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Intel to Partner SoftKinetic

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The world’s largest manufacturer of semiconductor products, Intel Corp (INTC - Free Report) recently announced its collaboration with SoftKinetic to develop 3D sensor and gesture recognition solutions for different platforms, including Ultrabook, notebooks, desktops, All-In-One personal computers (PCs) and tablets.

Per the terms of the agreement, Intel will license SoftKinetic’s gesture recognition software platform, iisu, within its Perceptual Computing software development kit (SDK).

Founded in Jul 2007, the Belgian company SoftKinetic provides motion control or gesture-based recognition solutions. This technology is widely used in a variety of devices in the consumer electronics and health & fitness markets. Currently, this technology is in use in the video game industry as well. Gaming consoles such as Microsoft Corporation’s (MSFT - Free Report) Kinect and Nintendo’s Wii are already equipped with this technology.

Currently, motion-based or gestures-based technology is gaining immense popularity. It is the next big thing in the technology world. The ease of use it offers-- tapping anywhere on the screen to play  a song, pause it or swipe the screen to change the track -- is the primary reason for its popularity.

Although gesture-based technology is still in a nascent stage, apps are already being developed. Start-up companies like Flutter are allowing PCs powered by Apple Inc.’s (AAPL - Free Report) Mac and Microsoft Windows to control their music by downloading the app. The users, through gestures, can use applications such as Spotify, iTunes, Windows Media Player, QuickTime and VLC.

According to ABI Research, 600 million smartphones will be shipped with vision-based gesture recognition features by 2017. Further, companies like Qualcomm (QCOM - Free Report) are planning to offer smartphone OEMs with camera, infrared, and ultrasound based tracking, using gesture recognition technology. Thus, based on the growth opportunities present in the field, the collaboration will likely be positive for Intel.

Intel has a strong market position and technology lead and continues to show solid execution.

The company delivered decent first quarter 2013 results. The top-line numbers for the quarter were within the guidance range and slightly better than normal seasonality, while the bottom line missed the Zacks Consensus Estimate by a couple of cents.

Although the decline in PC demand will continue to affect Intel’s results in the near term, we believe this move will help diversify Intel's product line.

Intel shares carry a Zacks Rank #3 (Hold).

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