Intel (INTC) Consortium To Build Autonomous Car Ecosystem

Intel Corporation (NASDAQ:INTC) recently formed the Automotive Edge Computing Consortium along with DENSO Corp, Ericsson (NASDAQ:ERIC) , Nippon Telegraph and Telephone (NTT), NTT DOCOMO, Toyota InfoTechnology and Toyota Motor Corp. (NYSE:TM) .

As reported by the Silicon Valley Business Journal, which quoted a press release from Toyota, the objective of the consortium “is to develop an ecosystem for connected cars to support emerging services such as intelligent driving, the creation of maps with real-time data and driving assistance based on cloud computing.”

The consortium estimates that the world’s connected cars will send 10 exabytes (EB) of data to the cloud every month by the year 2025 — about 10,000 times more data than the present volumes. To make effective use of this massive data new networking and storage architectures are needed, which the consortium plans to develop going ahead.

What’s Role of Intel in the Consortium?

Intel’s prowess in building fast processors that are absolutely necessary in running parallel processing and support Big Data analysis and its tools like machine learning and deep learning makes it an automatic choice for anybody who wants to harness the massive data volume set to be generated by autonomous vehicles.

Moreover, Intel’s expanding presence in the autonomous vehicle marketplace – post Mobileye (NYSE:MBLY) acquisition – makes it a dominant player in the autonomous vehicle market.

We note that Intel can now offer almost anything related to autonomous vehicles – cameras, in-car networking, sensor-chips, roadway mapping, cloud software, machine learning and data management. That makes the company a dominant name in the autonomous car market and a formidable competitor to NVIDIA (NASDAQ:NVDA) and Qualcomm (NASDAQ:QCOM).

HERE Stake Boosts Mapping Skills

Early this year, Intel also acquired a 15% stake in German digital mapping company, HERE, which provides high-precision digital mapping and location based services for autonomous cars.

HD mapping is critical for the smooth functioning of an autonomous car. As such, these kinds of cars require HD maps that can precisely locate objects, curves and traffic within centimetres. Per Wired, “They also need to be live, updated second by second with information about accidents, traffic backups, and lane closures.”

HERE also has a strategic collaboration with Mobileye to integrate their respective autonomous driving technologies (including HD Live Map and Open Location Platform) into an improved industry-leading offering for automakers.

5G to Boost Data Transfer Speed

Intel is also planning to launch 5G in autonomous cars, which will help in transferring data much faster over wireless networks, as early as 2020 per VentureBeats.

Intel along with Ericsson has launched an open industry platform – 5G Innovators Initiative (5GI2) – to create transformative experiences for clients. Honeywell International (NYSE:HON), General Electric (NYSE:GE) and the University of California are the first participants of the initiative.

Intel believes that the 5G technology will accelerate communication between autonomous vehicles and connected infrastructure. Per VentureBeats, “…this will help autonomous vehicles process sensor, safety, and other information for the car and return the results quickly to the cars.”

Massive Test Data: Key Asset for Intel

Intel is expected to continue supporting the partnerships that Mobileye had with 25 leading automakers as well as automotive parts suppliers like BMW and Delphi. The company’s access to the massive test-data (generated from these partnerships) will now enable it to develop better chips, sensors as well as maps in the long haul.

Intel now plans to build 100 cars to test its self-driving technology. The cars will be “level 4” vehicles, which means they will be able to handle most driving situations themselves. They will be tested in the U.S., Israel, and Europe. The tests will result in massive dataset, which will again provide important inputs to the company’s research & development (R&D) team, thereby helping them to better Intel’s autonomous vehicle technology.

Autonomous Cars: Solid Growth Opportunity

Per a Business Insider report, an estimated 10 million self-driving cars will hit the pitch by 2020. According to BCG, by 2035, more than 12 million fully autonomous and 18 million partially autonomous cars are expected to be sold per year globally.

We believe that Intel is now well-poised to gain from the anticipated strong demand for autonomous vehicles. The company’s focus on the self-driving car market will help it to sell more data processing chips, sensor-chips, cloud software and many more, which will ultimately boost top-line growth.

Moreover, the focus on autonomous car market will diversify Intel’s revenue model, thereby lowering dependence on dwindling PC market as well as highly competitive data center markets in the long haul.

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