By Charles King, Pund-IT, Inc. March 15, 2017
Intel jolted more than a few industry watchers this week with its planned $15.3B acquisition of Mobileye. That’s a tidy sum for a company that is mostly recognized for developing innovative Advanced Driver Assistance Systems (ADAS) that support passive alert and active safety systems capabilities for automobiles and trucks. Those technologies have led Mobileye into successful relationships with all Tier 1 automotive industry suppliers and 27 OEMs that are implementing the company’s solutions in the serial production of 313 car models.
But as Mobileye notes on its company site, active safety system features, like Adaptive Cruise Control (ACC), Lane Keeping Assist (LKA), Lane Centering (LC) and Traffic Jam Assist (TJA) “comprise the building blocks of semi/fully autonomous driving.” That point was given top line billing in Intel’s announcement concerning the deal and in letters that both companies’ senior executives (Intel’s CEO Brian Krzanich and Mobileye’s co-founders Amnon Shashua and Ziv Aviram) wrote their employees.
Autonomous driving is an active focus point for numerous other IT industry heavyweights, including Google, NVIDIA, Uber and Apple (reportedly), and with good reason. As Intel’s Krzanich noted, the estimated market for these solutions will be $70B by 2030, representing a rich target for tech vendors preoccupied with the Next Big Thing. Perhaps the larger questions, then, are what Intel and Mobileye together will bring to the party, and why the pair believes they have what it takes to beat the competition.
Let’s take a closer look at that.
Car to cloud to car
The largest strategic factor to consider regarding Intel and Mobileye is that autonomous driving is essentially an infrastructure play. That is, in autonomous driving scenarios Mobileye’s advanced onboard cameras and related software and other system components are heavily reliant on and gain significant additional value from the memory, storage, wireless networks and backend cloud data centers required for many autonomous functions and processes.
That’s partly due to an issue that Krzanich brought up in his letter to employees: An average autonomous car will create and utilize four terabytes of data for every day it is on the road—about the same amount of data created by 3,000 people. Or as Intel’s CEO eloquently noted, “Put just one million autonomous cars on the road and you have the data equivalent of half the world’s population.”
That data has to be collected, initially analyzed, transmitted to high performance cloud facilities for additional analysis and then returned to the vehicles that generated it, often in near-real time. If you think that’s complicated, add in the catastrophic, even fatal problems that could occur if systems glitch, networks misfire or clouds disperse. In any case, it’s easy to see why vendors pursuing autonomous driving need to be as serious about dependability as they are about innovation.
Intel gets that point in a very big way and has a history of developing innovative, trustworthy technologies that millions of individuals and organizations bet their lives on both professionally and literally. The company focused clear attention on the value that the innovative FPGAs, 3D Xpoint memory and 5G modems will bring to the strategic initiatives that Mobileye will drive as the core organization and leadership in Intel’s new Automated Driving Group (ADG).
But without Intel’s dependably proven Xeon processors and other foundational cloud and data center technologies, autonomous driving solutions would be stranded by the side of the road with the night coming down.
Building an industry standard stack
Those points also underscore the larger play regarding Mobile. Given the broad, enthusiastic adoption of its ADAS and other solutions among auto industry Tier 1 suppliers and OEMs, and Mobileye’s current place in over 300 car models, acquiring the company provides Intel a critical piece for creating an integrated, industry standard component stack for autonomous driving. That should open the door to numerous new business alliances and opportunities, but it also puts a thumb firmly in the eye of NVIDIA, Intel’s most ambitious challenger in this market.
It’s also worth noting that Intel’s broader integrative vision and strategy regarding Mobileye and autonomous driving is reminiscent of other past company initiatives. For example, beginning in the early 2000s Intel made significant strides in integrating wi-fi and WiMax wireless functionalities into its notebook-focused CPUs. That effort came to fruition in the Centrino-branded chips the company introduced in 2004 and then extended via a partnership with Nokia and the wireless roadmap it revealed at the 2006 Intel Developer Forum.
Centrino enabled Intel to establish a forward-looking leadership position in PC wireless chips, and allowed the company’s OEM partners to develop laptop systems that were thinner and lighter than ever before. But Centrino also displaced numerous suppliers’ plug-in PCMCIA and USB cards for wireless connectivity. In other words, Intel’s integrated, industry standard wireless stack helped the PC market evolve in a more orderly, sustainable manner than it had previously.
Whether integrating car-to-cloud-to-car functionalities via the Mobileye acquisition will have a similar effect on autonomous driving is impossible to say at this point. However, the deal reflects a strategic vision Intel has pursued and a road it has traveled to success many times in the past. Whatever destination the company’s new Intel Automated Driving Group pursues, Intel’s vision and its deal for Mobileye will fundamentally change the market and market dynamics for autonomous driving.
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