Hello, my name is Jonathan Xianqi Zeng. In this episode, I’d like to discuss my takeaways on Mobileye’s development strategy. As you may know, Mobileye was acquired by Intel. However, have you ever thought about whether this company has ever sought partnership with incumbents and tech giants? Here is a quick summary of Mobileye’s decisions including potential partnership choices:
- Not collaborate with Google.
- Mobileye doesn’t have a clear sense of what Google’s business model is. It’s hard for Mobileye to understand how it could fit into Google’s eco-system, and therefore couldn’t understand how a Mobileye and Google collaboration could bring values to Mobileye
- Not sure what they can learn from Google. Given Mobileye’s leading role in autonomous vehicle technology, it’s not clear to Mobileye what they would be able to learn from Google, especially that Mobileye is focused in its own field.
- Mobileye doesn’t know what Google’s longer term goal was. If Google’s goal is to create an ecosystem with the cars, and give out the cars for free but sell software, then it’s disastrous for Mobileye.
- Vision for autonomous vehicles in stages.
- Free drivers from steering wheel, but gives drivers 20 seconds to take back control. Further, there could be issues when driving into downtown, as the crowd in downtown would pose more difficulties.
- Driver can completely go out of loop. This is the most difficult part, because this requires much more computation.
- On branding.
- When it comes to branding, Mobileye CEO Amnon Shashua believes that the downside of pushing out the brand to end customers overweighs the upside. Specifically Mobileye’s argument is that their customers, the OEMs, know that Mobileye’s products
- This is similar to Intel’s decision not to make personal computers. However, Intel did make efforts to brand themselves and sell at a premium.
These strategies are keys that define Mobileye’s strategy. This is very interesting to me, as Mobileye’s position might be faced by many other startups or emerging tech firms as well – the choice between collaborating with incumbents in exchange for various resources that large platforms could provide, and remaining its niche strategy focusing on the area that the firm is great at. In the case of Mobileye, it chose the latter, as the company’s ADAS system is perhaps the best among competitors. Indeed, this strategy worked out for Mobileye.
The EV and autonomous driving market is rising on the horizon for investors – here are several ways to invest:
- Invest in autonomous vehicle manufacturer. Companies: TSLA.
- Invest in autonomous vehicle ecosystem builder. Company: Google, BIDU.
- Invest in supply chain: INTC, and other potential semiconductor and parts builders (be careful however on their pricing power v.s their clients!)