Amazon’s recent offer to acquire Zoox places them squarely in the Autonomous Vehicle (AV) space, competing with the likes of Waymo, Tesla and others for movement automation of people and goods. As a reminder, Zoox is the San Francisco, California based company with a breathtakingly bold vision – to develop purpose-made autonomous electric vehicles for ride-hailing, and deliver services to consumers through this platform. Executing this vision means competing on multiple fronts with big players- automotive OEMs (designing and building cars), tech companies like Google (who has spent a decade and a fortune to develop the Autonomous Vehicle Driving System or AVS), and ride-hailing companies like Uber and Lyft
A artikel baru-baru covers the details of the Zoox acquisition, and posits that an important driver was Zoox’s expertise in computer vision. More broadly, it’s the ability to use information from multiple sensors like optical cameras, LiDAR, radar, and GPS, along with artificial intelligence and contextual information to perceive the environment and make decisions.
Computer vision and perception are critical for safe AV operation. AVs are potentially big business, but Amazon’s business objectives are larger. Although the initial announcements are all about Zoox continuing on their path to provide people movement, the goods delivery business is probably a bigger and more immediate driver for Amazon – automating long-distance and last-mile trucking and delivery significantly improves profitability in their core business. Computer vision and perception enables this, as it does other Amazon initiatives like drone delivery, robotic movement in warehouses, home security products like Ring, and un-womaned stores like Amazon Go. Potentially, a 3D perception-enabled Alexa could add even more excitement to your home life than it does today! I think Amazon shopped well – the $1.3B acquisition of Zoox (with their talent and IP) looks like a bargain.
Like its competitors in the AV space (Waymo, Argo, Cruise, Aurora, and Yandex), Zoox uses LiDAR as one of the key sensors in their perception suite. However, there is a difference – Zoox procures their LiDARs from external suppliers. Waymo (Google’s AV arm) and Yandex have their own suite of internally developed LiDARs (Google even fought an exciting legal battle with Uber over LiDAR not too long ago). Argo, GM-Cruise and Aurora bought LiDAR companies (Princeton Lightwave, Strobe and Blackmore respectively). They realized that 3D sensing was intimately connected to the quality of the perception suites that they were playing a bigger game in. Direct control over the design, architecture, and features of LiDAR was critical for higher performance and lower latency of the AVS software stacks. I think AmaZoox will need to do the same, not just to support the AV effort, but also the larger efforts discussed above.
One of my previous articles argued that consolidation within the LiDAR space is inevitable given the fact that more than 75 LiDAR companies exist today (some captive) with limited revenues and needs for significant additional investments. With Amazon’s move to acquire Zoox, I think that competition for acquiring high quality LiDAR players (in terms of product, customer design-ins, markets, IP, and talent) will intensify. Figure 1 lays out the ecosystem of players who are likely to compete:
❶ The LiDAR Unicorns – or LUnicorns are stand-alone LiDAR companies who have raised > $200M in funding and have valuations of > $1B. Velodyne, Quanergy, Luminar, Innoviz, and Hesai (and maybe a couple of others) fall in this category. Velodyne recently announced its intention to IPO through a reverse merger with Graf Industrials. As a public company, it can merge with other LUnicorns or acquire smaller and struggling companies. Other LUnicorns could choose to follow a similar route to an IPO and serve as a consolidating force. The recent announcement by Luminar of high-profile executive hires and Velodyne’s IP cross-licensing deal with Hesai could be a preamble to bigger events (Baidu
❷ Amazon and Apple have interests that go way beyond AVs. They both have the resources to buy up LUnicorns. My sense is that Amazoox will invest in companies that serve their trucking, drone, and people movement business first (higher performance) and scale their products to serve logistics, security, and retail applications. The key point here is that Amazon can bring to bear the volume scale required for LiDAR to become a reality – for AVs and multiple other applications. No other company has this type of application bundling requirements and volumes required to scale LiDAR today. Apple currently incorporates 3D sensing capability in their smartphones and computers, and has business interests in AVs, mapping, security, and next-generation AR/VR applications. It is potentially a competing force for Amazon in the quest to acquire high-quality LiDAR companies and talent.
❸ Major tech players for AVS like Waymo, Argo, Yandex, and Aurora already have in-house captive LiDAR efforts which they will nurture. It’s unlikely that they will make more acquisitions in this sector. Others like Baidu, Alibaba
❹ Automotive Tier 1 companies are in a strange position – they have to answer to their powerful OEM customers, generally do not make a lot of money, but still need to deliver cutting edge tech to satiate the OEM’s thirst for features and capabilities. Continental, Valeo, and ZF have internal LiDAR developments and products, while Bosch announced at CES 2020 their plans to develop one. Magna, Mobis, Veoneer, and Aptiv essentially act as manufacturing partners for LiDAR companies (primarily for ADAS at this point). Denso, Hitachi, and Aisin Seiki do not have their own LiDARs, but are unlikely to be active in acquiring LUnicorns. They could however acquire smaller companies, although integrating them into the automotive culture could be difficult.
❺ Semiconductor companies in the AV space include Intel
❻ Finally, the OEMs – the traditional ones would not acquire a LiDAR company because they would not know what to do with them. Lucid recently announced their intention to launch their EVs with LiDAR, primarily for ADAS Level 2 and Level 3 automation. Their plan mirrors Tesla’s – sell EVs to consumers with LiDAR and other sensors, collect data from these cars/computers and use this to move ahead in the AV space. The key difference is that Tesla has more than 500,000 cars/computers on the road without LiDAR sensors, and ambitions of launching Level 4 AVs by end 2020 without the “LiDAR Crutch”. For Tesla to change direction, Elon Musk would have to concede that his views about LiDAR were a mistake. Unlikely, but possible. Lucid has other things to worry about like selling LiDAR equipped cars to consumers and competing with Tesla, Nio and others. They probably do not have the money and focus to buy and integrate a LiDAR company at this point.
Bottom line opinion – Amazon, GM-Cruise, Apple and Intel will probably make aggressive plays for LiDAR within the next 6 months. A couple of LUnicorns will either be acquired or IPO.
The LiDAR companies reading this are probably thinking – Just When I Thought I was Out, They Pull me Back In!