At the Intel Developer Forum this year, Intel’s newly hatched CEO, Brian Krzanich, attempted to breathe new life into the diplodocus he tends by warbling on about healthcare and tablets. He must realise, of course, that to somewhat mix metaphors, Chipzilla has missed the boat.
The writing was on the wall for Intel some years ago but because the company is such a giant, the tiny brain wasn’t getting messages from its extremities that it was slowly dying.
It is a climate change in the egosystem that will spell the end for Intel because, in the marketing babble of the present age, its business model is clearly “unsustainable”.
Intel could only continue to churn out new processes and chips as long as it had a virtual monopoly in the market. A new fab costs billions to produce and profit is predicated on the fact that it essentially controlled the market.
The giant appears to have missed the fact that handset manufacturers didn’t and don’t want to be locked into the same model as the PC industry. Now, anyone with a smartphone or tablet is toting around an extremely sophisticated computer and no-one in their right minds wants to spend thousands on a PC unless they’re forced to. As recent market research has shown, the days of PCs are pretty much numbered and, of course, like its evil twin Microsoft, Intel forgot about the mantra it used to chant, that mantra called convergence.
It will take a while for Intel to die because it is such a lumbering creature, but a model that requires billions to develop new processes simply based on PC sales just won’t work anymore. And if Intel thinks that tablets or smartphones will save its bacon, then it is living in cloud cuckoo land.
In some ways, we must lament the coming death of Chipzilla. It had some fine people working for it and its process technology was next to none. But greed and its virtual monopoly meant that it was viewing the world wearing blinkers and its own momentum and size prevented it from taking vital decisions.