Intel’s multi-billion dollar acquisition of Mobileye has sent ripples across the driverless car sector with experts and analysts sending out mixed reactions about the purchase.
While many are claiming that the deal is a fair one from Intel’s perspective as it managed to add to its portfolio one of the best companies out there known for range of products including driver-assistance and anti-collision systems, there are those who suggest that the deal could take Intel into unchartered territory where it has little expertise.
Intel will be handing out a whopping $15.3 billion for Mobileye and this deal will put the semiconductor giant right against the likes of Nvidia Corp and Qualcomm Inc who are already working towards developing chips for driverless cars and systems for global automakers. The acquisition will help Intel etch out a path for itself in very lucrative and yet untapped market, which according to Goldman Sachs will value at $96 billion in 2025 and $290 billion in 2035.
Many driverless car technology start-ups have emerged on the scene lately, but Mobileye has been around since 1999. The company has managed to grow its portfolio from driver-assistance and anti-collision systems to a number of modern-day technologies including car cameras, sensor chips, in-car networking, roadway mapping, machine learning, cloud software and data fusion and management. This broad portfolio will give Intel a kick-start that will put in the league of driverless car technology leaders, if not ahead of them.
Intel paid a whopping 21 times the expected 2017 revenue to acquire Mobileye and some analysts are calling it a very expensive transaction. Several other start-ups are working on similar technologies and hold huge promise, but it seems that the expertise and maturity that Mobileye has garnered over the years has appealed to Intel.
According to Intel, Mobileye will have complete autonomy and the computer chips maker will be integrating its own group responsible for development of autonomous driving technologies with Mobileye’s operations that will be led by Mobileye Chairman Amnon Shashua. Mobileye and Intel are already working with BMW in a project geared towards bringing around 40 self-driving test cars on the road in the second half of 2017.
Qualcomm acquired NXP last October for $47 billion and that effectively forced other semiconductor giants to pursue the driverless car segment. Intel’s latest acquisition might not be as huge as Qualcomm’s, but it has been enough to raise brows and get the driverless car industry take note.