Intel Drives BMW Racing, Technology Deal

Intel (Nasdaq: INTC) will sponsor automobile maker BMW's Sauber F1 racing team and also will partner with the car maker to get more Intel technology into BMW automobiles, the chip giant said this week.

The Sauber sponsorship is a marketing win for Intel, which will replace rival chip maker AMD (NYSE: AMD) as part of BMW's Formula One race team. It also highlights a growing desire on the part of chip makers to build the guts and gadgets of automobiles, where consumers spend much of their time and where information and entertainment systems are increasingly part of the package.

"Clearly, we're seeing an increase in awareness among vendors that automobiles represent a significant opportunity," Jupiter Research vice president Michael Gartenberg told TechNewsWorld.

Market Racing

While the racing sponsorship will increase exposure for Intel and represents a marketing maneuver around competitor AMD, the multi-year agreement will also center on standardization within BMW on Intel technology.

BMW Group staff, for example, will convert corporate notebooks to Intel Centrino technology and will increase the use of Intel-based PDAs internally, the companies said.

The two firms will also develop an industry specification to allow for seamless integration of third-party devices, such as mobile phones and portable media players, into BMW cars.

Bringing Brands Together

Intel and BMW touted their partnership as a combination of "two of the most admired and innovative brands in the world," according to a statement from Intel senior vice president and chief marketing officer Eric Kim.

"Intel's technology and BMW's prowess in the automotive sector are a powerful combination," Kim said. "Intel and BMW intend to collaborate heavily on the [information technology] and marketing side as our brands are very synergistic."

The deal will benefit BMW's IT development, as well as its customers and the Formula One team, said Burkhard Goschel, BMW Group board member for purchasing and development.

"Our methods of systematically turning ideas into innovative products will be excellently supported and complemented by Intel's innovative technology and highly efficient solutions," Goschel said in a statement.

Digital Driving Experience

Considering estimates that 30 percent of automobiles sold in the U.S. will soon ship with Apple (Nasdaq: AAPL) iPod player connectors, Intel saw a need to get into the automobile industry more aggressively, Gartenberg said. The company, which did not disclose specific terms of its BMW partnership, is looking to work with premium brands, and BMW fits the bill in that regard, he noted.

As automobiles become more complex and more digital -- both in terms of driving systems and infotainment technology -- the market becomes even more attractive to the tech industry, Gartenberg added.

"The whole notion is your entire car is run on hardware and software," he said. "So it's a big opportunity for chip makers, as well as software makers."