Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Intel's Road Trip to New Revenue

Intel (Nasdaq: 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 (NYSE: 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 (NYSE: 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 (Nasdaq: 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.  

Crash course
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.

Foolish contributor, Tamara Rutter owns shares of Tesla Motors. Follow her on Twitter, where she uses the handle @TamaraRutter, for more Foolish news and investing tips. The Motley Fool owns shares of Intel and Ford Motor. Motley Fool newsletter services have recommended buying shares of Ford Motor, Tesla Motors, and Intel.Motley Fool newsletter services have recommended creating a synthetic long position in Ford Motor. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Read/Post Comments (3) | Recommend This Article (6)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On March 05, 2012, at 6:56 PM, russfischer1013 wrote:

    The Intel might not be a big deal, but it's $100 million more than The Motely Fool is spending on anything that might affect our world in a positive way.

  • Report this Comment On March 05, 2012, at 8:08 PM, CMFSoloFool wrote:

    I believe infotainment, along with automotive WiFi are all possible growth areas for Intel. Intel fabrication can match or better just about any chip fabrication capability on earth, so if success in the sector is contingent on cost, and/or function per dollar, then Intel will likely succeed.

  • Report this Comment On March 05, 2012, at 8:50 PM, 123spot wrote:

    Feeling a mite churlish, Russ? Your previous postings belie this sentiment re the helpfullness of fools. Spot

Add your comment.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1800692, ~/Articles/ArticleHandler.aspx, 10/24/2016 4:48:24 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 2 days ago Sponsored by:
DOW 18,145.71 -16.64 -0.09%
S&P 500 2,141.16 -0.18 -0.01%
NASD 5,257.40 15.57 0.30%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/21/2016 3:59 PM
INTC $35.15 Down -0.28 -0.79%
Intel CAPS Rating: ****
F $12.02 Up +0.05 +0.42%
Ford CAPS Rating: ****
TM $115.27 Down -0.87 -0.75%
Toyota Motor CAPS Rating: ***
TSLA $200.09 Up +0.99 +0.50%
Tesla Motors CAPS Rating: **