Shara Tibken of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--Intel Corp. (INTC) processors will soon be powering the "infotainment" systems in new Nissan Motor Co. (NSANY, 7201.TO) vehicles, the chip company said, continuing its efforts to broaden beyond its core PC market.
Intel's Atom processor, which is used in netbooks and is starting to gain traction in smartphones, will appear in certain Nissan vehicles starting in 2013, the Silicon Valley company said. The chips, a version of Atom optimized for the auto market, will power the infotainment system, providing drivers and passengers with features such as traffic information and navigation, as well as movies.
"This is really the starting point of us becoming a significant player in the automotive market," said Ton Steenman, vice president of Intel's intelligent-systems group. "It's clear the car is becoming the next big connected mobile device."
Steenman, citing industry analyst research, said the car will be among the top three Internet-connected devices by 2014.
"This is a market we absolutely want to be in," he said. "It will give us a significant growth opportunity."
Intel shares, up 42% over the past 12 months, closed up 14 cents, or 0.5%, at $28.07.
The announcement Thursday follows a recent push by Intel into markets outside the computer industry. While Intel continues to experience strong demand for its PC chips, the strength is largely coming from emerging markets, not mature areas such as the U.S. And increasing popularity of smartphones and tablets is hurting demand for traditional notebook and desktop computers.
Intel's Atom chip recently has been gaining traction in mobile devices, and the company has worked to sell its processors for use in other industries. Cars are becoming a major target as more computing power is added for safety, engine control, navigation and entertainment.
To help build the market, Intel earlier this year set up a $100 million venture-capital fund. At the time, it also said it would establish a product-development center in Germany that would focus on the field.
Intel struck infotainment agreements with BMW AG (BMW.XE) and Mercedes-Benz about a year ago, though no cars using its chips have appeared on the market from the companies. Steenman said they should be announcing model year and car types "shortly." Two vehicles using Atom chips were announced in China late last year, he added.
And the company is doing research with other automakers such as Toyota Motor Corp. (TM, 7203.TO), Steenman said, on the use of new technologies like gesture recognition and pupil tracking.
Intel said Thursday its partnership with Nissan also includes joint research into areas such as vehicle-video surveillance via smartphones and vehicle access and control via smartphones. It also is looking at cloud-based services for vehicles, which would allow users to access information over the Internet.
While Intel is making strides in the auto market, it still faces difficulties. The company is known for microprocessors, which run large pieces of software and usually work alongside separate memory chips. Most cars use simpler microcontrollers, which have built-in memory and are sold by companies such as Renesas Electronics Corp. (6723.TO, RNECY), Freescale Semiconductor Holdings I Ltd. (FSL) and Texas Instruments Inc. (TXN).
Steenman, however, said vehicles are starting to require stronger processing power as the infotainment systems become more high tech.
"You might be playing a movie in the backseat, show navigation on the main screen and vehicle data on the bottom screen, and a phone call might come in," he said. "There are many, many tasks that all happen at the same time that all need to be resolved. You need a much [higher] performing platform to do all that."