Intel Corp. is a new player at the auto industry's poker table, but the company's $14.7 billion acquisition of Mobileye gives it a hand with a pair of aces.
The first ace is Mobileye's obstacle-detection software, used by nearly every automaker except Toyota and Daimler. The Israeli company claims a 70 percent share of that market, and now Intel has access to those customers.
The second ace is the crowd-sourced road map that Mobileye is developing for self-driving vehicles. Mobileye is creating the maps from images uploaded from vehicles equipped with its cameras and software.
Early this year, Intel bought a 15 percent stake in Here, a mapmaker owned by German automakers that has partnered with Mobileye.
"It looks like Intel has all its ducks in a row," said Tim Dawkins, an Ann Arbor, Mich., automotive analyst for consulting firm SBD. "Intel is now positioned to go toe to toe with the likes of Nvidia and Qualcomm."
Intel is still in catch-up mode. BMW has announced plans to launch a demonstration fleet of 40 self-driving sedans equipped with Intel processors by year end. But analyst Ian Riches of Strategy Analytics notes that Nvidia has beaten Intel to the punch with processors for production vehicles.
Last week, German supplier Robert Bosch GmbH announced plans to launch production of an onboard computer with an embedded Nvidia chip "at the beginning of the next decade at the latest."
"Intel will likely be behind Nvidia in terms of deployment onto actual production vehicles," said Riches, "unless it is keeping a lot of deals very quiet for its own hardware."
Likewise, it would be a mistake to assume that the Mobileye deal gives Intel a stranglehold on the market for obstacle-detection software.
Mobileye develops algorithms for mono cameras, which are cheap enough for the mass market. But other suppliers are developing more sophisticated stereo cameras -- along with the relevant software -- for luxury vehicles.
"The likes of Bosch, Continental and Autoliv are all in the race," Riches noted in an e-mail. "We're also seeing the automakers invest" in vision software.
Meanwhile, Intel will have its hands full with a growing list of rivals that want to provide cloud connectivity for vehicles.
Chief among those rivals is Qualcomm. In the wake of its $47 billion acquisition of NXP Semiconductors -- the auto industry's top chipmaker -- Qualcomm is a top producer of processors for connectivity.
Qualcomm also hopes to generate automotive demand for its Snapdragon processor, a high-end computer chip used in Android smartphones.
With potent competitors such as Nvidia, Qualcomm and others, Intel realized that it didn't have enough time to develop its own technology. So it went on a shopping spree.
Over the past two years or so, Intel has acquired a batch of companies with key technologies, according to a March 13 analysis by consulting firm IHS Markit. Those acquisitions include:
n Yogitech of Italy, which makes hardware and software that lessens the chance of failure of the self-driving vehicle's processor.
n Itseez, which develops computer vision software.
n Nervana and Movidius, which have expertise in machine learning.
n Arynga, which provides software for over-the-air software updates.
With these and other acquisitions, "Intel now has control over key automated driving building blocks including object recognition, sensor fusion, path planning, localization and -- last but not least -- connectivity and telematics," wrote IHS analyst Akhilesh Kona.
Yet Intel is still shopping. In November, the company announced plans to invest more than $250 million over the next two years to develop technology for autonomous vehicles. In the wake of the Mobileye deal, those plans remain in place, said Kathy Winter, general manager of Intel's automated driving division.
"We still have an ongoing project to look for companies that can fill a gap in our product line," Winter told Automotive News. "Our understanding of what is needed grows every day. That process will continue, for sure."