Home > Articles > Business & Management

  • Print
  • + Share This
This chapter is from the book

This chapter is from the book

Intel

In 1968, Andy Grove and Gordon Moore built a factory to manufacture chips for video game makers such as Atari. It was a good idea, and their company, Intel Corp., had promise—until the video game industry was overwhelmed by Nintendo, which preferred to buy chips made in Japan. Suddenly Intel had more chips than buyers. About that time, though, IBM began to develop the PC, for which it would need just the sort of microchips that Intel was producing in abundance. It was a match made in high-tech heaven. Intel quickly became the world's number-one chip maker, a position it has maintained ever since.

But technology, as we have seen, continues to develop. What happened to the mainframe, and what subsequently happened to the minicomputer, is now happening to the PC. Cell phones, handheld computers, and other gadgets are eroding the demand for PCs. Now it is Intel's turn to adjust to a changing marketplace. Let's take a quick look at how the company has been doing.

At the end of 2000, Intel announced that its two-year partnership with Analog Devices was about to yield fruit. The company was ready to bring to market a new chip—the high-performance digital signal processor (DSP) for use in "third-generation" wireless devices such as advanced cell phones and palm-size computers. The problem, though, as we saw with Digital, was that Intel was following, not leading, the market. Indispensable components of electronic gadgets like modems, CD players, and cell phones, DSPs had for some time been the fastest-growing segment of the microchip market.

Intel's job, then, was not only to produce the DSP, but also to oust the market leader, Texas Instruments. (It's worth noting that TI showed considerable prescience in making the leap to DSP. It could have continued to make PC chips, but, realizing that Intel had already won that battle, it looked over the horizon. There it saw the future in "best-access" gadgets like the then-emerging cell phone, and it concluded that the DSP was the direction to take.) For its part, Intel realized, correctly, that its PC chip business was tied to slowing growth in PC sales, but the realization came later rather than sooner. TI had already tied up a 60 percent share of the digital wireless phone business, and Mike McMahan, the company's head of R&D, told the Boston Globe that he was confident of their position in the market.12

Like Digital and IBM, Intel's story illustrates that when you're totally dominant in your chosen arena, it's hard to pay much attention to what's happening outside that arena. It's too easy, also, to ignore competition. If that was the case with the DSP in 2000, it happened to Intel again in 2003, when Advanced Micro Devices (AMD) beat Intel to the market with a product it called Opteron—a chip that offered advanced 64-bit computing power while retaining the ability to run thousands of 32-bit Windows-compatible programs. According to one account, Intel and others inside the industry scoffed at the new chip from AMD, but within a year its customer list included IBM, Sun Microsystems, and HP. Then Intel had to play catch-up again. In early 2004, the company announced that it would add 64-bit capacity to its 32-bit Xeon server chips.

The story's amusing twist is that, a decade earlier, Intel's then-CEO Andy Grove had derided AMD as "the Milli Vanilli of semiconductors," taunting the smaller company for mimicking Intel chip designs rather than creating its own processors from scratch. Fred Weber, AMD's chief technology officer, admitted to feeling "some emotional satisfaction" from seeing the tables turned. He credited AMD's success not to chance but to a five-to-seven-year strategy of "innovating in places where they were not."

Has Intel's dominant position also allowed it to take its customers for granted? An executive at Boxx Technologies, an AMD customer, points out that AMD keeps Intel honest and that competition is critical. "If you took AMD out of the picture," he says, "Intel would really slow down to maximize its return on investment." AMD's Weber puts it more forcefully: "Intel has an arrogance out of being a near monopolist.... Its respect for the customer is created by customers yelling at it."13

Whether Intel will be able to shed its perceived arrogance and complacency, stay abreast of its competitors, and respond to the evolving demands of the marketplace is a question now facing its newly appointed CEO, Paul Otellini, a company veteran who ascended through the marketing, rather than engineering, ranks. Will Otellini be able to reinvent Intel as Gerstner reinvented IBM and find a new direction for the company in the face of a largely saturated PC market? Based on his advocacy of the "right-hand turn"—a sharp break from the "cherished belief" that nothing matters more than ever-faster, more powerful computer chips—Otellini may be the right man for the job. He appears to be pushing the company toward the realization that, in addition to speed, customers now want things like built-in security features, wireless connectivity to the Internet, and better graphics and audio. With his marketing background, maybe he'll be able to shake up the company's elitist, high-tech engineering culture.

  • + Share This
  • 🔖 Save To Your Account

InformIT Promotional Mailings & Special Offers

I would like to receive exclusive offers and hear about products from InformIT and its family of brands. I can unsubscribe at any time.

Overview


Pearson Education, Inc., 221 River Street, Hoboken, New Jersey 07030, (Pearson) presents this site to provide information about products and services that can be purchased through this site.

This privacy notice provides an overview of our commitment to privacy and describes how we collect, protect, use and share personal information collected through this site. Please note that other Pearson websites and online products and services have their own separate privacy policies.

Collection and Use of Information


To conduct business and deliver products and services, Pearson collects and uses personal information in several ways in connection with this site, including:

Questions and Inquiries

For inquiries and questions, we collect the inquiry or question, together with name, contact details (email address, phone number and mailing address) and any other additional information voluntarily submitted to us through a Contact Us form or an email. We use this information to address the inquiry and respond to the question.

Online Store

For orders and purchases placed through our online store on this site, we collect order details, name, institution name and address (if applicable), email address, phone number, shipping and billing addresses, credit/debit card information, shipping options and any instructions. We use this information to complete transactions, fulfill orders, communicate with individuals placing orders or visiting the online store, and for related purposes.

Surveys

Pearson may offer opportunities to provide feedback or participate in surveys, including surveys evaluating Pearson products, services or sites. Participation is voluntary. Pearson collects information requested in the survey questions and uses the information to evaluate, support, maintain and improve products, services or sites, develop new products and services, conduct educational research and for other purposes specified in the survey.

Contests and Drawings

Occasionally, we may sponsor a contest or drawing. Participation is optional. Pearson collects name, contact information and other information specified on the entry form for the contest or drawing to conduct the contest or drawing. Pearson may collect additional personal information from the winners of a contest or drawing in order to award the prize and for tax reporting purposes, as required by law.

Newsletters

If you have elected to receive email newsletters or promotional mailings and special offers but want to unsubscribe, simply email information@informit.com.

Service Announcements

On rare occasions it is necessary to send out a strictly service related announcement. For instance, if our service is temporarily suspended for maintenance we might send users an email. Generally, users may not opt-out of these communications, though they can deactivate their account information. However, these communications are not promotional in nature.

Customer Service

We communicate with users on a regular basis to provide requested services and in regard to issues relating to their account we reply via email or phone in accordance with the users' wishes when a user submits their information through our Contact Us form.

Other Collection and Use of Information


Application and System Logs

Pearson automatically collects log data to help ensure the delivery, availability and security of this site. Log data may include technical information about how a user or visitor connected to this site, such as browser type, type of computer/device, operating system, internet service provider and IP address. We use this information for support purposes and to monitor the health of the site, identify problems, improve service, detect unauthorized access and fraudulent activity, prevent and respond to security incidents and appropriately scale computing resources.

Web Analytics

Pearson may use third party web trend analytical services, including Google Analytics, to collect visitor information, such as IP addresses, browser types, referring pages, pages visited and time spent on a particular site. While these analytical services collect and report information on an anonymous basis, they may use cookies to gather web trend information. The information gathered may enable Pearson (but not the third party web trend services) to link information with application and system log data. Pearson uses this information for system administration and to identify problems, improve service, detect unauthorized access and fraudulent activity, prevent and respond to security incidents, appropriately scale computing resources and otherwise support and deliver this site and its services.

Cookies and Related Technologies

This site uses cookies and similar technologies to personalize content, measure traffic patterns, control security, track use and access of information on this site, and provide interest-based messages and advertising. Users can manage and block the use of cookies through their browser. Disabling or blocking certain cookies may limit the functionality of this site.

Do Not Track

This site currently does not respond to Do Not Track signals.

Security


Pearson uses appropriate physical, administrative and technical security measures to protect personal information from unauthorized access, use and disclosure.

Children


This site is not directed to children under the age of 13.

Marketing


Pearson may send or direct marketing communications to users, provided that

  • Pearson will not use personal information collected or processed as a K-12 school service provider for the purpose of directed or targeted advertising.
  • Such marketing is consistent with applicable law and Pearson's legal obligations.
  • Pearson will not knowingly direct or send marketing communications to an individual who has expressed a preference not to receive marketing.
  • Where required by applicable law, express or implied consent to marketing exists and has not been withdrawn.

Pearson may provide personal information to a third party service provider on a restricted basis to provide marketing solely on behalf of Pearson or an affiliate or customer for whom Pearson is a service provider. Marketing preferences may be changed at any time.

Correcting/Updating Personal Information


If a user's personally identifiable information changes (such as your postal address or email address), we provide a way to correct or update that user's personal data provided to us. This can be done on the Account page. If a user no longer desires our service and desires to delete his or her account, please contact us at customer-service@informit.com and we will process the deletion of a user's account.

Choice/Opt-out


Users can always make an informed choice as to whether they should proceed with certain services offered by InformIT. If you choose to remove yourself from our mailing list(s) simply visit the following page and uncheck any communication you no longer want to receive: www.informit.com/u.aspx.

Sale of Personal Information


Pearson does not rent or sell personal information in exchange for any payment of money.

While Pearson does not sell personal information, as defined in Nevada law, Nevada residents may email a request for no sale of their personal information to NevadaDesignatedRequest@pearson.com.

Supplemental Privacy Statement for California Residents


California residents should read our Supplemental privacy statement for California residents in conjunction with this Privacy Notice. The Supplemental privacy statement for California residents explains Pearson's commitment to comply with California law and applies to personal information of California residents collected in connection with this site and the Services.

Sharing and Disclosure


Pearson may disclose personal information, as follows:

  • As required by law.
  • With the consent of the individual (or their parent, if the individual is a minor)
  • In response to a subpoena, court order or legal process, to the extent permitted or required by law
  • To protect the security and safety of individuals, data, assets and systems, consistent with applicable law
  • In connection the sale, joint venture or other transfer of some or all of its company or assets, subject to the provisions of this Privacy Notice
  • To investigate or address actual or suspected fraud or other illegal activities
  • To exercise its legal rights, including enforcement of the Terms of Use for this site or another contract
  • To affiliated Pearson companies and other companies and organizations who perform work for Pearson and are obligated to protect the privacy of personal information consistent with this Privacy Notice
  • To a school, organization, company or government agency, where Pearson collects or processes the personal information in a school setting or on behalf of such organization, company or government agency.

Links


This web site contains links to other sites. Please be aware that we are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of each and every web site that collects Personal Information. This privacy statement applies solely to information collected by this web site.

Requests and Contact


Please contact us about this Privacy Notice or if you have any requests or questions relating to the privacy of your personal information.

Changes to this Privacy Notice


We may revise this Privacy Notice through an updated posting. We will identify the effective date of the revision in the posting. Often, updates are made to provide greater clarity or to comply with changes in regulatory requirements. If the updates involve material changes to the collection, protection, use or disclosure of Personal Information, Pearson will provide notice of the change through a conspicuous notice on this site or other appropriate way. Continued use of the site after the effective date of a posted revision evidences acceptance. Please contact us if you have questions or concerns about the Privacy Notice or any objection to any revisions.

Last Update: November 17, 2020