Sticking with its recent Internet of Things focus, Intel (NASDAQ:INTC) continued to solidify its place in the wearables space by purchasing the sports wearable tech company Recon this week.
The small tech company makes heads-up display technology for athletes, including the Recon Jet for runners and bicyclists and the Recon Snow2 for skiers. Both devices are equipped with an array of sensors to provide real-time activity tracking on goggles or glasses, with minimal distraction to athletes. The Jet also comes with a built-in camera for recording videos and pictures.
Intel didn't share the details of the acquisition, and a spokesman told VentureBeat that the cost was "small and not financially material to Intel." Intel said Recon's employees will continue working on their own products at their headquarters in Vancouver, Canada, but will also work with Intel engineers in developing new wearable products and platforms for Intel.
While a small acquisition, the move comes on the heels of a much bigger push by Intel into the Internet of Things (or IoT) market through wearables.
Small acquisition part of a bigger plan
In a blog post explaining the acquisition, Intel's senior vice president of its New Technology Group, Josh Walden, explained the company's emphasis on wearables, noting that in the past six months alone, the company has:
- Announced the Intel Curie module for its wearable system-on-a-chip (SoC).
- Made a deal with Luxottica Group to create smart, premium sports eyewear.
- Partnered with TAG Heuer and Google to create a Swiss smartwatch powered by Intel chips and Android Wear.
Last year, Intel purchased small wearable tech company Basis Science to help test its technology on wearable devices and dive further into the market. The company also makes chips for smart wireless headphones made by SMS Audio, and back in September, Intel announced its working Opening Ceremony to create a high-end tech bracelet.
Recon builds on the company's emphasis on wearables -- and the broader Internet of Things market -- by adding new ways for the company to pair hardware and software together that it hasn't done previously. Intel says Recon's engineers will help the company create new products outside of the athletic market, which could open up the company to putting its chips in a wide variety of wearable products.
Why Intel needs this
Intel infamously missed the mobile market, and the company is determined not to do the same with the Internet of Things. Wearables alone are expected to grow from their current U.S. market size of $23 billion to $173 billion by 2020. And IDC expects the broader Internet of Things market to be worth $7.1 trillion globally by then.
Intel brought in $2.1 billion in revenue from its IoT division in 2014. While that's a small amount compared to its full-year revenue of $55.9 billion, it's more than its mobile division brought in, and nearly identical to the company's Software and Services segment revenue.
Adding the Recon purchase to Intel's other wearable partnerships should help the company continue to expand its IoT pursuits and grow that segment's revenue. The Internet of Things is just getting started, and already, Intel is moving quickly into the space. That should make the company and its investors very hopeful for the future.
Chris Neiger has no position in any stocks mentioned. The Motley Fool recommends Apple, Google (A shares), Google (C shares), and Intel. The Motley Fool owns shares of Apple, Google (A shares), and Google (C shares). 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.