Intel Seeks Approval to Invest in German Auto Makers' Digital-Mapping Venture -- Update
January 03 2017 - 11:10AM
Dow Jones News
By William Boston
BERLIN-- Intel Corp. is positioning itself to join BMW AG,
Daimler AG and Volkswagen AG's Audi unit in developing navigation
technology for self-driving cars.
The U.S. tech bellwether filed a request for regulatory approval
in Germany to make a strategic acquisition of a minority stake in
the digital-mapping service Here International B.V., the
Berlin-based company that Germany's big-three car makers bought
from Nokia in 2015 for about EUR2.5 billion ($2.6 billion).
Germany's antitrust authority disclosed Intel's request on
Tuesday but gave no further details. The agency said it had one
month to decide on whether to approve the acquisition, which is
unlikely to pose competition concerns.
Here declined to comment. Intel couldn't be immediately reached
for comment.
The German auto makers, which together dominate the global
market for high-end luxury cars, set aside decades of bitter
rivalry to jointly acquire Here in a bid to control the mapping
technology they consider crucial for self-driving vehicles.
Intel appears to be positioning itself to enter the fast-growing
technology field, marking the latest illustration of how the lines
between the tech industry and conventional auto makers are
blurring.
As the automobile morphs into a platform for digital services
with the potential to generate huge profits, auto makers and tech
companies are finding common cause or are engaged in fierce
rivalries for control of the new mobility economy.
Auto makers are entering new businesses such as car-sharing and
ride-hailing to capture new revenue streams generated by their
vehicles. The car makers want to avoid being left behind because
such services could potentially become more lucrative than their
traditional businesses.
Tech companies such as Uber Technologies Inc., essentially an
app provider, Apple Inc. and Alphabet Inc.'s Google, are
challenging the dominance of auto makers including BMW, VW, Ford
Motor Co. and General Motors Co. in providing personal
transportation. They are eager to extend their dominance of tech
systems, apps and services to the automobile--just as in the past
they moved from the personal computer to the smartphone.
New auto technology is driven by information technology, which
is why the auto industry has already outpaced computer makers as
the single biggest customer for the chip manufacturers such as
Intel and Germany's Infineon Technologie AG.
Illustrating the trend, U.S. chip making giant Qualcomm Inc. in
October said it would buy Dutch NXP Semiconductors NV, the world's
largest developer of chips for automobiles, for $39 billion.
Chip makers provide the intelligent sensors and computing power
needed to control functions such as projecting information onto the
car's display, fuel injection and safety systems.
They also provide the eyes of the vehicle that enable cars to
ascertain temperature, weather and road conditions, identify other
vehicles and objects on the road and allow the vehicle to know its
own location.
Here is developing a real-time navigation system that creates a
3-D map of the world's roads and allows vehicles to exchange
information needed for navigation. The information will be stored
on a cloud-based computer network that individual vehicles can
access.
Intel's interest in taking a stake in Here indicates that chip
makers view the nascent digital-navigation industry as a potential
source of new revenue and innovation.
When the German auto makers bought Here they said they were
eager to add strategic investors. Last week, Here said Chinese
internet group Tencent Holdings Ltd., Chinese mapping company
NavInfo Co. and Singapore's sovereign-wealth fund GIC planned to
jointly buy a 10% stake in the company for an undisclosed
price.
In December, Here unveiled a partnership with Mobileye NV, the
Israeli tech company that makes sensors for advanced
driver-assistance programs.
The head of Here's automotive business in Asia said in October
that the company was looking for a partner in Japan. No deal has
been announced yet, but an update could come soon, a person
familiar with the situation said.
A group of nine Asian auto makers that include Toyota Motor
Corp, Nissan Motor Co. and Honda Motor Co. formed the joint venture
Dynamic Map Planning Co. in 2016 in a bid to set up a rival to
Here.
Write to William Boston at william.boston@wsj.com
(END) Dow Jones Newswires
January 03, 2017 10:55 ET (15:55 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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