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Intel Confirms $15 Billion Mobileye Deal (axios.com)
Intel is paying $15.3 billion to acquire Israeli computer vision company Mobileye in an effort to boost the chipmaker's position in the autonomous car market. From a report on Axios: Intel is tapping its foreign cash, paying $63.54 per share in cash for the company and said it should be immediately a boost to its per-share earnings; it is expected to close late this year. Intel CEO Brian Krzanich's letter to employees, as well as a missive from Mobileye insist "that instead of Mobileye being integrated into Intel, Intel's Automated Driving Group will be integrated into Mobileye."
Recently I drove a rental car that was equipped with a mobileye vision unit below the rearview mirror and I was quite impressed with it. It was pretty accurate at seeing speed limit signs, even in construction zones. It also was very good at measuring following distances and alerted us when we were coming up on a car (or other obstacle) too fast. Saved us a couple of times in stop and go traffic. Shoulder checked to see if it was safe to change lanes and suddenly got a beep when someone hit the brakes in front of us. Also was fairly good at lane departure warnings.
So I can see how their technology as a driver assistance device is quite useful. Technology is coming along quite nicely. The only problem is that car makers are already putting all of this in their new cars, so the market for these units is small. At the same time, I don't see a lot of money to be made in autonomous cars just yet. Quite a gamble for Intel.
It's very interesting when you consider that Mobileye just sold for $15 billion and they make very little in physical terms, and sell even less. Yet Opel, which does actually make and sell real physical things, sold for $2 billion. Kind of throws cold water on Trump's idea that we can make America great/white again through returning to manufacturing. From an investor's point of view, the money is just not in manufacturing.