Waymo makes swift business diversification move
Alphabet’s (GOOGL) self-driving arm, Waymo, is getting into the sensor business, representing a swift business diversification move by the unit. Just last December, Waymo entered the ride-hailing market, which Goldman Sachs predicts will be worth $285 billion in revenue by 2030 from $36 billion in 2017. Waymo is currently providing ride-hailing services using self-driving vehicles in parts of Phoenix, Arizona.
In the sensor business, Waymo last month announced that it will start selling its custom laser-mapping sensors known as LIDAR (light detection and ranging sensors). But Waymo is unlikely to sell its LIDAR sensors to Ford Motor (F) and General Motors (GM), which are competing with it in developing self-driving vehicles, and are also eyeing the driverless taxi market. According to Waymo, it will sell its LIDAR sensors to companies not involved in building self-driving vehicles.
WAKE UP WITH BAGELS & STOX, OUR NEW EMAIL THAT ENTERTAINS AND INFORMS YOU BEFORE THE DAY STARTS. SIGN UP HERE!
Waymo wrestled with Uber over LIDAR technology
The sensor market presents an attractive revenue opportunity for Waymo. According to Allied Market Research, the global sensor market is expanding at a rate of more than 11% annually and will be worth $241 billion in revenue by the end of 2022.
Waymo’s LIDAR technology was at the center of the company’s high-profile legal dispute with Uber. Waymo sued Uber alleging theft of trade secrets. The companies settled the dispute in 2018 with Uber agreeing to pay $245 million to Waymo.
Waymo enters market dominated by Uber
Waymo’s main business currently is ride-hailing. It competes with Uber and Lyft (LYFT) in this market. According to data from Second Measure, Uber and Lyft dominate the ride-hailing market in the United States with a 67.3% and 30.3% market share, respectively, as of February. Lyft went public on March 28. Uber is also expected to go public this year. SoftBank (SFTBF), whose business interests span telecommunications and technology, is a large investor in Uber.