Welcome to the Intel Mobileye Conference Call regarding the acquisition of Mobit. Today's call will be led by the CEO of Mobileye, Professor Amnon Satchawa. Joining him is the Co Founder and CEO of Mobit Nir Eyres and Intel Capital President, Wendell Brooks. Following opening remarks by Professor Sacheron, we will take questions. 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. So I'll give a bit of context. Back in January last 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, teleoperation, customer facing, all the nuances around it and all the business models that are derived from it is part of our roadmap. And 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 or early 2022, a few 100 of self driving vehicles without a safety driver will be providing mobility service.
Then we announced the contract City of Diego in South Korea with the RATP in Paris and also NIO within China. All of those are focused in 2022 and we have 2 more contracts like this in the pipeline focused in Japan. 1 of them will be focused in Japan, another one also focused in France. So we are all geared up to build those elements of the stack. In terms of our timeline, the maturity of our self driving stack, our confidence has only grown in the past 6 months.
We are now at 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 what where are the pain points, where are the value points, what kind of value propositions that we can make, not only customer facing, it's not only B2C, but also B2B value propositions. And the COVID-nineteen in that respect is immaterial. And then I'll explain why. Now in the times of crisis, you either pull back or you lean in.
And this is an example of leaning in because we see 2 fundamental
trends
that are not going to change. One is mobility. People still need to move from place to place, whether there is COVID-nineteen or there isn't COVID-nineteen. And 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.
And this will stay. 2nd big trend is automation. The movement from labor intensive capital intensive where capital is compute. This is an unstoppable trend. And mobility requires lots and lots of compute.
And this is exactly where our core assets, Intel's core assets and Mobileye's core assets rely. We are building silicon. We are building very, very sophisticated software for interpreting information coming from cameras, radars, ladders, decision making in the car, safety models, hardware, sensors, all of that go into a self driving system and then the remaining layers of the stack for mobility as a service. And this is where MoveIt comes in. We invested in MoveIt 2 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.
And the timing of the acquisition was done based on our confidence and maturity of our technology going forward for mobility as a service. So we believe today that the timeline of 2022 is a very realistic timeline. And 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. As a move it, move it is a very, very impressive company. They have a trip planner with 800,000,000 users, about 40,000,000 active 50,000,000 monthly active users, 3,500 cities, about 102 countries.
This is really a formidable data company with very interesting value proposition and monetization. So even as a standalone company, it's a very, very attractive company. But using their data and their insights into a mobility intelligence layer and customer facing layer is key to our global road map of going from a self driving car into a service. So I think I'll stop here unless there is Wendell, do you want to add a few words from your perspective, ICAPS perspective before we go to Q and A?
Yes. I would just add on thank you for those remarks and thank you for everyone gathering today. Relatively unique piece of M and 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 $160,000,000,000 Mobility as a Service market. In a COVID-nineteen 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 Adnan's strategy and way forward as he just talked about. So why don't we open it up to questions? I think this is probably the best way to go from here, Trey.
Thank you.
Sounds good.
Let's go ahead and start questions.
Thank you. We do have a pre submitted question. In terms of the timing of this deal, why now?
The timing You want to
go ahead.
I'll start and Wendell you complete? Yes. So in terms of timing of the deal, the timing is our launch in 2022 of self rising vehicles in a mobility as a service context. We are now in the middle of 2020. We have about 1.5 years 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 and move it data is very, very critical in that respect. The customer facing part of the mobility as a service is also a very, very critical and complex piece of the puzzle. This is where MoveIt also comes to play with our 800,000,000 users. Move It also is an aggregator of mobility where you can not only plan your trip, but also be offered ride hailing services.
So within that app, we'll be able to offer also a mobile shuttle in that respect. So all of this requires time to integrate. So a year and a half of integration is a very, very reasonable timeframe. Waiting longer would have jeopardized our readiness for 2022. So this is the timing.
And as I said before, our confidence in the maturity of our self driving technology is such where we believe that we can meet a time line. This is why we need to make sure that we have all the other layers of the stack ready for 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 and 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 MoveIt, we tick all three of those boxes and I can go into them in a little bit deeper detail. But we're going to be front footed, in this global pandemic where there are opportunities that further our existing strategy. And 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 and A discussion that I think benefit both companies. So the tech inflection here is clear. It's mobility as a service with $160,000,000,000 TAM.
It's an opportunity to accelerate and pull in our access to that market going forward and we took advantage of it.
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 and just wondering if there's any help from MoveIt on the REM product and vice versa?
Does the collection of road data through REM, does that help MoveIt's product at all? And then I have a second one.
Okay. So, we'll start with this. Yes, there's definitely synergy between the kind of data that our REM products collect, especially we are working with the public with the municipalities on doing what is called infrastructure survey, where you can provide information about 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, 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 insight could be a very, 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 kind of how consumers will consume transportation in the future and multimodal. I mean, obviously, AVs could create much more efficient transportation than current rideshare and cheaper. But the way that consumers kind of can interact on their route planning, we've talked to people that see mapping providers and kind of route planning providers as kind of the natural platform for how consumers will plan their trips, will pay for their trips and will kind of interact with transportation. Do you agree with that, that this could be like the browser of transportation?
And is that part of the strategy?
So I'll start and then let Nir Eyre as the CEO of MoveIt to complete. MoveIt 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. So it will be acting as an app very, very similar to what you described right now. But I'll let Nirup 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. And as we move forward, definitely with autonomous vehicles, people do not need to drive. I mean, the vehicles will do the driving and routing to the destination.
So 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. And 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 electrical 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. So 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 1st 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 Gillette with Forrester.
Hi, this is Frank Gillette with Forrester. I want to continue this line of conversation because the aggregator idea makes sense and is already manifest in MoveIt's product and MeGo and several other players in this space. And I agree with the idea that the customers will focus on sort of time, cost and I think you implicitly said experience, but 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, but 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.
So and I can even see caring about mapping not because I have to plan the route, but because I would like a pleasant route. So, give me a sense of the vision, from the point of view of MoveIt 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. So I think with everything you said is already starting to be combined into move it in different levels. I mean, we had 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. However, it's already available today to put some preferences in your personalization component of MoveIT where you care less about walking means that you would like to exercise more rather than you're a senior citizen and walking is very difficult for you. So you can actually set your app to be leaning towards more exercise and walking versus minimize your walking distance.
That's one thing. And it even comes to analyzing the different level of altitude in cities. So if you use city bikes, which are not electrical, I mean, we do care about a hilly route versus more of a flat route. It's really uncomfortable to take a city bike and start riding uphill in San Francisco.
So
it definitely becomes a much bigger part of the assistance that the app provides users.
Right. It becomes much more personalized. So implicitly, you seem to suggest that micro mobility as well as personal mobility, walking or even jogging will be part of the spectrum. I mean, it really suggests that MoveIT becomes a retail base or a service. And if I think about the long term here, there's even the possibility that MoveIT 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.
So that's really a highly personalized service is the vision eventually as opposed to just a convenient app for scheduling robo taxis, if I'm understanding
you? It's already happening as we speak. I mean, when we just started, the scooter companies felt like they can do it standalone. Today, more and more wanted to aggregate their services into Movie, regardless of the fact that the execution of the ride is going to happen within MoveIt. So what you've described is already happening these days.
Your next question comes from the line of Harlan Sur with JPMorgan.
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. But 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. And 2 years ago, we innovated a safety model called RSS, which is a mathematical model finding the right balance between safety and utility. And since then, we have been working with regulatory bodies all over the world to standardize it with very, 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 in our new IEEE work group to standardize this model. So we are 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. Now 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. And 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. And the customer experience, the customer facing experience, the mobility intelligence, all of that also has a safety component to it. So when you think about this end to end, it makes a lot of sense also from a regulatory standpoint.
So I agree with your point.
Your next question is from the line of Patrick Magee with Financial Times.
Hi there. Thanks everyone. I'm interested in what impact COVID-nineteen is having on mobility models. We seem to be moving to sort of the depth of sharing. I think about the idea of carriage seating in a robo taxi 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 Move It business model?
When you think about the taxi, the taxi driver is kind of a source of concern. So the taxi driver is exposed to all the other passengers that are coming into the car. But when you think about a Robo shuttle, a Robo taxi, there is no taxi driver there. So it should have a much better COVID-nineteen value proposition than today's mobility. But I would not overstress the importance of COVID-nineteen in the long term.
In the long term, people interact, 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. So I wouldn't overstress the importance of COVID-nineteen in the long term. And we're really talking about long term.
When we say 2022, 2022 is only the launch of a robotaxi. It will peak many years later. So and COVID-nineteen is only today, and I think it will be over much sooner than people expect.
Your next question will go to the line of Megan Lapenia with Automotive World. Yes. 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?
Well, if you look at the elements of the stack that you need, once you have a self driving vehicle, you need a vehicle. So we have partnerships for supplying that vehicles. For example, we announced with NIO in China, Volkswagen also would be supplying gas vehicles. So that's part of the stack we have. So now we have a self driving vehicle.
The next is the teleoperation. We 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 the startups. We understand the technology.
We may need an inorganic growth or we may not. It's not rocket science in the teleoperation. The next player above that is the mobility intelligence. What I explained before and this is where MoveIt comes in. The next layer is all the customer facing, the fleet optimization and customer facing.
This is also where MoveIt comes in. So when we look at the stack, there are about 9 layers in this stack. And through organic activity and inorganic growth like we did with the Move It, we believe that we have all what we need to meet the 20 22 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 in 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 2 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 IntelMobileye providing a fleet or technology to the fleet? And what level of 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?
So I'll kind of 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 plus 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. So this means that the kind of guarantees that you need to provide from 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 level that guarantees that you need to provide in terms of the mean time between failures is much, much, much higher. It's orders of magnitude higher.
So we are active in this entire spectrum. We are 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 the service or it could be that you provide the service without taking unprotected left turn. You can think of all sorts of constraints, but within that envelope, you are completely driverless. So there's no driver behind the steering wheel. So the 2022 is level 4. It's level 4 and it's geofenced in certain cities.
For example, in Israel, it will be geo fenced in Tel Aviv. In Diego City, it will be geo fenced in certain neighborhoods of Diego City and so forth. But 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.
But in parallel, our mapping activity is designed to build up 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, where 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 to wherever you go. So this is also part of our vision of our roadmap. The Moogit acquisition is part of the roadmap that is about mobility as a service, where 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. And then I want 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. But I want to see your vision of how IntelMobileye is going to monetize this. Is it going to be mainly on the hardware side? Is the service and subscription side going to continue through the MoveIT app?
And how proprietary is this going to be? Because 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 3rd party subscription model will still apply for the MoveIt data itself?
Well, in that two respects, there is the MoveIt current business and data monetization. That will continue uninterrupted. MoveIt is going to remain an independent subsidiary pursuing their own business. We'll help as much as we can to bolster their business, expand their wings and also use their brand and app as part of our longer vision of mobility as a service. There is also this issue of how do we monetize the mobility as a service.
So this is, as Wendell mentioned, it's a 160,000,000,000 dollars market that we estimate by 2,030. And we have a very detailed plan, which talks about multi very double digit, multibillion dollars revenue and significant gross margin going into 2,030. It will start 2022, but going into 2,030. And it includes nuances in terms of the business model. We see 3 different business models.
1 is vehicle as a service, other one is ride as a service and the other one is mobility as a service. And customers would be working so mobility as a service, the customer is the end customer, that's a B2C. But the vehicle as a service and the ride as a service, you work with transit operators and with TNCs, traffic network transportation network companies, where you supply them a fleet and they do the customer facing. And 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. So we're talking about a hierarchy of business models with a very, very clear plan of monetization, which would carve a very nice market segment of this 100 and $60,000,000,000 opportunity.
Your next question is from the line of Matt Hamblin with Deutsche Bankronix.
Hi. Thank you. I think you clarified pretty well. I mean, I just wonder if you would like to react to the when you said 2022 is level 4 or 5, I believe you said that. What's your reaction to Audi backing off of traffic jam pilot in the Audi 8.
I mean, that strikes me that we need a reality check about what is doable. And I just I mean, I covered this as much as I can, but there are a lot of critics of getting to 4 or 5. So I just like your reaction. Thank you.
So I think Mobileye was consistent in all the kind of presentations I gave at the CS. That Level 3 is a very, very problematic niche. Honestly, we do not believe in Level 3 because 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 carmaker needs to guarantee between those two niches is huge, because the driver is no longer responsible.
So system cost redundancies validation, It's a leap. It's an order of magnitude leap with a very small value proposition increment. This is why we believe and this is how we are working. We believe in the level 2 and level 2 plus where level 2 plus is really conditional autonomy where the autonomy envelope is ever increasing. More roads more types of roads and more conditions where you provide more and more value to the driver, but the driver is still responsible.
It's conditional autonomy. And then the second niche is the level 4, level 5, where it starts with the Robo taxi. And this is what I explained in the past that the reason you want to start with the Robo taxi is, 1st, from a regulatory standpoint, it's much easier to regulate the 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.
So 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.
Operator, let's take one more question.
Your final question comes from the line of John Pitzer with Credit Suisse.
Yes. Good morning, guys. Thanks for doing the call. Amit, I just want to talk a little bit about MoveIt as an aggregator. I think I understand that, but 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 MoveIt today kind of point number 1?
And I guess point number 2, can you help me understand how Move It 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, say, Moovit, nothing is going to change. As I said, MoveIt 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 are in the business of creating value, not destroying value.
This is not our style. It was never our style. So whatever relationships Move It 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, kind of value that rent provides, the value that move rates provide can be combined into a much stronger value proposition. So 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.
So level 4 has certain limitations of the operational design domain. And when you are outside of those limitations, when you are outside of the envelope of what a robotaxi in 2022 can provide, you would like to provide other services. And this is where an aggregator becomes very, very useful. And this is one of the main value propositions that Moovit beyond their data will 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 to onboard. And 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 we definitely see Intel Mobileye as a much great support and backup for MoveIt 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 geoterritories?
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 Mobile Live conference call. Thank you for participating. You may now disconnect.