Qualcomm’s Autotalks Buy Highlights Importance of Connected Car Ecosystem

Qualcomm

Dealmaking in the chip space underscores the inexorable rise of the connected car ecosystem.

The digitization of transportation, of forging ecosystems where cars and other vehicles — whether people are actively driving them or they’re autonomous — relies on data that flows in real time between those vehicles.

And data relies on chips and sensors.

To that end, chipmaker Qualcomm said Monday (May 8) that it would buy Israeli firm Autotalks in a bid to broaden Qualcomm’s automotive business.

Autotalks makes chips that are designed specifically for what it terms “vehicle to everything” (V2X) connectivity for manned and autonomous vehicles. The chips are focused on improving vehicle safety and preventing accidents. The chips themselves help enable data and information flows that in turn can help alert drivers (and the vehicles themselves) to obstructions and other hazards on the road.

The financial terms of the deal were not disclosed, although reports, including one from TechCrunch, said the purchase price was within the $350 million to $400 million range. Qualcomm, for its part, said Autotalks’ technologies would be folded into its Snapdragon Digital Chassis, its cloud-based offerings that are also focused on automotive connectivity (including infotainment inside the car) and safety.

In September, Qualcomm said its automotive business “pipeline” increased to $30 billion. That tally was up by more than $10 billion in roughly three months.

Safety First?

Safety would be one of the key building blocks that needs to be most comprehensively (and constantly) in place to help turn the car into a more fully connected vessel of commerce — to become a digital wallet on wheels.

Data drives that evolution. Pacts in 2023 show that car-level information will feed new use cases. In one example, Stellantis NV said at the beginning of the year that it would expand its Data-as-a-Service operation through its unit Mobilisights, which licenses B2B products, applications and services.

The readiness to conduct more activities from the so-called car cockpit is there and would conceivably see more widespread adoption as drivers feel at ease with what can be done during the daily commute or a road trip. The latest installment of PYMNTS’ Connected Economy report, which takes the monthly pulse on connected activities, showed that the use of parking apps, for example, is up 30% year on year.

Use cases beget other use cases, as consumers would become more comfortable with the various ways in which they would be identified as they drove, as payment verification is done on the go, and where voice and other channels enable more intuitive interactions.

Earlier this year, Mercedes-Benz said it would leverage Visa technology to enable native in-car payments. Mercedes pay+ allows users to pay for a range of digital services and shop for connected car offerings. Elsewhere, J.P. Morgan announced a deal with German carmaker Volkswagen to buy roughly 75% of its Volkswagen Payments S.A.


Canadian Banks’ Earnings Clouded by Economic Uncertainty

Canadian banks are set to announce their quarterly earnings this week, and while analysts are optimistic about the results, they note that potential U.S. tariffs may dampen the mood.

The Big Six banks — namely, Royal Bank of Canada, Toronto-Dominion Bank, Bank of Nova Scotia, Bank of Montreal, Canadian Imperial Bank of Commerce and the National Bank of Canada — are expected to post moderate earnings growth overall for their first quarter, according to a Monday (Feb. 24) report from The Wall Street Journal (WSJ).

However, a possible trade war with the U.S. means that these banks will need to shore up capital to support elevated credit-loss provisions, or money set aside for loans that don’t get repaid.

“Several analysts have trimmed core earnings forecasts for the sector in anticipation of higher credit-loss provisions on currently performing loans,” the WSJ noted. “Analysts at RBC Capital Markets project total credit-loss provisions will increase about 32% on the prior quarter and about 70% year-over-year across all six banks, to 5.6 billion Canadian dollars ($3.95 billion). Higher provisions will eat into earnings for this quarter.”

On Feb. 1, President Donald Trump enacted a 25% tariff on imports from Canada and Mexico, as well as a 10% tariff on Canadian energy, but later placed a 30-day pause on the levy.

According to a Monday report from CNBC, Trump said he intends to resume the tariffs once the deadline expires next week.

When the tariffs were first announced, Canadian Prime Minister Justin Trudeau announced retaliatory tariffs that will impact U.S. beer, wine, bourbon, fruit, fruit juices, perfume, clothing, shoes, household appliances, sports equipment, lumber and plastics.

As PYMNTS noted at the time, industries reliant on cross-border trade are likely to be the worst affected by a trade war.

“The most immediate impact of tariffs is often felt in supply chains,” PYMNTS wrote. “Industries that rely on the seamless movement of goods across borders are particularly vulnerable. Tariffs, whether they are imposed on raw materials, intermediate goods or finished products, drive up the cost of production. For manufacturers, this often means higher prices for components, parts and materials sourced from countries involved in trade disputes.”

Consequently, businesses have scrambled to diversify their supply chains, shifting from a “just-in-time” to a “just-in-case” model to hedge against geopolitical risks and economic uncertainty. 

A potential trade war has also made consumers uneasy, with consumer sentiment down nearly 10% from last month and about 16% lower than a year ago, according to February data from the University of Michigan’s latest Consumer Sentiment Index.