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Baidu to Help Deliver Groceries Through Apollo Powered Vans

Zacks Equity Research

Baidu, Inc. BIDU is leaving no stone unturned to bolster presence in the autonomous driving space through its open source driverless car platform, Apollo.

Reportedly, the autonomous vans powered by Baidu's Apollo platform will be used to deliver the groceries ordered from Walmart Inc. WMT stores at the doorsteps of customers.

As part of a pilot program, California-based autonomous vehicle startup Udelv will deploy autonomous vans backed by Apollo to deliver groceries for Walmart in Surprise, AZ.

Udelv currently provides grocery deliveries in Oklahoma City and the Bay Area city of San Mateo. The company aims to deliver up to 100 autonomous vans to customers this year.

The recent deal is aimed at speeding up the deployment of Apollo driverless car technology in the connected and autonomous vehicles.

Baidu’s shares have lost 35.6% compared with its industry‘s decline of 25.6% in the past one year.

Deal Rationale

This deal would create a win-win situation for both Baidu as well as Walmart in the autonomous driving space.

The deal will expand Baidu’s Apollo ecosystem in the United States. In addition, the agreement will help Baidu compete with its rival Alphabet's GOOGL Waymo, which already ferries customers to Walmart's stores for picking up pre-ordered groceries.

The company has been making continuous efforts to push its Apollo platform. This platform was launched to help it create a massive, overarching, safe and dependable group dedicated to effectively bring self-driving vehicle technology to the world.

Just last week at CES, the company unveiled Apollo 3.5, the latest version of Apollo open source driverless car platform. It can now perform in complex urban and suburban driving scenarios, and is compatible with sensors such as Velodyne VLS-128 LiDAR. Apollo has already attracted more than 130 global partners worldwide. As of now, Apollo is already used by Intel INTC, Nvidia, NXP, along with other 12,000 developers and partners worldwide.

On the contrary, Walmart is likely to get an edge over its main competitor Amazon, which has been introducing new delivery and pickup options to expand in the retail space.

In addition, the partnership will complement the expansion of Walmart’s e-commerce marketplace with the acquisitions of Jet.com and Flipkart, among others. Moreover, in the era wherein driverless cars are expected to hit public roads soon, Walmart’s strategy of testing out different technologies from Baidu and Alphabet's Waymo is praiseworthy.

Wrapping Up

The immense growth opportunities in this autonomous vehicle market are luring enough to attract other giants like Apple and Amazon, among others, which are also leaving no stone unturned to grab a piece of this market pie.

Undoubtedly, the autonomous driving space will witness more innovation over the next few years, both by technology companies and automakers, including smaller startups. According to Research & Markets data, the global software market for autonomous cars is anticipated to witness a CAGR of 76.1% between 2017 and 2021.

It’s not surprising that Baidu wants to make a bigger splash in the self-driving space and turn Apollo into a global initiative. The latest developments will surely speed up its efforts in this space.

Baidu, Inc. Price and Consensus

 

Baidu, Inc. Price and Consensus | Baidu, Inc. Quote

Zacks Rank

Baidu currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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