This week’s focus is on the connected car industry and more specifically, the enormous Intel-Mobileye deal. Here's what our insiders shared:
Kurt Hoppe, Global Head of Innovation, Connected Cars, General Motors
What does Intel’s $15.3B acquisition of Mobileye mean for the IoT industry at large? Intel’s acquisition of Mobileye confirms the IoT industry continues to permeate mainstream ecosystems and devices, in this case mass-market automotive electronics. Intel is a high-volume, mass-market, semiconductor producer, so this acquisition tells the world that ADAS (Advanced Driver Assistance Systems) are no longer a feature that will be limited to high-end, niche market, luxury cars. Many of the next billion cars to roll off the assembly line over the next decade will incorporate such IoT technologies which enable constantly improving connected consumer (and fleet) services. Intel was clearly ready to increase their exposure to this large and rapidly growing IoT market of Connected Cars, much like Samsung (who recently acquired Harman) and Qualcomm (who acquired NXP) over the past year.
Do you expect this to trigger a flurry of M&A activity around autonomous driving technology? Individuals, companies and investors have been recognizing next-gen automotive electronics and services opportunities over the past 6-12 months. I shifted from Smart Home to Connected Car myself in 2016 to help General Motors’ develop more of an IoT perspective on innovation activities. Autonomous driving is clearly an exciting story that is unfolding rapidly for many players, but in my opinion, the Mobileye acquisition is more of a validation of the larger, immediate, global Connected Car growth opportunity. The underlying automotive software, sensors, and processors will need to be updated over the next 5 years. So, as in any industry, companies with unique technology, talented founders, and large global automotive customers will continue to be M&A targets.
Does this accelerate the timeline of when driverless and connected cars become ubiquitous? Connected Cars are increasingly commonplace in North America, as well as many parts of Europe and Asia. Analysts are predicting 50% of new car shipments will be connected within 2 to 3 years, and hundreds of millions of cars will be connected in less than five. This is like Smart TV in 2012 as an industry and product category undergo massive disruption, providing opportunities for new and existing technology players to layer their solutions onto the new platforms. For 1-2 ton devices that can travel at 80 miles per hour, there is a significant interest in leveraging beneficial technologies like Mobileye’s to ubiquitously improve safety features and ADAS. I have been around long enough to know that changes in mass market consumer behavior usually take longer than the early adopters want, but I am thankful to have a front row seat in this adventure.
Linda Bernardi, Founder & CEO, StraTerra Partners, LLC
What does Intel’s $15.3B acquisition of Mobileye mean for the IoT industry at large? The recent acquisition of Mobileye by Intel is definitely a spark in the momentum of the IoT Industry. Intel as a chip manufacturer (the ‘thing’ that goes into all other things) is a natural player in IoT, but for the last few years has taken a back seat in this space. This is not to say Intel does not do a ton with IoT, but has had a hard time establishing a vision and leadership in the space of IoT beyond being a component manufacturer. Let’s add to this that the IoT space is still quite young (despite analyst reports putting the devices in the billions -- in reality we have a way to go). This move by Intel means it is clearly getting in the IoT space.
What is not clear at this time is if Mobileye is going to operate as stand-alone autonomous car sensing company or become integrated into the larger Intel space. I had this same question when Intel picked up Nervana in the AI space about 6 months ago. Is Intel going to go into the AI space or is it just stacking the deck to have all options? With a price tag of $15B (not a normal spend by Intel) one might say this is significant. It's worth noting that the $5B+ portfolio of startups in Intel Capital also is a great place to look at where technologies can integrate. IoT spending is at a rise; perhaps at a hype level at this time. The key pivot point will happen WHEN these IoT devices start integrating and delivering real time essential results to customers, and not just connecting…
Do you expect this to trigger a flurry of M&A activity around autonomous driving technology? Yes: driverless cars are coming. Let’s think of this as an advance deposit by Intel -- to get the right to play in this space -- as it has not established this independently prior to this acquisition. So we are going to see more hyped-up investments because investors globally feel this is a hot area (remember the Internet in 2000?!). We will see investors pouring money into (and not asking the right questions about) IoT, AI, driverless vehicles (cars, drones) and all else IoT…. Important to be mindful and not rush into a space that is in the definition stage at this time.
Does this accelerate the timeline of when driverless and connected cars become ubiquitous? While no doubt Intel’s investment will spur on some other chain reaction of investment enthusiasm, the fact remains that driverless cars will take time to be introduced at a meaningful scale (i.e., make money). The reason is that unlike the Internet and many other applications on the internet or IoT, driverless cars include considerations such as DoT, legal, insurance, car to car communication, sensor technologies beyond the car, road regulations, traffic lights, car manufacturers coming on board, and tons more. So it's a good idea to think through the broader picture and invest and enable all elements to work -- and not just the car. An autonomous car can only scale and take off when all the other elements are addressed. So it’s a bit puzzling as to why we are ONLY thinking of autonomous cars!
Tim Ritchie, VP of Sales, Buddy Platform, Inc.
What does Intel’s $15.3B acquisition of Mobileye mean for the IoT industry at large? Intel’s acquisition of Mobileye reflects the importance and increasing reality of ubiquitous connected technology. IoT technologies are disrupting established industries from cars to clothing. Intel brings increased investment opportunity, scale and manufacturing capacity to Mobileye, allowing costs to decrease and the technology to be adopted more broadly. We will continue to see this as a model across the IoT industry as established players look to IoT innovators to energize existing product lines.
Do you expect this to trigger a flurry of M&A activity around autonomous driving technology? Intel’s acquisition of Mobileye is an indication, not a trigger, of the increasing pace of consolidation around autonomous driving technologies. I expect we will continue to see the pace increase as technologies mature and niche players strive for a larger footprint and greater market share. As with all technology maturity cycles, single solution providers will acquire solutions adjacent to them until eventually becoming complete solution providers. Ironically, once the market reaches that level of maturity, a new generation of innovators will likely disrupt established players – like what we’re seeing with less expensive, more capable IoT technologies disrupting legacy markets like utilities and healthcare.
Does this accelerate the timeline of when driverless and connected cars become ubiquitous? Regulation, not technology, will be the gating factor for autonomous vehicles. Even with regulators working as quickly as they can, technical capability continues to outstrip regulation. Existing sensor and processing capability could be implemented today into an autonomous vehicle fleet and dramatically improve traffic flow and reduce injuries. However, this won’t become reality until regulators sign off.
How does a deal of this magnitude impact smart city planning and development? Municipal planning for autonomous vehicles is well underway. Planners are designing municipal spaces that contain less parking; smart traffic light systems that adjust patterns based on real time traffic information; narrower lanes; and reduced congestion.
Aaron Allsbrook, CTO, ClearBlade
The self-driving car is the trend Intel advanced last week to be the next connected device that will permeate our everyday lives. Mobileye vehicle sensors and vision algorithms dramatically strengthens Intel's ability to position themselves as a technology and solution provider for this next major mobile platform. The connected self-driving car looms large as part of the digitalization of our society, as it represents more than families commuting to school, soccer practice or work, but rather a whole new economic segment for the delivery and logistics of goods. Benefits of this technology will include optimization of road infrastructure, improved public safety, along with the additional convenience and increased quality of life.
If Intel can integrate their legacy chip business into a seamless autonomous vehicle package, it represents a huge opportunity for them to once again be the technology inside our daily compute and commute.