Waymo will make money outside of just self-driving cars by selling its laser technology to other markets

waymo jaguar i-paceWaymo

  • Waymo will begin selling its lidar sensors to customers who don't compete with the company's autonomous ride-sharing services.
  • Waymo's lidar sensor - known as Laser Bear Honeycomb - uses lasers to build detailed 3D maps of nearby objects and can be used in applications outside of self-driving cars like warehouse robots, security systems, and autonomous tractors.
  • The decision to sell sensors is Waymo's second planned money-making channel outside of autonomous ride-sharing, which it hopes to launch in Arizona this year.

Alphabet's self-driving car company, Waymo, is expanding its business model.

On Tuesday, Waymo said it would begin selling its lidar sensors- honeycomb-looking devices that use lasers to created detailed 3D maps of the surrounding environment - to customers who don't compete with the company's autonomous ride-sharing services.

These alternative use cases could include warehouse robots, security systems, and autonomous tractors, though lidar applications outside of self-driving cars only account for a tenth of the market today, according to a Bloomberg report.

An industry expert cited in the report said the lidar sales are doubling annually and are set to be more than $1 billion by 2019.

LidarWaymo

Today, Waymo's lidar sensor - known as Laser Bear Honeycomb - is mounted to the front of the vehicles, and is one of the three sensors the company uses to help ensure a safe ride.

Waymo - which spun out of Alphabet's moonshot factory X in 2016 - has long had its sights on commercial applications, but autonomous ride-sharing services (think self-driving Ubers) have so far been its only clear, money-making channel. The company has already piloted its autonomous driving services in Arizona and hopes to launch there later this year.

Read more: The woman in charge of laying the groundwork for Waymo's self-driving taxis in cities across the US reveals why humility is key to the company's future

While Waymo has been developing lidar technology in-house for its self-driving cars for several years, the company's fleet of self-driving cars is still relatively small (Waymo has deals with major automakers to produce tens of thousands of cars using its tech, but in in May Waymo's fleet of self-driving cars consisted of just 600 minivans). Selling its lidar to other businesses could help Waymo increase economies of scale through greater production, eventually bringing down the price of making the expensive component for its own cars.

Already, Waymo is reportedly looking to set up multiple facilities across the US to support its manufacturing efforts for the new venture.

The lidar announcement is also the second this week for a company under the Alphabet umbrella looking to create a serious revenue stream. On Monday, Alphabet's security-focused subsidiary Chronicle released an enterprise cybersecurity product that competes directly with Splunk, which has a market cap of over $18 billion.

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