Intelligent cars draw investors to tech stocks

By Blaise Robinson
PARIS Wed Jul 2, 2014 5:22 am EDT
Chris Urmson, supervisor of Google's Self-Driving Automobile Project, stands in front of a self-
driving vehicle at the Computer system Record Gallery after a discussion in Hill View, The golden
state Might 13, 2014.
Credit history: Reuters/Stephen Lam
PARIS (Reuters) - Technology and telecoms companies could possibly be the large winners in a
linked vehicle market that may be worth $50 billion over the following years, luring financiers far
from conventional automakers.
Chip-makers or tech giants such as Infineon as well as Google are amongst a variety of business
specialized in the quick formulation and also testing of intelligent automobiles from those that drive
themselves to those enabling a motorist to utilize smart phone apps through the dashboard.
A number of carmakers are embracing the trend, with Nissan Motor Carbon monoxide, Volkswagen
AG's Audi and also Toyota Electric motor Corp collaborating with outside tech firms to test self-
driving car technology.
Nonetheless, it is the tech and telecommunications firms - from UNITED STATE bellwethers to tiny
European companies - that are seen benefiting one of the most, fund supervisors and also experts
claimed.
"It's an entire new market emerging," said Christian Jimenez, fund manager as well as president of
Diamant Bleu Gestion.
"The very best means to play it for investors in the lasting is to buy names such as Microsoft or chip
makers such as Infineon, not (car manufacturers) Peugeot and also Renault".
If the new market expands to $50 billion as anticipated by French bank Exane BNP Paribas that
would be about half the size of German carmaker BMW's incomes in 2013.
Web giant Google Inc is leading the charge among technology business, attempting to burglarize the
century-old industry as it deals with its very own models of totally independent automobiles.
It could be a couple of years prior to driverless vehicles hit the trail yet Google is already beveraging
things up in the industry, saying recently that the very first vehicles running its Android Auto - a
voice-enabled software application permitting vehicle drivers to browse maps and also send out
messages while behind the tire - will hit showrooms later this year.
Apple is additionally in the race, with its brand-new CarPlay - which incorporates apple iphones
performance - allowing vehicle drivers to use applications directly using the dashboard to view
maps, make phone calls, hear songs and send and get content messages.
Only concerning 10 percent of automobiles have integrated connectivity today, yet the number is
anticipated to increase to greater than 90 percent by 2020, baseding on the British consulting firm
Machina Research.
"This is not a remote dream, however a five-year race where there is cash to be made, or shed,"
Exane BNP expert Stuart Pearson said in a note to clients, predicting that the marketplace for
connected vehicle solutions would increase by an expected 30 percent a year with to 2020.
EUROPEAN PRESENCE
Investors are additionally eager to select smaller sized, specificed firms at the heart of adjustments
in the vehicle driving.
AKKA innovations, a French engineering company which has actually been establishing a model of
electrical driverless car, has actually viewed its stock soared by nearly six-fold given that 2009.
"The self-governing vehicle is not science fiction, it's actual as well as it's taking place now. The
innovation prepares, it's merely an inquiry of law at this factor," claimed Philippe Obry, head of
research and also formulation at AKKA.
"The suggestion is not to upgrade existing vehicles with brand-new innovations, it's to rethink the
entire industry as well as the means people will utilize automobiles in the future ... We're not an
automobile maker, so it's been simpler for us to believe outside the box."
Shares in French electrical vehicle battery mold Blue Solutions have hopped 130 percent
considering that their initial public offering last October, which was additional compared to 15 times
oversubscribed.
Amongst huge European tech stocks, Nokia and also TomTom are viewed facing their make-or-break
minute with the linked auto, Exane's Pearson claimed.
"The 2 map-makers hold a duopoly in maps for embedded solutions of original tools makers and also
auto component distributors. If these embedded solutions dominate in the long run, our TomTom fair
worth could rise by 32 percent, 13 percent at Nokia."
CHIP MAKERS PROFIT
Experts and fund supervisors additionally view chip makers such as Germany's Infineon as well as
Texas Instruments benefiting from the press into driverless vehicles, while telecom drivers will
certainly additionally win from the improved information earnings, with bigger, cross-border
operators set to dominate.
Last April, Infineon - whose chips trigger airbags, make it possible for boat trip command as well as
cut automobile discharges - raised its profit overview for the year as well as stated it would raise its
reward after posting forecast-beating quarterly outcomes, buoyed by robust demand from the
automobile industry.
Qualcomm and Intel are currently contending to supply chips that attach automobiles to the Internet
as well as processor chips for progressively sophisticated gps and entertainment systems.
Whether made with 3G chips from Qualcomm or Bluetooth and also Wifi chips from Broadcom, every
wirelessly linked automobile requires parts to take care of power amplification, converting and
filtering, made by companies such RF Micro Devices Inc and also Skyworks Solutions. This year,
those two business have actually viewed their stocks surge 91 percent as well as 68 percent
respectively.
"Whether it's connectivity from a phone or an auto or a Nest thermostat or a residence protection
system, the only thing omnipresent throughout the Net of Things is they have to hook up wirelessly,"
said Ascendiant Resources expert Cody Acree, which suggests Skyworks as a play on linked vehicles.
Bosch, STMicro as well as San Jose, California-based InvenSense are providing increasing varieties
of advanced sensing unit chips for braking, driver help as well as various other health features that
are bringing autos nearer to coming to be self-governing.
(Additional reporting by Noel Randewich in San Francisco; Modifying by Lionel Laurent and also
Anna Willard)
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