exhibit a CAGR of 6.8% during the forecast period. The global ISOBUS component market in the product segment is expected to be dominated by software products owing to the recent push toward digitization and remote access of the field, especially in countries with a growing agricultural sector. The mobile applications allow control over the field activities such as fleet management systems, crop protection, etc. Also, virtual terminals have made multiple equipment control in the field easy, with only a single terminal able to control various equipment.

The hardware segment is the second largest. Since the establishment of the ISOBUS standard, the primary focus of the standard has been to develop inter-device communication hardware between agricultural equipment, thereby increasing production and efficiency in the field. With the development of the standard and the emergence of various agricultural equipment manufacturers deploying ISOBUS standards in their products, a wide range of products is being developed with ISOBUS standard compliance. Some key players operating in the global ISOBUS component market are Deere and Company, CNH Industrial N.V., and AGCO Corporation, with their agricultural equipment brands Massey Ferguson and Fendt.

Recent Developments

• March 2023 - Hexagon subsidiary AGTEK Development Corporation announced the release of the Gradework software suite for 2023 and the introduction of its standalone programs Materials SA and Underground SA. The additional features would make takeoff and production control easier for earthmoving, installing utilities, and using construction supplies.
• March 2023 – A collaboration between Altium and Hexagon's Manufacturing Intelligence division promoted more environmentally friendly electronic design and production. The partnership combined Altium's strengths in PCB design and electronics supply chain intelligence with Hexagon's expertise in integrating information from design and engineering, manufacturing, and metrology to help businesses understand the effects of product development decisions on the sustainability of electronics and smart products.
• February 2023 - Nexus was introduced by Hexagon AB, a leader in digital reality solutions combining sensor, software, and autonomous technologies. Nexus is an open, flexible, future-ready digital reality platform purposely built for the discrete manufacturing ecosystem – from aerospace, automotive, and electronics to consumer products and general manufacturing. For the first time, stakeholders across engineering, manufacturing, and quality disciplines can easily connect, collaborate and exchange data in real-time to accelerate new and innovative approaches to making higher-quality products more efficiently and sustainably.