Intel's $15 Billion Purchase of Mobileye Shakes Up Driverless Car Sector

Inventions of new technologies have seen the rise in the production of self-driving cars. Leading tech companies have been in a constant battle with their inventions to grab the top spot in autonomous driving technology. Amidst all of this, Intel has made a clever and significant move that can mark the company’s venture into the automotive market a huge success.

Intel Corp has been in agreements to buy over the Israeli driverless technology firm Mobileye for a sum of 15.3 billion US dollars. For a while Intel has been trying to expand its market from the computer business. The acquisition of Mobileye can very well push this US chip making company into the frontlines of driverless automotive market with equal footing against rival firms, Nvidia and Qualcomm.

Although the current market for autonomous driving and advanced driver assistance systems can see a potential rise in the next 10 to 20 years, some people are still skeptical about Intel buying Mobileye. Most companies are promising to deliver fully automated cars in the next 4 years but the depth of the promise is questionable. Intel has not been very well known in the automotive industry but however they have funded numerous startups that are developing different components of self-driving automotive.

What does Mobileye offer?

Mobile specializes in developing sensor chips, networking systems for cars, navigation systems, cloud software, machine learning and other data management systems that aid in developing a fully automatic vehicle. The technology offered by Mobileye is critical to the development of driverless systems and with the tie up with a huge company like Intel; it can increase their business opportunities by entering into the global market.

The deal in question 

Experts and analysts from industry are speculating the deal might be an exaggeration as the price involved is too much. The money paid by Intel to acquire Mobileye is apparently 21 times more than the average expected revenue of the firm in the year 2017. Since more and more companies are popping up in the self-driving technology scene, the market is becoming congested and it may be hard for Intel to get back its investment with the final released product.

The fight for supremacy

Intel and Mobileye are already holding talks with popular German automobile manufacturer BMW to produce some 40 odd self-driving test cars and release them. Mobileye has also made progress to manufacture its fifth generation of chips after teaming up with Intel which is to be released in market by 2021. These chips are to be used in full self-driving vehicles.

Meanwhile, Qualcomm has made its move to acquire the largest chip supplier, NXP with a deal of 47 million US Dollars putting immense pressure on Nvidia, Intel and Mobileye as well.

It is only a matter of time before we can see autonomous self-driving vehicle systems on the road at full swing and whether Intel has made a wise decision in buying Mobileye.