Intel, perhaps one of the world's largest in computer hardware manufacturing -- mainly processing chips for computers and smart phones, is launching a $100 million venture capital fund. What is the fund for? Innovation in the automobile industry. The big idea is to invest this money into automobile tech-based start-ups that could potentially partner with Intel in the future. They plan to open a development center in Germany in the not so distant future. This would serve as their headquarters for this recent spearheaded by the top brass at Intel.
Why Automobile Technology?
In a nutshell, the processor chip manufacturing giant needs more outlets for revenue outside of the computer and smart phone industry. The automobile industry is rapidly becoming a fast growing area for technological innovation. Specifically, cars are being targeted for the integration of tech-based safety, navigation, engine control and digital entertainment solutions. Intel wants to position itself front and center as the founder of such technological innovations.
Predicted Areas of Innovation
Recently, smart phones have been used as integrated devices with new vehicles all over the globe. This has caused tech and automobile experts to predict major computing integration with vehicles in the near future. This would include technology like, built-in computer processing, and a wireless connectivity integrated into future automobile production. Many experts posit that cars would function as a smart phone in that they will be able to communicate with other cars around the world. In fact, it is likely that cars will have on-board Wi-Fi capability in the near future.
Areas of the World Intel is Targeting
With Intel's automobile innovation headquarters set in Germany, it's abundantly clear that this is a global effort. They will be targeting countries all over the world. The goal is to target the countries where automobile innovation is already taking place. Right now their primary target investment markets are India, China, Brazil and the Middle East. This will all be done through Intel's investment arm, which is called "Intel Capital." The investment branch of Intel has some other projects on the table as well, which includes the development of an Intel-based notebook called, the UltraBook and a fund for developing apps that only work with Intel hardware. This branch of Intel will be located in Karlsruhe, Germany and will employ upwards of 60 people.
Some Key Challenges for Intel
The big challenge for Intel in this automobile technology initiative is expertise. Intel is widely known as expert manufacturers of high-powered microcomputer processors that run powerful applications on a wide range of home, business and industrial computer systems. This is not likely to translate well with automobile technology development. Most cars use simple micro-controllers with basic, built-in memory systems. These micro-controllers are built by auto technology companies, like Renesas Electronics, Freescale Semiconductor and Texas Instruments.
While Intel does not have the automobile technology expertise, they do have money, which is why they are aggressively investing into start-ups who can help them develop the computing technology necessary for the automobile industry. Some critics think this is a risky move, comparing their place in the automobile industry with their position in the smart phone industry. Many smart phones use Intel technology, but the overall sales volume is extremely low. Time will tell if Intel's strategy will prove effective as the build relationships with car technology start-ups on a global level.
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