Intel makes two huge self-driving car moves (INTC)
New announcements from Intel about its self-driving car plans indicate that the company could be gearing up to become a leading supplier of chips for autonomous vehicles.
It's expected that demand for processing power in vehicles will increase drastically as self-driving cars become more popular, and Intel's latest moves could indicate the company is becoming an early leader in the space.
Intel made two big announcements:
- The company will partner with Mobileye and Delphi to supply systems for self-driving cars, according to the New York Times. The partnership will incorporate Intel's Core i7 microprocessors, Mobileye's sensor networks, and Delphi's radar system to build systems for self-driving vehicles, which the companies will then likely seek to sell to automakers who build the physical vehicles. Such deals might be modeled after existing partnerships of a similar nature, such as Mobileye and Intel's agreement to offer autonomous driving solutions to BMW. In addition, by partnering with Intel, Mobileye and Delphi could more quickly reach their goal of building a driverless car system and bringing it to market by 2019.
- Intel has carved out a separate “Automated Driving Group” within the company. The group, which will focus on building out driver assist technologies and self-driving solutions, will likely focus on unifying Intel's self-driving data and technology operations, with a goal of perfecting its self-driving car solutions. For context, the chipmaker has made a series of investments in self-driving technology over the past year, highlighted by $250 million in investments last month. Such a group could help Intel better allocate its resources and will likely be a helpful strategic move for the company.
While Intel increasingly appears ready to succeed in the autonomous vehicle market, it could still face challenges because of its background. Intel's main focus has been designing chips for PCs and other general computing devices, which means it doesn't have extensive background in automotive technology and the specialized chips made for vehicles.
That means that, while the firm brings a lot of resources to the table, it's not as specialized as a designer like NXP, and could start out behind. Bringing companies like Mobileye, which specializes in sensors for autonomous driving systems, could help them overcome these hurdles.
Intel’s big bet on self-driving cars could signify that the market is maturing beyond its early stages. First and foremost, Intel is a world leader in the microchip space. The company's decision to invest and organize in the self-driving automotive sector shows that the market is heating up — BI Intelligence forecasts that 5.5 million self-driving cars will be shipped in 2020 — and that companies with limited background in the space are making aggressive and financially substantial moves to enter it. Moving forward, it will be worth monitoring if Intel faces increased competition as it positions itself and builds a reputation in the automotive market.
BI Intelligence, has compiled a detailed report on self-driving cars that examines the major strides automakers and tech companies have made to overcome the barriers currently preventing fully autonomous cars from hitting the market. Further, the report examines global survey results showing where fully autonomous cars are highly desired.
Here are some key takeaways from the report:
- Three barriers have been preventing fully autonomous cars from hitting the road: 1) high technological component prices; 2) varying degrees of consumer trust in the technology; and 3) relatively nonexistent regulations. However, in the past six months, there have been many advances in overcoming these barriers.
- Technology has been improving as new market entrants find innovative ways to expand on existing fully autonomous car technology. As a result, the price of the components required for fully autonomous cars has been dropping.
- Consumer trust in fully autonomous vehicle technology has increased in the past two years.
- California became the first US state to propose regulations. California's regulations stipulate that a fully autonomous car must have a driver behind the wheel at all times, discouraging Google's and Uber's idea of a driverless taxi system.
In full, the report:
- Examines consumer trust in fully autonomous vehicles
- Identifies technological advancements that have been made in the industry
- Analyzes the cost of fully autonomous technology and identifies how cost is being reduced
- Explains the current regulations surrounding fully autonomous cars
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