Integrated circuit technology giant, Intel Corp. (NASDAQ: INTC – $30.84) said it bought Israel’s Replay Technologies, which developed a 3D video technology that has started to be used by U.S. professional sports broadcasters. Replay Technologies’ proprietary format uses high-resolution cameras and computer-intensive graphics to let viewers see and experience sporting events from any angle. Replay’s technology was used in the recent National Basketball Association All-Star Weekend, giving fans a 360-degree view of the slam dunk contest. Intel worked with Replay’s technology to create a 3D video rendering of the court using 28 ultra-high-definition cameras positioned around the arena and connected to Intel based servers. It was also used in this year’s Super Bowl. Intel has not disclosed the purchase price, but Israeli media said it was about $175 million. The acquisition is part of Intel’s recent push in the domain of augmented reality and virtual reality. It has acquired at least five companies specializing in such technologies and is currently working on an augmented-reality wearable headset. Augmented reality, sometimes called mixed reality, superimposes information or images on a view of the real world shown through glass or on the display of a device like a smartphone. In virtual reality, by contrast, users see only computer-generated scenes.
In order for Intel to mitigate the diminishing growth potential for its bread-and-butter PC business given the resounding popularity of tablets, smartphones and laptops, I believe acquisitions such as Replay are likely to remain a part of the company’s long-term growth strategy. Total return prospects to late decade are solid on a risk-adjusted basis for high-quality Intel and the shares are reasonably priced. A recent dividend increase, yielding investors 3.4%, sweetens the pot.