Intel and Mobileye: the autonomous vehicle accelerates
Intel’s acquisition of Israeli computerized vision company Mobileye announced today can only be interpreted one way: an entire industry, which now encompasses not only vehicle manufacturers, but also component suppliers and many technology companies, is picking up speed as it focuses on further development of the autonomous vehicle.
The 15,300 million dollar acquisition values the Israeli company, listed on the NYSE since August 2014, at $63.54 a share, a premium of 34% over its close on Friday and about two and a half dollars above its all-time high. The company’s products are now part of the mass production of 313 vehicles produced by two dozen brands (including BMW, Audi, GM, Ford and Volvo) in the form of Advanced Driving Assistance Systems (ADAS), a rapidly growing segment that includes functions such as adaptive speed control, headlight control to prevent glare and curve adaptation, parking assistance, blind spot monitoring, collision avoidance systems, intersection assistance systems, lane maintenance and lane change assistance, etc., all of which are usually considered integral parts of autonomous driving systems, even if they have been progressively incorporated in many vehicles as driving aids.
The company competes with Google’s Waymo spin-off, with LiDAR or radar-based systems such as Safe Drive Systems, as well as a wide range of suppliers of automotive components (Bosch, Denso, Continental AG, etc.), technology companies (Nvidia, Cognitive Technologies, OmniVision Technologies, Freescale, Texas Instruments, Toshiba, etc.) and automotive companies that have preferred via acquisitions or their own developments to use their own technology.
Tesla, which despite not being a very important player in the industry, although it enjoys some technological leadership, worked with Mobileye systems until July 2016, until the first fatal accident of a Tesla Model S vehicle, when the Israeli company said that the specifications of its automatic braking systems were unable to recognize the lateral turns of other vehicles, and that they would not be able to do so until 2018. In response to what were seen as accusations that Tesla was using an inadequate sensor, Elon Musk argued that its systems used a fusion of dozens of components developed internally and externally to determine appropriate responses to different scenarios, and announced it was breaking with the Israeli company and would develop such sensors internally with components from Comma.ai, the company created by the master hacker George Hotz. Although it was never clear who broke up first, the shares of the Israeli company then fell by 7%, despite Tesla’s lack of quantitative theoretical importance as a customer.
For Intel, acquiring Mobileye means entering a segment of very strong growth with even stronger potential: cars are increasingly four- wheeled computers with a wide range of functions based on technology. Today, our vehicles are kept in lane, tell us when we can change, brake or accelerate to maintain distance with the vehicle in front, etc., and many of these functions are carried out with Mobileye chips, which are found in a large number of cars.
As these features progress from being driving aids to complete systems of autonomous driving, first on highways, then in traffic jams, and steadily increasing the number of situations in which they can be used, we will eventually reach virtually total levels of autonomy. And that will mean a lot of chips. And if there are chips, Intel will want to be there.
As ever, success in business is about reading the signs of the times.
(En español, aquí)
