4 Big Tech Investments in Connected Cars

From chipmakers to SaaS vendors, the tech industry is making significant investments in autonomous cars and connected vehicles. Cars aren’t the first thing to come to mind when you think about many of these companies. The chipmakers, SaaS vendors, and hardware providers that are dropping major coin on automotive tech might make you scratch your head for a second and wonder why they are suddenly so into cars.

There’s no doubt that every tech company is trying to get involved in the IoT in some way. The reason that they are becoming techie-motorheads is that connected and autonomous vehicles are shaping up to be the largest and fastest-growing sector of the IoT. The sector is estimated to be worth $25 billion by 2025, according to Bain and Company. Not to mention that breakthrough innovations in the space will be big news and great PR for the companies involved. Here are some of the tech-sector acquisitions in connected cars that have been making a lot of noise recently.

Intel acquires Mobileye: $15.3 billion

Intel has been inside your PCs for decades, and now they want to be in your self-driving cars. The chipmaker picked up the Israeli digital vision technology company that is developing technology to help autonomous vehicles “see”. Intel and others in the silicon trade have long been threatened by the contracting market for desktop PCs and the volatility of the mobile device market. And Intel has long lost its monopolistic stranglehold on the Microsoft PC market. It needs to diversify and expand its reach, and it hopes to appeal to automakers that want to offer autonomous driving but lack the in-house expertise and do not want to end up giving up their valuable data to the likes of Google in exchange for the tech.

Qualcomm buys NXP: $46 billion

Qualcomm, the world’s largest mobile handset chipmaker, picked up NXP Semiconductors, the biggest chipmaker for the automotive industry. And it makes a lot of sense—demand for handsets is leveling off while tech in cars is rapidly expanding. Qualcomm CEO Steve Mollenkopf is betting the deal, the largest in the chip industry’s history, will accelerate his company’s entry into the burgeoning market for electronics in cars. “If you look at our growth strategy it’s to grow into adjacent markets at the time that they are being disrupted by the technology of mobile,” he said.

Cisco bets on Jasper: $1.4 Billion

Networking giant Cisco picked up Silicon Valley’s Jasper Technologies in large part for its potential in the connected car space. Jasper is the IoT platform that now powers nearly all connected cars, including AT&T’s connected car platform. “Our largest vertical is the connected car market,” said Tom Fisher, Managing Director, ANZ at Cisco Jasper. The platform allows car companies to offer (and monetize) third-party services and the data streams that come with them. “It’s a massive industry for us, but also it’s got a lot of challenges for us that we need to solve,” Fisher said.

Verizon gobbling up connected car tech: $2.4 billion +

Verizon bought both Telogis, a developer of telematics and fleet-logistics systems used by major automakers like Ford, and commercial GPS vehicle tracking firm Fleetmatics, last year. The price paid for Telogis was not disclosed, but it paid $2.4 billion for Fleetmatics. Verizon is not as heavily vested with automakers as AT&T, but it looks like their target is industrial fleet vehicles, which may end up growing even faster than the connected car market. “The acquisitions of Fleetmatics and Telogis positions us to be the leading provider of fleet and workforce management solutions,” said Verizon Telematics CEO Andrés Irlando.

Expect more big acquisitions in 2017

So, that’s $65 billion invested in connected car tech acquisitions in the last year or so alone. And that does not count what companies like Apple, Google, and Microsoft are throwing at the connected car market. As more tech companies are looking to diversify their portfolios and extend their reach, you can expect more big acquisitions and investments in 2017.