Chip makers Intel (INTC -1.13%) and Qualcomm (QCOM 2.19%) have been stepping on each other's toes for awhile now. Intel, the world's largest PC and data center chip maker, is making mobile chips to challenge Qualcomm's dominance of smartphones and tablets. Qualcomm is targeting Intel's near-monopoly in data centers with server chips of its own. The two companies are also developing competing communication standards for Internet of Things (IoT) devices.

This ongoing battle recently entered a new market: depth-sensing cameras that help drones identify objects and avoid collisions. Today, drones are typically made with various components from multiple vendors. If Intel and Qualcomm can merge their chip-making technologies with depth-sensing cameras, they could consolidate those suppliers with single-reference designs.

Why is Intel interested in drones?
Intel's biggest near-term challenge is the slowdown of the PC market, which forced it to reduce its full-year sales guidance by nearly $1 billion earlier this year. Intel's advance into the mobile market has also been costly since it paid OEMs billions of dollars to use its smartphone and tablet chips.

To diversify its business, Intel developed other products, like tiny IoT modules and RealSense depth-sensing cameras, which can help drones stay connected while avoiding collisions. To deepen its connections with the drone industry, Intel invested in three drone makers -- Airware, Precisionhawk, and Yuneec -- over the past year. The company is also developing collision avoidance technology for autonomous drones with German drone maker Ascending Technologies. At CES 2015, Intel showcased the technology by letting Ascending's RealSense-equipped drones buzz around the stage without crashing into each other.

Ascending Technologies' FireFly drone. Source: Company website.

Beyond the drone market, Intel's RealSense technology can potentially power autonomous cars, which many companies expect to achieve mass adoption within the next decade. It can enhance augmented-reality devices and software, which insert virtual objects into real-world environments. Adding RealSense cameras to laptops could even boost PC sales since Windows 10 has a facial recognition feature that requires a depth-sensing camera. Lastly, RealSense could make Intel's reference designs for smartphones more appealing to OEMs, which might ensure loyalty without subsidies.

Why is Qualcomm interested in drones?
Qualcomm's main mobile chip-making business is being squeezed on two fronts. First, competitors like MediaTek and Rockchip are commoditizing the market with cheaper chips. Meanwhile, Samsung -- one of its two largest customers -- replaced Qualcomm's chips with in-house components in its Galaxy S6 devices. Those issues caused Qualcomm to reduce the high end of its fiscal 2015 sales forecast by $1.5 billion last quarter.

To help its mobile chipsets stand out in this crowded market, Qualcomm introduced reference designs for depth-sensing phones powered by Snapdragon chips. Qualcomm uses dedicated chips for image processing while Intel pairs its RealSense cameras with general-use CPUs. According to Qualcomm, this enables its depth-sensing cameras to process images more efficiently than Intel's.

For drones, Qualcomm plans to offer a similar reference design on a single board, which eliminates the need to purchase separate components from multiple manufacturers. Qualcomm demonstrated the technology at CES 2015 with a flying and rolling drone called the Snapdragon Cargo. Qualcomm Senior VP Raj Talluri recently told Re/code that the company's new Snapdragon 820 chip could include more advanced features for collision avoidance and geofencing.

Snapdragon Cargo. Source: Company website.

Qualcomm also plans to expand into autonomous cars. Last year, it introduced the Snapdragon 602A for infotainment systems. If Qualcomm merges those chips with depth-sensing cameras, it could gain a firm foothold in autonomous vehicles.

The key takeaway
Intel and Qualcomm's computer-vision battle isn't just about drones. It's about dominating the booming IoT market with smarter and more connected devices. IDC estimates that the global IoT market could grow from $655.8 billion in 2014 to $1.7 trillion in 2020, which makes it a lucrative source of growth for Intel and Qualcomm.

Intel is leveraging its strength in PC and data-center chips to expand into the IoT market. Qualcomm hopes to achieve similar growth from its smartphone and tablet foundations. These investments likely won't generate much meaningful revenue in the near future, but they could pay off once drones fill the skies and driverless cars fill the streets.