Intel – Auto ambition

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Intel must break out of the mould that success has cast for it.

  • The acquisition of Mobileye by Intel highlights both Intel’s determination not to miss the next big trend as well as the concentration of Google’s competitors around HERE.
  • Intel will buy Mobileye for $15.4bn and merge it with its existing autonomous driving business to create one of the leading supplier of autonomous driving systems.
  • Intel already has a substantial effort in this space but adding Mobileye gives it a very strong position in visual sensors and most importantly, gives it direct access to 80% of the automotive market.
  • These doors were already open for Intel but I think that going in with Mobileye will ensure that the automotive industry takes it much more seriously.
  • I think that missing the boat in mobile has damaged Intel’s reputation to the point where some potential customers think that Intel has little to offer beyond chips for PCs and chips for servers.
  • In reality, this is very far from the truth but dispelling that impression is one of the most important tasks that Intel faces over the next few years.
  • The fact that Intel will soon become one of the top 4 shareholders of HERE will also help in improving its credibility in both location and automotive.
  • This is because HERE is the only realistic alternative to Google in high definition maps for autonomous driving which are now recognised as essential for a car to drive itself.
  • Even Mobileye, which early in 2016 was adamant that a HD map was not needed, has caved in and is now working with HERE to use its HD map in its systems.
  • In addition, other ecosystems such as Tencent, Baidu, Facebook and Amazon are also working with HERE for their location data, all of which will benefit Intel as it tries to break the mould that the market has set for it.
  • Mobileye represents that second largest acquisition in Intel’s history underlining the need for semiconductor companies to move into markets beyond consumer electronics and PCs.
  • This is why Qualcomm is buying NXP and why Samsung is buying Harmon.
  • Intel has now armed itself with the potential to offer an end to end solution for autonomous driving but the key to success will be how well it can execute on that offering.
  • History is not in Intel’s side but I detect a change in the way Intel thinks about its place in the world that just might allow it to break the x86 mould that history has cast for it.