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Intel is expanding its self-driving cars strategy with its $15bn acquisition of Israeli computer vision company Mobileye. Although Intel and Mobileye had already partnered with BMW to introduce autonomous cars by 2021, this purchase signals Intel's intention to challenge rival Qualcomm in the autonomous driving space, following Qualcomm's acquisition of NXP Semiconductors. After missing out on smartphones, Intel cannot afford to miss out on another big wave of consumer technology.

Acquisition of Mobileye to feed into Intel's existing virtual reality and connected car strategies

Beyond its existing partnership with Mobileye and BMW, this purchase is not Intel's first foray into autonomous and connected cars. The company bought San Francisco–based Itseez and Italy's Yogitech in 2016, which focus on computer algorithms and functional safety for semiconductors, respectively, and fit the companies into its IoT group. Intel says that IoT is already one of its primary growth engines, along with data centers, and the two segments account for nearly half of its revenues.

In November 2016, Intel formed a working group that is focused on autonomous driving, to take advantage of the growing popularity of the technology and to continue the work it did on driver assistance technologies with auto OEMs that have incorporated its chips. Intel's investment arm, Intel Capital, also announced a $250m investment in autonomous car technology at the same time.

Intel's forays into providing chipsets for smartphones haven't always been as successful as those of its rival Qualcomm. Therefore, this purchase, in common with its other purchases in IoT, is intended to give the company the expertise to build chipsets for non-PC and non-smartphone types of connected devices. In addition, buying Mobileye makes Intel one of the most active acquirers in the connected and autonomous cars space. According to Ovum's IoT Investments Tracker: 2H16, Intel has now made three purchases in the sector, ahead of Verizon's two (Hughes Telematics and Telogis).

Looking forward, the Mobileye acquisition puts Intel in a strong position to build out its autonomous and connected car activities, thanks to Mobileye's experience in building autonomous systems for OEMs such as Tesla (although Mobileye and Tesla are embroiled in a disagreement and are ending their relationship). In addition, Mobileye's expertise in object recognition will also feed into Intel's other work in robotics, virtual reality, and computer vision.


Further reading

IoT Investments Tracker: 2H16, TE0019-000024 (December 2016)

"Computer vision: Intel’s acquisition of Movidius expands its future beyond RealSense," TE0004-001110 (September 2016)

"Virtual reality: Intel targets all-in-one headset and Microsoft partnership to bring VR into the mainstream,” TE0004-001103 (August 2016)


Francesco Radicati, Senior Analyst, Consumer Technology

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