Intel (NASDAQ:INTC) has been performing fairly well even amid the ongoing macroeconomic deceleration spurred by the coronavirus (COVID-19) pandemic. As an illustration, the chipmaker disclosed during its Q1 2020 earnings announcement that it was able to maintain “essential factory operations with greater than 90 percent on-time delivery”. Moreover, Intel provided solid guidance for Q2 2020, expecting $18.5 billion in revenue and a 28 percent operating margin (on GAAP basis). However, this does not mean that the company’s product lines are immune to secular trends.
As a case in point, the CEO of Intel’s Mobileye – the company that develops chips for vision-based autonomous vehicles – adopted a fairly somber tone today while declaring that consolidation is the only viable path forward for the autonomous driving industry as the challenge is insurmountable for any single company.
Amnon Shashua, the CEO of Intel’s Mobileye, said that the current strategy adopted by many companies of focusing on only one aspect of the autonomous driving conundrum – such as maps, sensors, safety, etc. – is, in effect, unsustainable. According to Shashua, the industry’s “end-to-end system” structure renders such a piecemeal approach ineffective.
While speaking at an online conference organized by the Israel government-backed EcoMotion, Shashua said:
“It’s a formidable task, and there are going to be very very few actors who can go from silicon (chips) to self-driving systems. Therefore, what we see in the industry and what will continue in the industry is a great consolidation.”
Bear in mind that Intel’s memory business (NSG) and Mobileye both set new revenue records in the first quarter of 2020, with Mobileye posting a year-over-year increase of 22 percent in its top-line metric.
Given its substantial financial heft, Intel is currently trying to further enhance the viability of its Mobileye company through acquisitions. As a case in point, Intel purchased the Israel-based mobility app Moovit for $900 million earlier this month. The app offers route planning services similar to those offered by Google (NASDAQ:GOOGL) and Apple (NASDAQ:AAPL) through their respective map apps. However, Moovit also offers the facility to share bikes and scooters through its app interface. Moreover, as Moovit crowdsources a part of its public transit data, it is able to provide routing services even in remote areas.
According to Intel, Moovit currently has around 800 million customers spread across 3,100 cities in 102 countries around the globe. While explaining the rationale behind this move, Intel said that its acquisition of Moovit is a part of its strategy to “become a complete mobility provider, including robotaxi services, which is forecast to be an estimated $160 billion opportunity by 2030.”
Year to date, Intel’s stock has generated a return of 0.12 percent, corresponding to a market capitalization of $257.18 billion. For comparison, the broader S&P 500 index has generated a loss of 8.7 percent in the same timeframe.
The post Intel’s (NASDAQ: INTC) Mobileye CEO Views Consolidation as the Only Viable Path Forward for the Autonomous Driving Industry by Rohail Saleem appeared first on Wccftech.
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