Publisher Summary This chapter explains the concepts of a system and a subsystem, and how such systems function. The means for characterizing the performance of any system, and the relative benefits and limitations of automotive electronic systems are highlighted. The chapter explains what a system is, and, more precisely, what an electronic system is. Basic concepts of electronic systems that are applicable to all automotive electronic systems, such as structure (architecture) and the principles of quantitative performance analysis are also discussed. Two major categories of electronic systems—analog or continuous time and digital or discrete time—are explained. The relatively low cost of digital electronics coupled with the high performance achievable relative to analog electronics has led modern automotive electronic system designers to choose digital rather than analog realizations for new systems.