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Investments in Product Development and Research for the Automotive Industry

Intel recently announced the investment of $100 million to accelerate the development and adoption of new technology within the automotive industry. As the first organization headquartered in Silicon Valley to focus on the automotive industry, Intel sees a future that allows for the connection between vehicles and connected devices.

Intel Capital Connected Car Fund

The Intel Capital Connected Car Fund will invest over the next four to five years in hardware, software and service companies across the globe to adopt and develop in-vehicle applications, mobile devices and sensors. Technology has clearly become an important aspect of modern life. Consumers demand an uninterrupted flow of information. Intel’s view is that automobiles should be able to provide that flow like any other device.

The Connected Car

The ideal connected car will have the intelligence and innovation to deliver the correct information at the correct time in the correct manner to ensure drivers and passengers are informed and productive while maintaining a high level of safety. Furthermore, once the automobile becomes connected it can communicate in real-time directly with the cloud and potentially even other vehicles.

The Future of Automobiles

The General Manager of Intel’s Automotive Solutions Division believes the car is the ultimate mobile device. The company is predicting that by 2014, automobiles will be one of the top three fastest-growing types of connected devices. With Intel’s history of personal computing hardware and software development, cloud computing and security, the company is expected to bring the automotive industry to a new level.

The Perfect Match: Intel and the Center for Development of Advanced Computing

The Intel Corporation recently announced it will be collaborating with the Center for Development of Advanced Computing (C-DAC), one of the world’s best R&D organizations. Located in Pune, India, the C-DAC falls under the Department of Information Technology (DIT) and Ministry of Communications and Information Technology (MCIT).

HPC Academia Innovation Center

The Indian Government announced this collaboration to create an HPC (High Performance Computer) Academia Innovation Center for National Engineering Education and Open Science Research. This will allow the country to take advantage of the emerging technologies released by Intel and subsidiaries.

Key Focus Points

The C-DAC has a positive history of successful partnerships in many research fields. The key learning from this relationship is in the field of scientific and engineering simulation for super computers. This will address many of society’s urgent problems.

Intel has agreed to support ONAMA (Open Science and Research Community) by providing the top academic institutions with HCP technology, open-source software and many other services. This will allow these institutions to train new engineers and researchers who require the best equipment and software available. The partnership will also focus on a multi-user interactive exchange of knowledge across many focal points of engineering.

Other Areas of Research

C-DAC will target analysis and other computing research with regards to new HPC solutions, fault tolerant software stack, system management tools and HPC application optimization. Each of these areas will be critical to the success of future extreme scale systems. Additionally, C-DAC will utilize Intel’s software development environment for MIC and Knight’s Ferry.

New Communications Technology from Intel

Intel recently revealed several features for their newest communications platform entitled, “Crystal Forest.” According to the company, the technology will manage the processing of information throughout their network in an efficient and secure manner. Simultaneously, the platform with address specialized requirements for cloud connectivity and processing.

Future Video Traffic

Currently, every minute of every day there are 30 hours of video being uploaded. It is estimated that by 2015 it will take five years to watch all video on the Internet. The numbers will continue to increase at an exponential rate which will place additional pressure on equipment and service providers to offer platforms that can manage this traffic.

At the moment, these providers combine specialized silicon co-processors with software programming models to direct many communications. This is an extremely expensive and complicated undertaking that has previously utilized a large amount of manpower and equipment.

Crystal Forest Platform Features

The Crystal Forest technology will allow providers to combine three communications workloads: application, control and packet processing into the multi-core Intel architecture. This will result in improved performance and decrease the time to market. Also, the platform will allow for the development of a scalable product line due to Intel’s planned future performance increases.

The technology will deliver a maximum of 160 million packets per second for Layer 3 packet forwarding. Therefore, users can send thousands of high-definition videos across all network nodes. In the past, only specialized processors had the ability to send more than 100 million packets per second.

Settlement in the ’09 New York Antitrust Case

Computer chip industry titan Intel Corporation recently settled in one of the final antitrust cases against the company. Analysts are claiming that Intel only received a financial slap on the wrist for its wrongdoing.

Threats and Kickbacks

Dating back to the middle of the 2000’s, the chipmaker was accused by global governments of using threats and kickbacks to maintain their dominant position in the industry. These tactics supposedly paid off and Intel was able to have additional time to upgrade their product line. At this point, the company lagged behind Advanced Micro Devices (AMD) to exploding with pioneering products to take the lead in the war.

Intel allegedly threatened to cut shipments to those computer makers who also used AMD chips. Those who complied were also given monetary bonuses and discounts. Intel was also reported to place pressure on retailers to fix specific prices of CPU’s in various regions.

Financial Discipline

As a result, in 2009 Intel paid $1.45 billion to the European Union and $1.25 billion to AMD. However, in 2010, the U.S. Fair Trade Commission enacted a small fine on the company and required them to sign an agreement to play by the rules in the future. More recently, the company paid $1.5 billion to NVIDIA for similar practices.

Acknowledgement of Guilt

Although Intel never admitted to partaking in any of these unethical practices, the payments indicate that they acknowledge the anticompetitive tactics. If Intel was truly innocent, they would have certainly fought the charges more aggressively. These actions may have tarnished the company’s reputation but it did not affect them financially.

Two New Senior Vice Presidents at Intel

Intel recently announced the promotion of two executives to Senior Vice President. Mooly Eden and Richard Taylor were authorized by the board of directors to fill these positions due to their excellent performance.

Mooly Eden

Eden was recently name as the general manager and president of Intel Israel and performed the responsibilities related to operations and strategy, counting the development centers and managing Intel’s Fab 28 production location.

Richard Taylor

Taylor will become the Senior Vice President and Director of Human Resources. His additional duties will include the management and implementation of all human resource programs and policies globally.

Intel’s Figures

Intel is a semiconductor organization with $54 billion in sales in 2011. The company recorded a net income of $12.94 billion. Intel has shown a 21.2% growth in the most recent quarter when compared to last year’s figures. Executives are optimistic with the growth and the pre-tax margin of 32.93% which is 6 points over the industry standard.

When the markets closed on February 3^rd, 2012, the stock price was at $26.74 with 42.19 million shares. The stock price range over the past year was $19.16-$27 with a total market capitalization of $136.16 billion.

About Intel Corporation

As a global leader in computing technology and innovation, Intel continues to set the industry standard for semiconductor technology. Intel designs, develops and builds some of the most essential technologies that are the basis of the world’s computing gadgets. With these executive changes, the board of directors hopes the two new Senior Vice Presidents will add to the growth and innovation found at the company.

Newest Intel Acquisition

The Intel Corporation recently reported the acquisition of Qlogic Corporation and subsequent brands for approximately $125 million. This move caused the stock prices of Mellanox Technologies, QLogic’s rival, to plummet by 3.4 percent on TASE and 6.8 percent on NASDAQ. This is quite a significant drop for the organization.

Message from the CEO

Despite the acquisition, the Mellanox CEO views the arrangement as proof that the company is the industry-leading solution for connectivity between organization’s resources. At the same time, he notes that the acquisition has created a major rival with significant financial resources. To this point, Mellanox has maintained 83 percent market share. The CEO is excited to begin working with Intel to drive the brand and grab extra market share.

Intel’s Connection

Intel was one of the founding members of the QLogic InfiniBand that was developed during the early 2000’s. Since conception, Intel has acquired quite a few other companies for different purposes including Fulcrum for Ethernet switching and NetEffect for RDMA over Ethernet. It is estimated that QLogic has assisted Intel in shipping up to 40 percent of their enterprise units. Therefore, it is clear that Intel is investing in the future of QLogic as the company can identify its importance.

Oracle’s Connection to Mellanox

The Oracle Corporation is the world’s second-largest software producer. The enterprise has a small stake in Mellanox which many analysts feel it will offset Intel’s entrance into the market. At the same time, the soft results produced by Oracle appear to be a troubling sign.

Record Revenue Reported by Intel

Intel recently reported a fiscal year revenue of $54 billion which proves the company has money to burn. 2011 was a record year for the Santa Clara-based chip maker. Their operating income was $17.5 billion with a net income of $12.9 billion and earnings per share (EPS) of $2.39. Overall, Intel generated $21 billion in cash from operations, had paid dividends of $4.1 billion and utilizes $14.1 billion to buy back 642 million shares of stock.

A Statement from the CEO

The CEO reported that 2011 was an outstanding year for the company due to the incredible execution by its employees. The company boasted a growing revenue of over $10 billion thus breaking earnings records.

The Future of Intel

Intel has a considerable product pipeline planned for 2012 so the opportunities could be even more tremendous. One such opportunity is the continued growth of Ultrabook systems, security, data centers and Intel-powered smartphones and tablets.

Management Changes

As the old sayings goes, “if it aint broke don’t fix it.” Surprisingly Intel also announced a number of executive promotions and lateral moves. Former vice chairman Andy Bryant has been promoted to full-time executive chairman. The biggest change is the promotion of Brian Krzanich to Chief Operating Office. Krzanich replaced Paul Otellini in a move that many thought would be given to Sean Maloney. However, due an unexpected stroke, Maloney could not take the position. Although he has fully recovered, his public profile has been almost non-existent. There were also a number of other surprising changes.

More Thunderbolt Technology in 2012?

Earlier in 2011, Intel and Apple teamed up to introduce Thunderbolt technology which is a lightning fast interface. Unfortunately, since the release there have only been a small number of products shipping with the technology. These products are limited to new Macs and several peripherals.

Industry Analysis

However, according to many industry experts the number of new PC products equipped with the technology in 2012 is expected to dramatically increase. More specifically, Asus and Sony are said to be releasing systems with Thunderbolt support. Also, computer component-maker Gigabyte is developing a Thunderbolt-based motherboard for release in April 2012.

Thunderbolt for Differentiation

Intel recently exposed to its partners that it plans to fully launch Thunderbolt in April 2012. This could cause a significant backlash with regards to the number of computer, component and peripheral-makers that will feature the technology. Due to the highly saturated industry, most manufacturers want to be on the ground-floor of new technology to differentiate from the competition.

Technology Adjustment

On the other hand, with the popularity of other interfaces, many consumers are unwilling to ditch all old peripherals that do not support the technology. Therefore, Thunderbolt must be compatible with the other interfaces to be successful.

As computer requirements continue to increase, manufacturers are searching for more ways to deliver quick, efficient resources. Thunderbolt is one of those technologies. Using an optical linking system, Thunderbolt will eliminate the copper transmission line and associated limitations. If this technology is successful, it could see mainstream usage from almost any product with a motherboard.

New Opportunity for SSD Hard drives

As a result of the October 2011 floods in Thailand, solid state drives (SSDs) have become more competitive. The floods caused a considerable rise in the cost of hard disks which is approaching the price point of SSDs. In an attempt to leverage the hard drive shortage, Intel is hoping the sales of SSDs will offset the unexpectedly low fourth quarter processor sales.

Effect of the Flooding

The Thai flooding has certainly contributed to a reduction in new computers being build and could potentially drop as much as $1 billion off its next financial results. However, where there is decline, there is opportunity.

Intel Products

Although best known for its repertoire of processors for embedded devices, low-power netbooks, notebooks, performance desktops and ultraportables, Intel also has a solid-state drive department. Overall their solid-state devices have received positive reviews. Unfortunately, due to previously high prices, HDDs continue to dominate the market.

Opportunity Knocks

However, with a shortage of HDDs, this could quickly turnaround. The CEO of Intel recently reported an increase in the demand for SSDs and fully expects the market to turn toward these devices.

SSD Features

SSD drives are extremely thin, light-weight and power efficient which are the perfect mix for notebook computers. Intel’s current target market is the ultraportable notebook segment which demands these features.

Luckily for Intel the competition is scarce. Toshiba, Acer and Lenovo currently have several SSD variants available. However, due to the high price of the technology, these companies have remained out of the mainstream marketplace.

Toyota and Intel Announce Partnership

Intel and Toyota have announced a partnership to develop cutting edge in-vehicle infotainment systems (IVI) for the automaker’s future cars.

Using the Atom processor, the goal is to create systems that reduce driver distraction using touch, voice commands, and gesture technologies. They also want to work on ways to integrate vehicles with home networks. Currently Toyota has the Entune system, which uses the data connection from smartphones to power a variety of integrated apps such as Pandora. Toyota says the new systems being developed by Intel will retain some of that functionality. Currently BMW and Mercedes-Benz use Atom based infotainment systems, so Toyota owners will be in good company.

“Intel has been conducting research related to the connected car for years, and with the support of Toyota will extend that research to advanced services that will benefit the driver and passengers in many ways. Through this joint effort, we hope to improve the driving experience by enabling a seamless connection between mobile devices and the vehicle so when brought together they naturally adapt and work in harmony,” said Staci Palmer, general manager of Intel’s automotive solutions division.

The connected car is rapidly growing in popularity behind smartphones and tablets. The question remains however, its being so plugged in while driving a good thing or even necessary at all? When a person is driving they should be concentrating on the road and nothing else. No matter how hands-free they make tasks such as texting or making phone calls, they will always be a distraction. Even GPS can be distracting. Is there really a need to check your email or send a tweet while you’re behind the wheel? I’d like to know what you the readers think. Would you buy a connected car, or do you have one already? If so do you find it more of a distraction than a help? If you’ve been a passenger in a connected car, did you feel It distracted the driver? Leave a comment and share your thoughts!

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