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Wireless Companies Chase After Automotive Technology Makers

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【Summary】Wireless companies are diving into the automotive space.

Original Timothy Healey    Feb 16, 2017 12:40 PM PT
Wireless Companies Chase After Automotive Technology Makers

Verizon and Samsung are among the wireless companies that are investing heavily in the automotive space. 

That's because cars are changing rapidly, thanks to connected-car technology and the need for software for autonomous cars. Not to mention the continuing addition of consumer-friendly comfort and convenience tech, such Apple CarPlay and Android Auto.

It's not just wireless companies. Renesas Electronics is also making a charge to expand its presence in the automotive-tech space. The company, which is based in Tokyo, normally makes electronics for power windows and doors in cars. Now, however, it's planning to buy Intersil, a Milpitas, California-based company that makes computer chips and semiconductors for batteries for hybrid and electric cars, as well as for on-board cameras, for $3.2 billion. Intersil is a supplier for Ford, Nissan and Toyota among others.

Renesas has stated that self-driving cars will be a "reality for consumers by 2020," and it wants to be ready for some level of mass-production, whatever that level is. Earlier this year, in January, Renesas further announced that it had worked with TTTech Computertechnik AG to come up with a prototype for an electronic control unit that was meant for "mass production vehicles with integrated software and tools," which seems to imply autonomous vehicles. The company also works on Bluetooth devices for hands-free calling and radio/music-player connections.

Last year, Verizon Wireless bought Fleetmatics Group plc for $2.4 billion. Fleetmatics works on GPS software that's used for vehicle tracking, and it's based in Dublin, Ireland. The software tracks the location of commercial truck drivers, and it also tracks fuel usage, speed and mileage.

Menawhile, Samsung bought Samford, Connecticut-based Harman International Industries Inc., which makes software that's used with audio systems in vehicles.

"We conclude that organic growth will not get us where we want to go fast enough," Samsung chief strategy officer Young Sohn has said publicly.

What he likely means is that the automotive tech space is booming, and the quickest way for traditional companies to get in on the act is to buy in, instead of taking the time to grow from within. No company wants to miss out on the opportunities that are present in the automotive sphere right now.

With self-driving cars on the way (some self-driving tech is already here, in the form of driving aids), and the continued increases in sales of hybrid and electric cars, not to mention the addition of connectivity tech for comfort and convenience, the time to strike while the iron is hot is now.

The Middle Market

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