Nissan Motor Co. (7201)’s vehicles will use Intel Corp. (INTC) microprocessors for in-car information and entertainment systems starting next year, helping the largest chipmaker lessen its reliance on sales to computer makers.
Intel Chief Executive Officer Paul Otellini has identified the auto industry as an opportunity to diversify beyond the personal-computer business, which now accounts for more than 90 percent of revenue. Intel, which also has deals with Daimler AG and Bayerische Motoren Werke AG, is trying to persuade more carmakers that enhanced computing functions can woo consumers.
“The industry is in the middle of this very significant transition to bring much richer connectivity into the vehicle,” Ton Steenman, vice president of Intel’s intelligent systems group, said in the statement. “We are beyond the pivot point of this becoming a significant business.”
Intel will help speed the introduction of consumer electronics functions in vehicles, Andy Palmer, Nissan’s executive vice president in charge of Infiniti, said in the statement.
“We spend about four years developing a car and it lasts in the market about six years with a minor change in the middle,” Palmer said. “That has been OK for the last 80 years, but consumer electronics and smartphones are moving at a much faster cycle.”
Nissan is trying to separate electronics that control things such as the engine and brakes from the in-vehicle information systems. The rate of innovation in electronic systems facing the driver is increasingly going to be a “battlefield” in the competition for car buyers, Palmer said.
Cars need a better way to work with personal electronic devices, such as mobile phones, and connect with services provided by remote computers over the Internet, said Intel’s Steenman.
The two companies have been jointly testing systems with new features such as sensors and rearview cameras to alert the owner when a car gets hit in a parking lot. Future systems may also use a chip or bar code on a mobile phone’s screen to replace keys, Intel said.
Intel rose 0.5 percent to $28.07 at the close in New York. Nissan fell 2 percent to 852 yen at 9:16 a.m. in Tokyo trading.
Nissan is targeting a 14 percent increase in U.S. sales of Nissan and Infiniti autos this year, and for global deliveries to rise 12 percent to 5.4 million vehicles, Carlos Ghosn, CEO of both the Yokohama, Japan-based company and France’s Renault SA, said in New York this week.
Ghosn has also committed Nissan to dominating an emerging global market for all-electric vehicles, led by its Leaf compact. That hatchback features a smartphone application to let drivers remotely check the level of battery charge, begin and end charging, see estimated driving range and turn on or off the car’s heating and cooling system.
A version of the electric Infiniti model shown yesterday will be sold within two years, Nissan said. The all-electric sedan has a 24-kilowatt-hour lithium-ion battery pack that provides about 100 miles (160 kilometers) of driving range per charge, the company said.
Last year, the division that includes Intel’s car-chip business increased sales 64 percent to $5 billion. The unit also includes the business that’s trying to get Intel processors in mobile phones and tablets. Intel had $54 billion in total revenue last year.
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