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Here's why Intel can't stop investing in drone companies
(Business Insider screenshot of Intel video)
Intel CEO Brian Krzanich spies a drone
Intel has got a thing for drones.
The world's largest chipmaker announced this week that it invested $60 million in a Chinese drone-maker, marking its third drone investment to date.
What's does Intel see in unmanned aerial vehicles ?
The flying machines are packed with the kinds of sophisticated chips that Intel sells and the popularity of drones makes them an attractive new market for Intel to get a foothold in as its traditional PC business continues to decline.
Processors, WiFi chips and Bluetooth chips can all be used in drones, explains Mike Hung, an analyst with research firm Gartner. Because drones are equipped with technology such as high-definition video cameras for recording, there's also a role for powerful graphics chips, he explained.
Still, while drones are a sexy market in the emerging "Internet of Things" sector, they won't drive significant growth for the tech company in the near future, nor will drones replace all of Intel's lost PC revenue, Hung noted.
"The drone market isn't going to become as large or profitable as the PC market for another decade, if ever," Hung told Business Insider. "But it's got good proof points: it serves large networks the way Facebook is looking at it, [it can be used for] smart farming purposes, it monitors cell towers, and there's recreational uses like recording your kid's softball games. While the drone market isn't as sizeable as PC or smartphone, its tech can be used for a lot of other purposes."
According to a CB Insights report conducted earlier in May, drones startups are in vogue: they raised a record breaking $172 million in equity financing so far this year. Commercial usage for drones has been enjoying speedy growth, compounding more than 3 times as much as military use at 19 percent between 2015 to 2020.
Intel has already invested in two other drone companies, Airware and Precisionhawk.
In a video announcing Intel's latest $60 million investment in Hong Kong-based drone and aerospace company Yuneec, Intel CEO Brian Krzanich said future product collaborations between the two companies will hopefully be a "gamechanger in the drone industry".
Users will soon be able to open a box containing a little drone, controller and built-in screen. They would be able to fly the unmanned aerial vehicles using Android smartphones, and laypeople would be able to control them within five minutes of unboxing the product.
But while Intel is opening its wallet to show its love for drones, Gartner's Hung noted that the company is unlikely to ever build and sell its own drone. Intel doesn't like to sell "end-products" he noted, and will be content providing the innards for the new machines.
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