Chip maker Intel is planning more investment in the Internet of Things (IoT) business, after creating $650 million revenue from IoT in its latest quarter.
Intel needs to enhance investment in IoT innovation to beat technology majors such as IBM and mobile chip major Qualcomm.
“While Intel has a strong, well respected, global brand, Intel lags behind rival Qualcomm in the mobile space and it is playing catch up to IBM in software analytics. Intel will have to come up with a viable strategy – particularly in the mobile space going forward,” said Andrew Brown, executive director of IoT at Strategy Analytics.
Success in the IoT business is important for Intel CEO Brian Krzanich especially when the chip major is going to face challenges in the PC business due to weak market conditions.
Intel considers IoT business as its primary growth engine besides data center. According to the company’s Q1 financial results, the IoT Group grew a remarkable 22 percent year-over-year to $651 million due largely to the performance of the video and retail verticals.
Last year, the Santa Clara, California-based company achieved record revenue in the data center, Internet of Things and Memory businesses. They delivered a combined $2.2 billion in revenue growth.
Going forward, the company expects robust growth in IoT and the company has plans to invest in IoT.
Intel IoT segments
Intel is focusing on key IoT vertical segments including, automotive, energy, retail, smart transportation, smart industrial, smart building and healthcare.
In the automotive industry, the Driver Information System in the all-new 2015 Hyundai Genesis is powered by Intel technology.
Intel also powers BMW’s Navigation system Professional—part of BMW ConnectedDrive—for all its vehicle models, including the new BMW i Series.
Infiniti selected Intel technology to power the company’s Infiniti InTouch in-vehicle infotainment system, and the first application is the Infiniti Q50.
In late May, the company signed in a definitive agreement to acquire Itseez, a company specialized in IoT and self-driving vehicle technology.
In the energy industry, IoT helps power grid’s countless devices to share information in real time to distribute and better manage energy more efficiently.
In the healthcare industry, IoT offers power for healthcare institutions to give personalised care for each patients. Further, it backs wearable health devices.
For retailers, the company offers solutions such as inventory management, data protection technology for transactions and mobile retail.
Intel offers solutions for manufacturers to tackle complexity of modern factory and process automation.
Moreover, the company delivers IoT services for smart buildings, homes and transportation. connected or self-driving cars to intelligent transportation and logistics systems.
Laura DiDio, director of IoT Research at Strategy Analytics, said: “Intel is bringing it’s ‘A’ game to the IoT table and that’s absolutely essential since its rivals are some of the most influential vendors in the business. IoT competition is intense and cutthroat and Intel does face challenges.”
Qualcomm in IoT
Qualcomm CEO Steven Mollenkopf said the company is broadening its presence in the IoT in areas such as automotive, networking and mobile compute.
Qualcomm, the top mobile chip maker, expects these divisions to grow at a CAGR of 18 percent over the next five years.
According to a LexInnova report, Qualcomm holds 724 IoT patents followed by Intel in the second place with 688 patents. Chinese networking provider ZTE is in the third position with 351 IoT patents.
There are now over 1 billion IoT devices that have shipped using Qualcomm technology. Qualcomm IoT powers wearables, action cameras, security and surveillance cameras, virtual reality headsets, drones, and smart city infrastructure.
Intel recently bagged a major order to supply mobile chip to Apple’s forthcoming iPhone 7 phones beating the dominance of Qualcomm. Since IoT is a thriving business for all in the game, Intel can play a leading role in the development of new devices. The growth of 5G mobile technology will be supported by the demand for IoT connectivity among enterprises and devices.