Welcome to the Intel Mobileye Conference Call regarding the acquisition of Moovit. Today's call will be led by the CEO of Mobileye, Professor Amnon Shashua. Joining him is the Co-Founder and CEO of Moovit, Nir Erez, and Intel Capital President Wendell Brooks. Following open remarks by Professor Shashua, we will take questions. At that time, if you would like to ask a question, please press star one on your telephone keypad. I will now turn the call over to Trey Campbell, Vice President of Investor Relations of Intel. Please go ahead.
Thank you, Operator, and welcome everyone to the Intel Mobileye Conference Call to discuss the Moovit acquisition. Before we begin, let me remind everyone that today's presentation may contain forward-looking statements. All statements made that are not historical facts are subject to a number of risks and uncertainties, and actual results may differ materially. With that, let me hand the call over to Professor Amnon Shashua, CEO of Mobileye.
Welcome everybody to this call. I'll give a bit of context. Back in November last year, we had an Investor Day where we officially announced that Intel, through Mobileye, is going all the way from self-driving system to Mobility as a Service. Taking control of all the vertical stacks from a self-driving vehicle, mobility intelligence, fleet optimization, teleoperations, customer-facing, all the nuances around it, and all the business models that are derived from it's part of our roadmap. We have announced a number of deals, all targeting early 2022. The first one that we announced was with a joint venture with Volkswagen, focused on Tel Aviv, and then later all of Israel, where early 2022, few hundreds of self-driving vehicles without a safety driver will be providing mobility service.
We announced contracts, Daegu City in South Korea, with RATP in Paris, and also NIO in China. All of those are focused in 2022. We have two more contracts like this in the pipeline focused in Japan. One of them will be focused in Japan, another one also focused in France. We are all geared up to build those elements of the stack. In terms of our timeline and maturity of our self-driving stack, our confidence has only grown in the past six months. We are now fairly confident that we'll meet the timeline from a self-driving system stack. We have been working quite a lot to study both the business of Mobility as a Service, come up with understanding of where are the pain points, where are the value points, what kind of value propositions that we can make.
It's not only customer-facing, it's not only B2C, but also B2B value propositions. The COVID-19, in that respect, is immaterial, and I'll explain why. Now, in the times of crisis, you either pull back or you lean in. This is an example of leaning in, because we see two fundamental trends that are not going to change. One is mobility. People still need to move from place to place, whether there is COVID-19 or there isn't COVID-19. The movement of people is a big ecosystem. It's public transport, it's micro-mobility, it's taxis, it's shuttles, it's buses, and so forth. This will stay. Second big trend is automation. The movement from labor-intensive to capital-intensive, where capital is compute. This is an unstoppable trend. Mobility requires lots and lots of compute. This is exactly where our core assets, Intel's core assets and Mobileye's core assets rely.
We're building silicon, we're building very, very sophisticated software for interpreting information coming from cameras, radars, lidars, decision-making in the car, safety models, hardware, sensors, all of that go into a self-driving system, then the remaining layers of the stack for Mobility as a Service. This is where Moovit comes in. We invested in Moovit two years ago as part of our long-term strategy of studying this company and understanding the value that it can bring into our longer-term vision. The timing of the acquisition was done based on our confidence and maturity of our technology going forward for Mobility as a Service. We believe today that the timeline of 2022 is a very realistic timeline.
Now taking back the time of integration that will be required to integrate Moovit's value proposition into a Mobility as a Service requires that acquisition would be done now. Moovit is a very impressive company. They have a trip planner with 800 million users, about 40 million, 50 million monthly active users. 3,500 cities, about 102 countries. This is really a formidable data company with very interesting value proposition and monetization. Even as a standalone company, it's a very attractive company. But using their data and their insights into a mobility intelligence layer and a customer-facing layer is key to our global roadmap of going from a self-driving car into a service. I think I'll stop here unless Wendell, do you want to add a few words from your perspective, iCAP perspective, before we go to Q&A?
I would just add, Amnon, thank you for those remarks and thank you for everyone gathering today. Relatively unique piece of M&A on a relatively unique company. The opportunity for us to be able to work with Nir and his team on a more close basis and to protect the data set that he's created and the network of data gathering that he's created really will accelerate our opportunity to attack the $160 billion Mobility as a Service market. In a COVID-19 world, we were fortunate to know Nir and his team and get to a transaction relatively quickly, even though we've all been working from home and doing it via Zoom, Webex, and Skype. It's worked very well, and we're excited. We know the company well, and it's a great fit with Amnon's strategy and way forward, as he just talked about. Why don't we open it up to questions?
I think it's probably the best way to go from here, Trey.
Thank you.
Sounds good. Let's go ahead and start questions.
Thank you. To ask a question, please press star one on your telephone keypad. Again, if you would like to ask a question, press star one. We do have a pre-submitted question. In terms of the timing of this deal, why now?
The timing-
You want that or I'll-
No, no.
Go ahead.
I'll start, and Wendell, you complete?
Yes.
In terms of timing of the deal, the timing is our launch in 2022 of self-driving vehicles in a Mobility as a Service context. We are now in the middle of 2020. We have about a year and a half to fill in the layers of the stack above a self-driving vehicle. This includes mobility intelligence, which includes data about planning and fleet optimization, how to place vehicles. You need data from movement of people, usage of transportation from people, how to place your vehicles in an optimal manner, minimize the number of vehicles that you need to meet a demand. All of this is called mobility intelligence, Moovit data is very critical in that respect. The customer-facing part of the Mobility as a Service is also a very critical and complex piece of the puzzle. This is where Moovit also comes to play with their 800 million users.
Moovit also is an aggregator of mobility, where you can not only plan your trip but also be offered ride-hailing services. Within that app, we'll be able to offer also a robo-taxi or robo-shuttle in that respect. All of this requires time to integrate. A year and a half of integration is a very, very reasonable timeframe. Waiting longer would have jeopardized our readiness for 2022. This is the timing. As I said before, our confidence in the maturity of our self-driving technology is such where we believe that we can meet a timeline. This is why we need to make sure that we have all the other layers of the stack ready for a Mobility as a Service offering, and this has driven the decision to acquire now. Wendell?
Yes. I'd just add, I think Bob Swan has been very consistent in his criteria for inorganic growth within Intel, and I live by that with both Intel Capital equity investing and in the M&A strategy. We're going to seek out areas where there are technology inflections that we think our technology can exploit and take advantage of those inflections. We're going to look for big markets that have large TAM that we can grow into, and we're going to generate a positive return for our shareholders. If we meet those three criteria, and I think with Mobileye and with Moovit, we tick all three of those boxes, and I can go into them in a little bit deeper detail. We're going to be front-footed in this global pandemic where there are opportunities that further our existing strategy.
I think in this example, the opportunity, Nir and his team were going to undertake another round of capital raising. When the pandemic hit, it caused us to continue discussions about how we might work more closely together and build on our existing relationship, and that turned into an M&A discussion that I think benefits both companies.
The tech inflection here is clear. It's Mobility as a Service with $160 billion TAM. It's an opportunity to accelerate and pull in our access to that market going forward, and we took advantage of it.
Operator, do we have the next question?
Yes. Your next question comes from the line of Dan Galves with Wolfe Research.
Hi. Thanks for hosting the call. Thanks for taking my questions. I have two questions. The first one relates to your own mapping strategy. Just wondering if there's any help from Moovit on the REM product, and vice versa. Does the collection of road data through REM help Moovit's product at all? I have a second one.
Okay. We'll start with this. Yes, there's definitely synergy between the kind of data that our REM product collects, especially, we are working with the municipalities on doing what is called infrastructure survey, where you can provide information about the road conditions, about traffic sign conditions, also about traffic conditions like places of jaywalkers, areas that could be dangerous for pedestrians. All of these are collected automatically by our REM product. On the other hand, Moovit is also collecting a lot of insight that they sell also to municipalities about insights that are used for city planning, where to place bus stops in order to optimize traffic flow, movement flow.
The combination of these two pieces of insights could be a very powerful value proposition to municipalities, and this is one of the things that we would pursue as coming with a unified value proposition to municipalities and make both companies stronger.
Great. The second question is more on the topic of how consumers will consume transportation in the future and multimodal. Obviously, AVs could create much more efficient transportation than current rideshare and cheaper. The way that consumers can interact on their route planning, we've talked to people that see mapping providers and route planning providers as the natural platform for how consumers will plan their trips, will pay for their trips, and will interact with transportation. Do you agree with that this could be like the browser of transportation, and is that part of the strategy?
I'll start and then let Nir Erez, as the CEO of Moovit, to complete. Moovit's app started as a trip planner, but it's moving towards an aggregator, where you are not only planning your trip, but you are being offered additional mobility services like an Uber or a Lyft. Later it would be a robotaxi. It will be acting as an app very similar to what you described right now, but I'll let Nir maybe provide a bit more color into this topic.
Thank you. Absolutely. In your question comes an assumption that map is still crucial for people to plan their trip. As we move forward, definitely with autonomous vehicles, people do not need to drive. The vehicles will do the driving and routing to the destination. The map itself becomes less and less important. What becomes way more important is the ability to aggregate multiple options of the service into one platform that people will be way more focused on the time of the trip, the cost, and number of switches between different modes of transportation.
We see the trend goes directly to this direction today, because even if you combine a ride-hailing service to the train station, then get with the train to the center of the city and take an electric bike, people care less about the map component of it and way more about how these different modes of transportation combines and how much it's going to cost. I think the focus that we're putting now is way more on the ability to aggregate all different modes of transportation, and in specifically, if we integrate the robotaxi, the autonomous vehicle, into it for first mile, last mile, and the ability to have a frictionless payment process, that's going to be the winning platform for users.
Great. Thank you.
Your next question comes from the line of Frank Gillett with Forrester.
Hi, this is Frank Gillett with Forrester. I want to continue this line of conversation because the aggregator idea makes sense and is already manifest in Moovit's product and Nego and several other players in this space. I agree with the idea that the customers will focus on time, cost and, I think you implicitly said experience. Here's what I'd like you to elaborate on. To what extent will micro-mobility modes play into the spectrum of options here, plus simply walking, and how soon and in what ways will I be able to optimize my trip, not just for time and cost. For example, to get exercise. For some of us, I happen to be one of them, my commute is an important component of my daily motion and activity and hitting my activity tracker goals.
I can even see caring about mapping, not because I have to plan the route, but because I would like a pleasant route. Give me a sense of the vision, from the point of view of Moovit, about how expansive this notion of aggregation gets and when and how it moves to orchestration, and how much it really becomes an advice and assistance service rather than just a trip aggregator.
Nir, do you want to take it?
Yes, sure. I think with everything you said is already starting to be combined into Moovit in different levels. We have to take care of the bread and butter first, just to make sure.
Let people understand what's the best way to get from point A to point B. It's already available today, to put some preferences in your personalization component of Moovit, where you care less about walking means if you would like to exercise more rather than, you are a senior citizen and walking is very difficult for you. You can actually set your app to be leaning towards more exercise and walking versus minimize your walking distance. That's one thing.
It even comes to analyzing the different level of altitudes in cities. If you use city bikes, which are not electrical, we do care about a hilly route versus more of a flat route.
Yep.
It's really uncomfortable to take a city bike and start riding uphill in San Francisco. It's definitely becomes a much bigger part of the assistance that the app provides users.
Right. It becomes much more personalized. Implicitly, you seem to suggest that micro-mobility as well as personal mobility, walking or even jogging, will be part of the spectrum. It really suggests that Moovit becomes a retail space or a service. If I think about the long term here, there's even the possibility that Moovit is in effect the retail brand through which people engage these services, even if underneath you're being referred to other parties to provide some parts of the journey. That's really a highly personalized service, is the vision eventually, as opposed to just a convenient app for scheduling robotaxis, if I'm understanding you.
It's already happening as we speak. When we just started, the scooter companies felt like they can do it standalone. Today, more and more wanted to aggregate their services into Moovit regardless of the fact that the execution of the ride is going to happen within Moovit. What you've described is already happening these days.
Your next question comes from the line of Harlan Sur with JP Morgan.
Hi. Good morning. Thanks for taking my question, and thanks for doing the call. When I think about your full stack approach, hardware, software, fleet management, route optimization, I think about much easier to implement, faster potential time to market. Just as importantly, I'm wondering if global regulators are finding that a fully integrated solution is also favorable. Problem-solving, traceability, all sort of contained in one solution. Would seem to be an advantage, but have you had any feedback from the regulators?
When you talk about regulators in the context of autonomous driving, this is one of the biggest pain points that you have when you think about launching such a service. Two years ago, we innovated a safety model called RSS, Responsibility-Sensitive Safety, which is a mathematical model finding the right balance between safety and utility. Since then, we have been working with regulatory bodies all over the world to standardize it with very strong traction. Some countries have already standardized it, like China. Other countries, like the U.S., industry actors joined together with us to create programs like a new IEEE work group to standardize this model.
We have a very good traction on a regulatory front to meet the 2022 timeline, such that when we launch a robotaxi or we launch a robotic driver, we would know what the stakes are from a regulatory standpoint. Your point is taking it even further. You are saying that if we have a fully integrated solution, not just a self-driving system, but also the complete service, that should make regulatory bodies even more comfortable with the notion of a robotic driver. I agree with this point. It's really an end-to-end experience from a regulatory experience, because you need to take care of teleoperation. You need to take care of monitoring the passengers in the car. It's not just simply selling a self-driving vehicle to an operator. It's much more complicated than that.
The customer experience, the customer-facing experience, the mobility intelligence, all of that also has a safety component to it. When you think about it end to end, it makes a lot of sense also from a regulatory standpoint. I agree with your point.
Your next question is from the line of Patrick McGee with Financial Times.
Hi there. Thanks, everyone. I'm interested in what impact COVID-19 is having on mobility models. We seem to be moving to the death of sharing. I think about the idea of carriage seating in a robotaxi being pretty much the opposite of what people want right now. Presumably, we'll see the return of people wanting to drive their own vehicles in the coming months, maybe years. How does that impact the Mobileye business model, the Moovit business model?
When you think about the taxi, the taxi driver is a source of concern because the taxi driver is exposed to all the other passengers that are coming into the car. When you think about a roboshuttle, a robotaxi, there is no taxi driver there, so it should have a much better COVID-19 value proposition than today's mobility. I would not overstress the importance of COVID-19 in the long term. In the long term, people interact face-to-face. People need company. People need mobility. Owning your own car doesn't solve all your mobility solutions. In dense cities like San Francisco, like in New York, driving with your private vehicle could be a nightmare. I wouldn't overstress the importance of COVID-19 in the long term. We're really talking about long term. When we say 2022 is only the launch of robotaxis. It will peak many years later.
COVID-19 is only here today, and I think it will be over much sooner than people expect.
Your next question will go to the line of Megan Lampinen with Automotive World.
Yeah. I was interested in hearing a little bit more about what Mobileye might need to achieve its aim of becoming this complete mobility provider. Are there any remaining gaps in your internal capabilities that you'd still like to plug before you can claim to become that?
If you look at the elements of the stack that you need. Once you have a self-driving vehicle, you need a vehicle. We have partnerships for supplying us vehicles. For example, we announced with NIO in China. Volkswagen also would be supplying us vehicles. That part of the stack we have. Now we have a self-driving vehicle. The next is the teleoperation. You need to be able to remotely observe what is happening with the car, especially if there is blockage and you need to provide some guidance to the robotic driver. This is an area that we are very active. We are working with startups. We understand the technology. We may need an inorganic growth or we may not. It's not rocket science, the teleoperation. The next layer above that is the mobility intelligence.
What I explained before, and this is where Moovit comes in. The next layer is all the customer-facing, the fleet optimization and customer-facing. This is also where Moovit comes in. When we look at the stack, there are about nine layers in this stack, and through organic activity and inorganic growth like we did with Moovit, we believe that we have all what we need to meet the 2022 launch.
Next call, operator.
Your next question comes from the line of William Stein with SunTrust.
Great. Thank you for taking my question. Amnon, you have mentioned a few times on this call the concept of fully autonomous experience in 2022, not all that far away, as you also highlighted. When Mobileye was an independent public company, there were two very clear camps of thought on, let's say, these advanced driver assistance features. The incrementalist view, which suggested maybe someday we'll get closer and closer to full autonomy, and then sort of the moonshot approach. Now, I realize you've been talking about this 2022 goal for a while, but perhaps you can just remind us, when you're talking about full autonomy by 2022, is Intel/Mobileye providing a fleet or technology to the fleet? What Level autonomy are we talking? Is it Level 5 anywhere around the world under any conditions? Or is it more limited in some geographic or some other ?
In a nutshell, Mobileye is active in the full spectrum from driving assist, let's call it Level 2, and conditional autonomy, let's call it Level 2+, up to Level 4 or 5. It's a continuum. This continuum has a discontinuity at the point of who is responsible. When you talk about driving assist, the driver is always responsible. This means that the kind of guarantees that you need to provide from a safety perspective. Take into account that the driver is responsible. For example, if there is a false negative in detecting a road user, there's still a driver there who's responsible for taking action. When you talk about Level 3 and above, the responsibility goes to the technology.
There is a robotic driver making a decision, and this is where the level of proficiency, the level of validation, the guarantees that you need to provide in terms of the mean time between failures is much higher. It's orders of magnitude higher. We are active in this entire spectrum. We're building Level 4 capability. The difference between Level 4 and Level 5 is in the Operational Design Domain. Level 5 means that Operational Design Domain is open anywhere, everywhere, under all conditions. Level 4 means that there could be some conditions under which you will not provide the service. Could be when it's snowing, you'll not provide a service, or could be that you provide a service without taking unprotected left turns. You can think of all sorts of constraints, but within that envelope, you are completely driverless. There's no driver behind the steering wheel.
The 2022 is Level 4. It's Level 4, and it's geofenced in certain cities. For example, in Israel, it will be geofenced in Tel Aviv. In Daegu City, it will be geofenced in certain neighborhoods of Daegu City and so forth. This is just the beginning. The idea of the Mobility as a Service is to expand the number of cities, to expand the number of geofenced areas. We are talking about hundreds of cities ramping up till the end of the decade. In parallel, our mapping activity is designed to build out the high-definition maps automatically everywhere in the world such that by 2024, 2025, where we both reduce the cost of technology and have maps everywhere, we'll be able to provide this everywhere experience of autonomous driving, which would be relevant for consumer autonomous vehicles.
You buy your own car, could be slightly more expensive, but you buy your own car, and whenever you want, you can sit in the back seat and have the car take you wherever you go. This is also part of our vision, of our roadmap. The Moovit acquisition is part of the roadmap that is about Mobility as a Service. It's not that we build a vehicle and we sell it, we build a vehicle, and then we find value propositions which are B2B and B2C.
Your next question is from the line of Ross Seymore with Deutsche Bank.
Hi, guys. Thanks for letting me ask a question. Amnon, I wanted to ask a question about the monetization of this. The value of the data is clear on the mobility intelligence side, as you just highlighted in answering the last question. I want to see your vision of how Intel/Mobileye is going to monetize this. Is it going to be mainly on the hardware side? Is the service and the subscription side going to continue through the Moovit app? How proprietary is this going to be? I can see the value being extremely high, but you wanting to control that value through your hardware side, or is it going to be something that the third-party subscription model will still apply for the Moovit data itself?
There are two respects. There is the Moovit current business and data monetization. That will continue undisrupted. Moovit is going to remain an independent subsidiary pursuing their own business. We'll help as much as we can to bolster their business, to expand their wings, and also use their brand and app as part of our longer vision of Mobility as a Service. There's also this issue of how do we monetize the Mobility as a Service. This is, as Wendell mentioned, it's a $160 billion market that we estimate by 2030. We have a very detailed plan which talks about double-digit multibillion dollars revenue and significant gross margin going into 2030. It will start 2022, but going into 2030. It includes nuances in terms of the business models. We see three different business models.
One is the vehicle as a service, the other one is ride as a service, and the other one is Mobility as a Service. Mobility as a Service, the customer is the end customer, that's a B2C. The vehicle as a service and the ride as a service, you work with transit operators and with TNCs, Transportation Network Companies. Where you supply them a fleet, and they do the customer facing. The vehicle as a service, you supply the vehicle and the mobility intelligence, and they do the fleet optimization, and they do the customer facing. We're talking about a hierarchy of business models with a very clear plan of monetization which would carve a very nice market segment of this $160 billion opportunity.
Your next question is from the line of Matt Hamblen with Fierce Electronics.
Oh, hi. Thank you. I think you clarified pretty well. I just wonder if you would like to react to when you said if 2022 is Level 4 or 5, or I believe you said that. What's your reaction to Audi backing off of their Traffic Jam Pilot in the Audi A8. That strikes me that we need a reality check about what is doable. I covered this as much as I can, but there are a lot of critics of getting to 4, 5. I'd just like your reaction. Thank you.
I think Mobileye was consistent in all the kind of presentations I give at the CES, that Level 3 is a very, very problematic niche. Honestly, we do not believe in Level 3. I'll tell you why, because the difference between conditional autonomy, where the driver is responsible, to a Level 3 in which the driver is given a significant grace period, say tens of seconds before the driver needs to take control, the difference from the value proposition to the driver is very, very small. On the other hand, the liability and what the car maker needs to guarantee between those two niches is huge, because the driver is no longer responsible. System costs, redundancies, validation, it's a leap. It's an order of a magnitude leap with a very small value proposition increment.
This is why we believe, this is how we are working, we believe in the Level 2 and Level 2+, where Level 2+ is really conditional autonomy, where the autonomy envelope is ever-increasing. More roads, more types of roads, more conditions, where you provide more and more value to the driver, the driver is still responsible. It's conditional autonomy. Then the second niche is the Level 4, Level 5, where it starts with robotaxi, this is what I explained in the past, that the reason you want to start with robotaxi is first, from a regulatory standpoint, it's much easier to regulate a fleet than to regulate the consumer when you're talking about a robotic agent. It's the teleoperation that you have in a robotaxi.
It is the cost that you can absorb a much higher cost of the technology than in a consumer car. A few years of robotaxi would be the bridge towards the next phase, which is consumer autonomous vehicles. Again, Level 4, Level 5. We at Mobileye, we do not believe in a Level 3 niche.
Hey, operator, let's take one more question.
Your final question comes from the line of John Pitzer with Credit Suisse.
Yeah. Good morning, guys. Thanks for doing the call. Amnon, I just want to talk a little bit about Moovit as an aggregator. I think I understand that. Help me understand, is there a natural tension as you try to vertically integrate this within Mobileye with some of the customers and partners of Moovit today, kind of point number one? I guess point number two, can you help me understand how Moovit helps you become a more valuable partner with potential auto OEMs that you're looking to be the engine of their autonomous driving?
With respect to existing customers of Moovit, nothing is going to change. As I said, Moovit remains an independent subsidiary. The services, the value propositions they provide to their customers will remain intact. We are not in the business of blocking others. We're in the business of creating value, not destroying value. This is not our style, was never our style. Whatever relationships Moovit has with their customers will continue, and we'll try to help and then provide more value, like the example I gave about providing value to municipalities, the kind of value that RAM provides, the value that Moovit provides, can be combined into a much stronger value proposition. That is not going to change.
The rest, in terms of what an aggregator value, what it provides us, it provides us the ability to provide a robotaxi with a Level 4 rather than a Level 5. A Level 4 has certain limitations of the Operational Design Domain, and when you are outside of those limitations, when you're outside of the envelope of what a robotaxi in 2022 can provide, you would like to provide other services. This is where an aggregator becomes very, very useful, and this is one of the main value propositions that Moovit, beyond their data, would provide us. Maybe Nir can provide a bit more color. Nir, is there anything to add to that question?
Just to follow up what you just said, we received the full autonomy to keep working with our current partners and even bring others on board. It's less than 24 hours since the announcement about the acquisition. We already discussed this with most of our large strategic partners. They're all very excited about that, and they definitely see Intel and Mobileye as a much great support and backup for Moovit to provide more and more information on the platform. We would like to keep our neutrality, if you can say that, in order to bring as much, or to cover as much user base and geo territories.
All right. Amnon, Nir, Wendell, thank you, and thank you all for joining us today. Operator, could you please go ahead and wrap up the call?
Thank you. Announcement materials can be found in the Intel newsroom, where a replay of today's call will also be made available. We will now conclude today's Intel Mobileye conference call. Thank you for participating. You may now disconnect.