Why Intel Is Buying Mobileye, And What Does It Need To Do To Be Successful?

In a move that hopes can propel it to the forefront of The Next Big Thing, Intel announced it would purchase Mobileye, an Israeli company that makes sensors and cameras for driverless vehicles. Buying a leader to become a leader is never cheap: Intel will pay $13.3B for the firm, a 34% premium over Mobileye's closing price last Friday. The two companies have a history of collaboration, having announced a partnership with BMW last year to put driverless vehicles on the road by 2021. But until this acquisition, it was hard to take Intel seriously in the automotive market; Intel only has a partial solution in-house. It takes specialized silicon to keep up with the massive data rates generated by a vehicle or a missile, and Mobileye brings that needed capability to Intel.