The OTA Service API Library is designed to enable users to download firmware or binary images to their host device and store it in the flash memory. This can be utilized in conjunction with a host bootloader application for upgrading user applications. OTA service communicates with File handler and Transport service to initiate the download and save it to the memory. It also verifies the downloaded image and updates the control block with essential information for the bootloader, such as the program location,jump address, etc. Overall, the state machine layer ensures a smooth and efficient firmware download process.