Kodak and Polaroid failed not because of difficulty in technological transition or the speed of the change. Kodak did not fail because it missed the digital age; it invented the first digital camera. Kodak failed because their management saw digital photography as a threat to profitability by eliminating their lucrative film and photofinishing services, even after digital products were reshaping the market. Eventually, they realized the mistake and got into digital photography. However, their management kept making wrong decisions such as massive layoffs, to save the sinking ship, but it was too late. Does this resonate with Intel's approach in getting into mobile market, how it failed, and now the layoffs?
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https://en.wikipedia.org/wiki/Albert_J._Dunlap
First thing I thought of - Intel will go the way of Kodak, a long decline as each "new" strategy fails. Each iteration, the company gets smaller.
The threat to server chips isn't ARM - it's OpenPower. IBM's Power architecture is excellent - it just needs more power saving circuits added to lower the TDP.
-gzj so on target with DEC SUN waves.
ARM threat in server is almost gone leave alone it being a disruptor. Cloud/OEMs want IA-like server platforms and the business is here to stay in Intel's favor.
Agree with your analogy OP.
Also mobile aside, I think for Intel's total CPU business the analogy of either DEC or Sun Microsystems is appropriate, with disruption from a "barely good enough product" killing the market leader. In the 90s it was Intel as the disruptor and DEC/Sun as disrupted as an open SW ecosystem on a faster design cadence beat a more expensive, elegant more close ecosystem on a slower design cadence.
Now the next level of disruption is here and ARM is the disruptor and Intel the disrupted. ARM has an open SW AND HW ecosystem and fast design cadence beating Intel's more closed ecosystem (open SW, closed HW) and slowing cadence. The next few years with be interesting...
You are Amazon, Google, Facebook, MS or even Apple, you happy seeing Intel make 60+% GM charging you 1000 for a chip they make for a few bucks, or a few hundred bucks for a high end mobile or gaming chip. They often sell the same amount of silicon area on the same technology node 50-100x less into their Pentium line.
No I am sure Amazon, Google, FB, MS and even Apple think hard about what it takes to put ARM chips that cost 100x less into their server farms. Apple is likely the first that can convert as they already have ported their OS thrice ( moto 6800, to IBM PowerPC, to x86 ) today the work to flip their whole desktop and mobile to ARM is one CEO decision away. TSMC already makes all their leading edge silicon and probably for a lot less as look at TSMC margins what is it 30%, All these companies will noodle that maybe many times. Takes only one to move. Imagine if Amazon moves their cloud service to ARM based chips... Intel profit will plunge to lower than TSMC as you think they are as efficient as them?
Most people who go into management and stay in management are ones who cannot do technical. Let's face it, Intel technology changes as fast as they change the acronyms of the technology. If you are not good at technical, you quickly become atrophied. Managers know they are technically atrophied but they need the paycheck. That is why they reinforce their behaviors on other managers to justify their existence. I think managers should rotate back to individual contributor every three years.
I remember sitting in a BUM when the presenter spoke about "Cloud Services" and how Intel's fear was that "Cloud Services" would cannibalize their pc market if end users no longer needed PCs to access data. This was around 2009/10...too bad they didn't have the vision to embrace the cloud back then. Seems to me they are a day late and a dollar short.
Excellent parallel company failure. This is even a case study in the managerial ranks which they obviously chose to ignore.
Intel will be the next IBM or Nokia.
Absolutely. It is why Amazon is leader in cloud and not Intel. Intel, until today, believe the growth of Public cloud is a thread of server processors unit sales. They are late in the game now and is believing they can change the trend. They frown on public cloud and pushing strongly on private cloud - I.e. Individual company own their cloud instrastructure and buy more servers and pay high ASP on CPUs. Unfortunately, it is not likely to happen due to cost of maintenance.
The ship is sinking and it's a matter of just when it will hit the bottom.
Does this imply that we went all in on mobile with a 60% margin in mind?