Friday's Call with Intel and BMW Could be a 'Game-Changer' for Mobileye (MBLY)

Late yesterday, Mobileye (NASDAQ: MBLY), Intel (NASDAQ: INTC) and BMW announced a news conference scheduled for Friday. Reports suggest the three companies are going to unveil a partnership to develop autonomous cars.

Analysts believes this will in fact be the case. Evecore ISI's Arndt Ellinghorst points to the fact that on Mobileye's Q1 2016 conference call, the company revealed that it was in the closing stages of securing two level 4 (full autonomous) production awards launching in the 2019 – 2021 timeframe for shared mobility applications. This appears to be one of those awards.

Ellinghorst believes the news "could be a seminal turning point in the bull / bear debate around Mobileye’s place in Level 4 autonomy and competition / collaboration with semiconductor companies." With the call, it appears Intel is aligning themselves with Mobileye, suggesting they don't want to compete with Mobileye.

Based on the firm's estimation, Intel has been tapped to provide the hardware (large, central GPU) needed at the vehicle level, i.e. the computer that coordinates the myriad components of the car in combination with Mobileye’s autonomous software. Under this scenario, Mobileye will do the mission-critical work of (1) sensing (2) modeling the environment (3) holistic path planning, and (4) most challenging of all, driving “policy,” which is human-level A.I. (think of nuanced interactions with other drivers like nudging forward to merge onto a roundabout with confidence that other drivers will yield).

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