Intel's Road Trip to New Revenue
Mar 5th 2012 3:05PM
Updated Mar 5th 2012 4:14PM
Intel (NAS: INTC) wants to drive your car. Intel Capital, which is the investment arm of the tech company, announced last week that it would dedicate $100 million toward accelerating the development of technology in the auto industry. The funding is part of Intel's aggressive play for a piece of the mobile car market. But is it too little too late?
Road to the future
The stakes are high for the world's largest PC chip maker. By 2014, Intel estimates that cars will be among the fastest-growing market segments for mobile devices and Internet content. Intel can't afford to be left behind again. In the past, Intel failed to secure a position in the smartphone and tablet industry. And while its chips have dominated the PC industry, demand for traditional computers should eventually decline, forcing Intel to search for other channels of revenue.
Intel is hoping to find growth in the auto industry by getting carmakers to use its technology. Partnerships with several Chinese manufacturers, as well as Toyota Motor (NYS: TM) , should help Intel speed up development of these technologies. However, the chip maker will need more than new friends and a fund if it wants to be a leader in this space.
Breaking for traffic
Intel isn't alone in its quest to integrate mobile technology into cars. Last year, Ford Motor (NYS: F) confirmed details about its Ford EVOS, a car with its own cloud and Internet connectivity that is expected to launch in Europe later this year. Ford is one of many carmakers that envision a future where cars use wireless technology to share information and remember drivers' preferred handling and temperature settings.
The upcoming all-electric Model S sedan from Tesla Motors (NAS: TSLA) already has infotainment capabilities built in. The car's 17-inch touchscreen provides Wi-Fi or mobile connectivity, and the car uses Bluetooth to communicate with your iPhone or iPad.
Intel says its Connected Car Fund will invest in next-generation in-car infotainment, advanced driver assistance technology with speech and gesture recognition, and eye tracking capabilities. Sounds cool, but Intel has made promising investments in the past only to see them disappoint. The company invested heavily in WiMAX, betting that it would become the standard for mobile phones operating on 4G. Unfortunately, the telecom industry widely adopted LTE as the new 4G standard -- leaving Intel's investment in this case out in the cold.
If you consider that the average American driver spends the equivalent of two months a year in the car, it makes sense that our cars' technology be up to speed. However, I'm not sure a $100 million investment is enough to secure Intel's future in the market. Let me know in the comments below if you think Intel's investment in autos will pay off.
At the time this article was published
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