Almost 20 years ago Amnon Shashua and Ziv Aviram set out to build vision-based safety systems for automobiles via the company that eventually became Mobileye NV Stock not found MBLY. These systems were designed to help cars see the road and communicate with steering and brakes to help prevent crashes.
Mobileye, now known for its chip-based camera systems is helping to lead the onset of the self-driving automotive industry. At the same time, Intel Corp. (NASDAQ:INTCC), which missed its chance to impact the smartphone market, said Monday it would buy Mobileye for $15.3 billion. This time Intel wants to be on time for the new space.
Cars As Computers
The acquisition by Intel is part of strategic plan and also part of an acknowledgement that cars are turning into giant processors, something Intel knows well. In January Intel said it would buy a 15% stake in digital mapmaker Here International B.V.
Intel rival Qualcomm has adopted a similar strategy, agreeing to buy NXP Semiconductors N.V. (NASDAQ:NXPIC) for $39 billion. As with Intel this move is an acknowledgement that automobiles are rapidly becoming computers on wheels.
Plenty Of Players
Intel and Mobileye are not alone when it comes to autonomous automotive systems. Delphi Automotive PLC (:DLPHN/A), Sweden’s Autoliv Inc. (NYSE:ALVC) and others are competitors of Mobileye but also work with the company as partners when warranted.
Others in the space including Google parent Alphabet Inc. (NASDAQ:GOOGC) are moving quickly to develop this new technology. Vehicle makers like Ford Motor Co. (NYSE:FB), General Motors Co. (NYSE:GMC) and Tesla Inc. (NASDAQ:TSLAC) are also partnering with a number of startups, including many in Israel, buying stakes or building R&D centers.
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The Road To Autonomy
The Intel/Mobileye tie-up and other partnerships and mergers are not happening just because companies see opportunity for growth in autonomous vehicles. The development of totally self-driving cars is still several years away.
Companies realize that the road to autonomy will be paved with profit from semi-autonomous vehicles, robotic systems and other types of technology that will help acclimate drivers to the notion of letting go of the wheel – eventually.
Intel CEO Brian Krzanich said he believes self-driving technology will be a $70 billion industry by 2030. That kind of revenue won’t happen all at once. Over the next decade plus automotive autonomy will generate billions of dollars for the many companies, startups and acquirers that patiently figure out how to carve out their slice of the profit pie.