15 ms·

How Intel missed the smartphone market

292 points by JeremyMorgan 10y ago

markbnj 10y ago
Take any company that once rode atop a huge market and then suffered through declines as that market changed and you could filter back through the history of their decision making and say the exact same thing Gassee is saying here about Intel. So I'm not sure what point he is trying to make when he says their "culture ate 12,000 jobs." Does he mean their culture of focusing on the market they were currently very successful in, and their culture of not seeing huge paradigm shifts happening just under the surface of it? I suspect he just had a dull axe, and decided the time was finally ripe to sharpen it.
- tonyedgecombe 10y ago
  I'm not sure they even made the wrong decision, take a look at Kodak who were pioneers in early digital photography. You could argue that it was a distraction for them and they should have concentrated on milking film as long as possible.
  - lallysingh 10y ago
    No. Any shareholder would have wanted (in retrospect) Kodak to lead any technology that had the potential of killing their primary business.
    - Retric 10y ago
      The problem is when new tech is going to be a brutal slug fest like digital photography it's really hard for bloated companies to compete. Intel and Kodak both had decades of brand recognition, but that only goes so far when many competitors keep entering the market. Consider, Google paid 1 billion for YouTube, that's relatively speaking chump change. Microsoft could have just bought Nintendo vs Dumping 10's of billions on X-Box. Remember, buying means you get revenue from day one to offset that initial investment where R&D takes years and might not pay off. Of course you need to time this when the competitors are still affordable.
    - markbnj 10y ago
      It's really hard for huge companies to disrupt themselves. You need a strong visionary leader like Reed Hastings or Steve Jobs to make it happen. When the decision making power is distributed and consensus is the operative selection metric the chances of radical change become almost nonexistent.
      - smitherfield 10y ago
        Did Apple under Jobs ever really "disrupt themselves?" I suppose the iPhone disrupted the iPod business, and the iPad cannibalizes Macs somewhat, and the original Mac was a semi-successful attempt to supplant the Apple II, but all of those, while innovative, were fairly logical extensions of their existing product lines. The iPod and going from Apple-the-PC-company to Apple-the-gizmo-company could be considered one, but I think it's giving Jobs too much credit to claim he started development on an MP3 player because he knew in advance how wildly successful it and the products it spawned would be.
    - joezydeco 10y ago
      Kodak to Shareholder: We believe digital technology will be the future of photography and result in great profits, but it will take billions of R&D and probably a few decades to get there. Shareholder to Kodak: Screw that. We need to make earnings next quarter or I'm selling. Don't miss your earnings by even $0.01/share or you're toast.
    - mark-r 10y ago
      Kodak is the perfect example. They managed to collect for every single picture you took, between the film, processing, and printing. There's no revenue stream in digital that had the potential to replace it, so they were doomed from the start. They certainly did see it coming.
      - lallysingh 10y ago
        With that kind of money, they could've been investing in consumer storage (e.g., NAS and even flash for phones) and point & shoot digital camera components. With perfect hindsight, of course.
        ghaff 10y ago
        >they could've been investing in consumer storage Which has also been a razor-thin margin commodity business. Fujifilm does provide some insights into how Kodak could have moved forward but they struggled too and were a smaller company. The high-end camera makers have done OK in digital photography (although there's been churn in that space as well) but Kodak had long ceded that market to the Japanese by the time digital photography was much more than a glimmer. The print consumables market was also pretty good for a while but that ended up being relatively ephemeral. Even with the advantage of 20-20 hindsight, Kodak was in a tough position to directly leverage either their existing tech or their channels.
  - rm_-rf_slash 10y ago
    You shouldn't have been downvoted. That is exactly what happened. Kodak dominated film (especially motion picture film) then in the way Windows dominates desktop operating systems now. The profits were just too great and they thought digital was just a distraction.
  - protomyth 10y ago
    I would argue that Kodak was right to jump into digital photography, but made some really bad decisions about how we'd take pictures. Sony made the correct call by concentrating on the cellphone market with the experience from their pro offerings. Kodak got the digital leap but didn't quite get the form factor leap.
    - thrownaway2424 10y ago
      People also seem to forget that Kodak owned the entire digital still photography market for its first decade. They had a 1 megapixel sensor during the Reagan administration, for crying out loud.
      - protomyth 10y ago
        Amazing isn't it. I get the feeling a lot of people don't look beyond film. Too bad their management seemed to have Xerox disease.
elmar 10y ago
they just forgot that only the paranoid survive.
petra 10y ago
The main issue here is: Intel doesn't want to work on stuff with lower margin(even though it can make money and it's strategically valuable). That's common to many businesses. Isn't there any financial engineering trick to enable companies to solve this dillema that often leads to their death?
- lmm 10y ago
  Every innovation eventually becomes commoditized. So if you want to remain high-margin you have to continually innovate. (But to be fair to Intel they did, and do - they keep producing better and better CPUs. It's just that demand for that whole category has shifted)
  - pm90 10y ago
    Exactly. Intel invests ginormous amounts into R&D. If they had adopted ARM earlier, they could have captured the mobile market and .... then who knows what? Innovation is unpredictable, especially in tech. They started our making DRAM's then moved to making microprocessors...I wonder why they didn't realize they couldn't rely on the same business model forever.
    - Grishnakh 10y ago
      They did adopt ARM. Did you forget about StrongARM? (I believe they acquired it from their DEC acquisition.) They ran with that for a while, made an updated version called "XScale", made a bunch of mobile processors with it, and then sold it all off to Marvell when they decided to refocus and shed a lot of other things that weren't core to the business.
      - thrownaway2424 10y ago
        History is not the strong suit of this site's readers. Yes, Intel was selling ARM CPUs into the mobile market (Compaq IPAQ, Sharp Zaurus, etc) when Apple was still making pink iMacs.
    - 10y ago
samfisher83 10y ago
Lets look at QCT which I think is the biggest if not the biggest ARM company out there. http://marketrealist.com/2016/04/qualcomms-chipset-margin-higher-end-guidance/ http://marketrealist.com/2016/04/qualcomms-chipset-margin-hi... QCT’s operating margin fell from 16.9% in fiscal 1Q16 to 5% in fiscal 2Q16. The margin was on the higher end of the low- to mid-single-digit guidance as the ASP (average selling price) of 3G and 4G handsets equipped with Qualcomm chipsets rose by 6% YoY to $205–$211. The price rose due to a favorable product mix and higher content per device. The Margins on cell phone chips are terrible. QCT made 2.5 bil on 17bil in revenue. http://investor.qualcomm.com/secfiling.cfm?filingID=1234452-15-271&CIK=804328 http://investor.qualcomm.com/secfiling.cfm?filingID=1234452-... Would it really make sense to invest in Cellphone business when every dollar you put in gets you less ROI compared to what you have now. From a finance perspective it would make more sense to return it to the shareholders and let them invest in QCOM if they want to.
- santoshalper 10y ago
  The existing ARM fabrication market is very balkanized. Presumably if Intel had dived in with both feet, they would have been able to dominate it using their incredible aptitude for iterating process technology. There is certainly that third path though, where Intel embraced fabrication, then regretted it.
  - deleted 10y ago
    [deleted]
  - makomk 10y ago
    I'm not sure if Intel's process lead is what it once was. For the last year or so Samsung have been shipping phones that use their own 14nm FinFET process, very similar on paper to Intel's best. It's entirely possible that Samsung will actually beat Intel to 10nm.
    - CountSessine 10y ago
      A point that's been made is that Samsung's 14nm process isn't really equivalent to Intel's- many gate feature on Samsung's 14nm process are much larger than 14nm. Still, just the fact that anyone is in a race with Intel at all would have been unthinkable 10 years ago.
vtail 10y ago
Expect the same fate for many more tech companies. Although not many people realize, tech is a _mature_ sector of the U.S. economy now - it grows at about 3% a year, pretty much in line with GDP. But the perception is different - just ask your friends - and the reason for this is that there are highly visible _pockets of growth_, like Uber/SpaceX/name-your-favorite-unicorn, and people often extrapolate their growth to the rest of the industry. Now what happens with many tech companies is that they often have a product with exceptional margins and double-digit growth rate, and it makes sense to invest all the available resources into it - better from ROIC perspective - ignoring all the alternatives which either lack volume or high margin to look attractive. This inevitably leads to problems once your exceptional product stops growing, and you realize you have barely invested in anything else. Just much like Intel with x86 and ARM chips, or Qualcomm, or EMC, or RIM, ... - the list goes on and on. Even when you look at Google, most of their resources are invested into search/ad business, so when that's stops growing - or, rather, they got all the share from the TV and start growing at a GDP rate - they will be in the same boat. Edit: typos.
- PaulHoule 10y ago
  That's not entirely true. Intel has invested in plenty of things that haven't worked out, for instance, Itanic, Ultrabooks, Realsense, etc. Also companies like Intel and Microsoft have bought into the Clayton Christensen theory of "disruption" to the point where they really are throwing their existing customers under the bus. That is, Windows 8 was perceived as a tablet operating system, Intel only sells high-end chips under the Xeon brand, etc. Had Intel stuck more piggishly to making better PC's, we might have mainstream water-cooled desktops running at 5Ghz+ and more reasons for people to upgrade.
  - vtail 10y ago
    According to Wikipedia[1], Intel set aside "$300m over 3-4 years" to invest in Ultrabooks, so $100m/year. Contrast that to ~$8B they spend on R&D each year[2]. So it was a relatively small bet for them. I'm not saying tech companies never invest in anything outside of their core products. It's just often those projects are given low internal priority precisely because their (presumed) impact to the bottom line will be small. [1] https://en.m.wikipedia.org/wiki/Ultrabook https://en.m.wikipedia.org/wiki/Ultrabook [2] https://ycharts.com/companies/INTC/r_and_d_expense https://ycharts.com/companies/INTC/r_and_d_expense edit: typos
Mendenhall 10y ago
I found this quote to be one of particular interest. “I couldn’t see it. It wasn’t one of these things you can make up on volume. And in hindsight, the forecasted cost was wrong and the volume was 100x what anyone thought.” …and, perhaps more importantly: “The lesson I took away from that was, while we like to speak with data around here, so many times in my career I’ve ended up making decisions with my gut, and I should have followed my gut. My gut told me to say yes.” I personally love data,facts,hard science, but I find too often many can ignore gut feelings. I almost always follow my gut instinct, It has proven itself to me over and over again even while taking what is often perceived as long shots but somehow my gut tells me "you got this". In particular I would say gather your own data on how often or not your gut instinct is correct and use that as a data point in addition to the hard science, facts etc. Instinct evolved to keep you alive, it is often wise to not ignore it.
- adevine 10y ago
  I also thought this was a very important quote in today's world. Compare these two quotes: > The lesson I took away from that was, while we like to speak with data around here, so many times in my career I’ve ended up making decisions with my gut, and I should have followed my gut. My gut told me to say yes. vs. this famous quote from Jim Barksdale: > If we have data, let’s look at data. If all we have are opinions, let’s go with mine. Now that everyone is praying at the altar of big data, I find it important to keep both these quotes in mind. In my mind, it's not that the data is wrong, but too often I've seen attempts to interpret data it ways that can undercut long term planning and vision. For example, Steve Jobs had a famous saying about why Apple never put a ton of "xyz inside" stickers on the bottom of their laptop keyboards. It would have been easy to look at the data and say "Company pays us X million dollar to add this sticker, but only 0.001% of people decide not to buy us because of the sticker, so we should add the sticker." Judging the long term damage to your brand because you cover up your machines with crap is harder to put numbers to.
- lotsofpulp 10y ago
  Thinking that your gut makes more optimal decisions than a random process might just be feeding one's ego. https://en.wikipedia.org/wiki/Confirmation_bias https://en.wikipedia.org/wiki/Confirmation_bias
skynetv2 10y ago
Many are focussing on the 12,000 number. Many forget Intel has acquired a whole bunch of companies over the past few years including McAfee, Altera etc. Now mix in a change in strategy, you find yourself with a bunch of people you no longer need. Redundancy of services like HR, IT, test, design, management etc along with another class of engineers whose skill set you no longer need in your new direction. Organizations continue to evolve and change direction. I am not saying leadership has not failed spectacularly in mobile, but some of the 12,000 jobs are a natural progression of acquisitions.
- outside1234 10y ago
  If that's true though, then the failure is not making these changes on a constant basis (100s at a time) and instead saving it all up for a massive blowout.
  - skynetv2 10y ago
    no, not really. look at the timelines for Altera & McAfee acquisitions and how many employees & sites were added to Intel books. Pretty much last year. now add a change in strategy. better do it at once and move on.
- Grishnakh 10y ago
  >Many forget Intel has acquired a whole bunch of companies over the past few years including McAfee, They should just fire everyone from that acquisition and close down the whole division. It's nothing more than a huge stain on the rest of the company. It's really sad that the world's largest chipmaker reduced itself to being a malware purveyor.
  - MichaelGG 10y ago
    Don't know, but I'd assume Intel's McAfee idea was more for the enterprise market vs selling junk to consumers. At the enterprise level it's somewhat more defensible, plus it opens up paths to desktop management capabilities.
- 10y ago
jonstokes 10y ago
I hate this piece. I hate that in 2016, people still believe in Magical ARM ISA Performance Elves. I hate that this is like my sixth or seventh post-Ars comment on HN in as many years debunking the ARM Performance Elves theory. Back when the PPro was launched there was a low double-digits percentage of the die taken up with the x86 translation hardware (for turning x86 instructions into internal, RISC-like micro-ops). Now that number is some small fraction of a percent. It kills me that I still read this nonsense. The reason that Intel didn't get into cell phone chips is because margins were (and are) crap, and Intel is addicted to margins. The reason everyone else went ARM is because a) licenses are dirt cheap, and b) everyone knows that Intel is addicted to margins, and they know about all of Intel's dirty tricks and the way Intel leveraged Windows to keep its margins up in the PC space and screw other component vendors, so everyone has seen what happens when you tie yourself to x86 and was like "no thanks". Of course Intel didn't want to make ARM chips for Apple (or anyone else), because even if they had correctly forecast the volume they'd have no control over the margins because ARM gives them no leverage the way x86 does. If Intel decides it wants to make more money per chip and it starts trying to squeeze Apple, Apple can just bail and go to another ARM vendor. But if Apple went x86 in the iPhone, then Intel could start ratcheting up the unit cost per CPU and all of the other ICs in that phone would have to get cheaper (i.e. shrink their margins) for Apple to keep its own overall unit cost the same (either that or give up its own margin to Intel). Again, this is what Intel did with the PC and how they screwed Nvidia, ATI, etc. -- they just ask for a bigger share of the overall PC unit cost by jacking up their CPU price, and they get it because while you can always pit GPU vendors against each other to see who will take less money, you're stuck with Intel. (What about AMD? Hahaha... Intel would actually share some of that money back with you via a little kickback scheme called the "Intel Inside" program. So Intel gives up a little margin back to the PC vendor, but they still get to starve their competitors anyway while keeping AMD locked out. So the game was, "jack up the cost of the CPU, all the other PC components take a hit, and then share some of the loot back with the PC vendor in exchange for exclusivity.") Anyway, the mobile guys had seen this whole movie before, and weren't eager to see the sequel play out in the phone space. So, ARM it was. The only mystery to me was why Intel never just sucked it up and made a low-margin x86 chip to compete directly with ARM. I assure you there was no technical or ISA-related reason that this didn't happen, because as I said above that is flat-earth nonsense. More likely Intel didn't just didn't want to get into a low-margin business at all (Wall St. would clobber them, and low-margin x86 would cannibalize high-margin x86), and by the time it was clear that they had missed the smartphone boat ARM was so entrenched that there was no clear route to enough volume to make it worthwhile, again, especially given that any phone maker that Intel approaches with a x86 phone chip is going to run the other way because they don't want x86 lock-in.
Rezo 10y ago
If you don't cannibalize yourself, someone else will. Intentionally limiting Atom performance, selling of their ARM division, etc. was all done in order to not harm their main cash cow. By the time they woke up and really tried to push for x86 on Android it was too little too late. Just from an engineering perspective it was always going to be a monumental task. Because guess what, that small dev shop with the hit-of-the-month mobile game is not going to bother cross-compiling or testing on the 1% of non-ARM devices. And if "Ridiculous Fishing" or whatever doesn't work flawlessly, your device is broken from the consumer perspective. But what should really have Intel pissing their pants is the recent AMD x86 license deal with Chinese manufacturer's to pump out x86 server class chips. I'l love to hear if they're taking it seriously at all, or dismissing it as usual.
- BooneJS 10y ago
  Paul Otellini came up on the x86 marketing side. He fully believed that Intel Architecture was the ultimate, therefore everything else was no better than 2nd place. BK came up through the fabs, and therefore is more open to fabbing others' designs (Intel Custom Foundry) because it drives volume. However, he has overseen one hell of an awkward reduction in force (I'm ex-Intel, but still have many friends there). Small offices were told they were closing, and a few weeks later they were told where they should relocate to keep their jobs, and a few weeks later they might learn about the relocation package. It's almost as if they drew a line on a spreadsheet filled with numbers and now they're struggling to figure out how it affects the stuff they still want to keep. Odd.
  - AndyNemmity 10y ago
    I wish it was odd, if anything it sounds pretty normal when companies change top line strategy in a broad scale, and then have to spend the next year figuring out what the hell that even means, and how to do it.
    - r00fus 10y ago
      I think this is more symptomatic of larger, more conglomerated organizations. I doubt this would apply to say, Apple or Google which have, respectively, 95% & 50%+ of their revenues coming from one product line.
adekok 10y ago
Intel also bet big on Wimax. Which (mostly) ended up going nowhere. That was another multi-billion dollar mistake. And one which cost thousands of jobs at Intel.
protomyth 10y ago
I do wonder what would have happened if Intel had concentrated on being a custom chip maker. With a continuing of advancement in a low-powered x86 core and custom options, it would have been interesting. I guess when both game machine manufactures skip Intel to get AMD you really have to wonder where they thought things were going. A company so against customization that it closed its bus from third-parties probably isn't going to do well in a custom world.
oldmanjay 10y ago
I guess the point of the article is that this is a failure of some sort but it never really makes a strong enough case. The closest it comes is trying to make some sort of assertion that the executives at Intel should have been able to predict the future. If I were inclined to hate the company for some reason, I would find this emotionally satisfying, but I'm not, so I just find it to be a recap of things everyone already knew, expressed with an unjustified tone of smug finger-wagging
payne92 10y ago
I wonder if Intel saying "no" to Apple re: ARM will go down as the same scale decision as Digital Research saying "no" to IBM for an operating system.
known 10y ago
The analogy is https://en.wikipedia.org/wiki/Glass_ceiling https://en.wikipedia.org/wiki/Glass_ceiling
shmerl 10y ago
It is sad. Because in comparison with sickening ARM scene, Intel actually put effort into making open GPU drivers.
dhimes 10y ago
“The lesson I took away from that was, while we like to speak with data around here, so many times in my career I’ve ended up making decisions with my gut, and I should have followed my gut. My gut told me to say yes.” Killer, for us fans of rational strategy.
frik 10y ago
I was shocked the other day the Intel discontinued Intel Atom. So if one needs a cheap SoC board, there are now only ARM like Raspberry Pi, and no cheap ($50) x84/x64 compatible boards with Windows drivers. The Intel Atom 230 (1.6GHz dual core with HT) of 2008 was cheap ($50) and fast (Pentium M based). And on the high-end side there is still no 5GHz and there is little single-core improvement since 2004, since the Pentium 4 3GHz. We need more competition with x84/x64 to get lower prices and faster cores.
- thrownaway2424 10y ago
  What do you mean discontinued? What about the Atom that was just introduced earlier in 2016? e.g. http://www.newegg.com/Product/Product.aspx?Item=N82E16813138429&cm_re=j3060-_-13-138-429-_-Product http://www.newegg.com/Product/Product.aspx?Item=N82E16813138... ?
  - frik 10y ago
    It's not an Intel Atom, but a low spec low power Celeron. The J3060 has no hyperthreading and without the boost it's as slow as the Atom 330 (which has HT). So after 8 years, there is no Atom brand anymore, and the next best option is as slow as back then and costs about the same. http://www.cpu-world.com/Compare/979/Intel_Atom_330_vs_Intel_Celeron_J3060.html http://www.cpu-world.com/Compare/979/Intel_Atom_330_vs_Intel...
- nly 10y ago
  > on the high-end side there is still no 5GHz and there is little single-core improvement since 2004, since the Pentium 4 3GHz. This isn't true. There's easily a single thread win, clock-for-clock, of 2-3x over this period.
  - frik 10y ago
    Single core performance comparision: https://www.cpubenchmark.net/singleThread.html https://www.cpubenchmark.net/singleThread.html Intel Core i3-4370 @ 3.80GHz 2,215 pts Intel Pentium 4 @ 3.80GHz 822 pts But to make a fair comparison, one would have to throttle the memory to the speed of a 2004 memory chip. Then the CPU single core performance increase will be a lot less. Also the Pentium 4 architecture was a crossroad and Intel switched back to Pentium 3/M for Core. So a better comparision is the fastest Pentium M with a modern Core CPU. Intel Core i7-4760HQ @ 2.10GHz 1,922 pts Intel Pentium M @ 2.10GHz 660 pts Again, the memory speed increased a lot since then, so for a fair comparison, one would have to throttle the memory chip. The Atom 330 vs current gen Celeron (haven't found J3060, but his bigger brother J1900): Intel Celeron J1900 @ 1.99GHz 530 pts (10 W) Intel Celeron J3060 @ 1.60GHz ? pts ( 6 W) Intel Atom 330 @ 1.60GHz 251 pts ( 8 W) The performance increase of the cheapest Intel CPU hasn't increased that much since 2008, as I said.
draw_down 10y ago
This case is a real problem for the "data-driven thinking" set. Or rather, the problem with that idea is you have no way to tell which data you should be looking at. Just because you have numbers doesn't make them the right ones.
tracker1 10y ago
I'm not sure the "Just You Wait" is without merit, just taken longer than thought... I'm not sure why... given the transitions that have happened through process advancements the past 6 years or so, we now have CPUs that burst to higher speeds very transparently, and at really low power compared to a decade ago. While not suitable for phones, Intel is a pretty great choice for laptops and tablets (OS concerns aside). I do think that ChromeOS (or whatever it's called) offers a distinct difference to most users from what Windows is. That changes things up a lot. I feel that within 4 years, Intel will have some competative x86 offerings compared to ARM... On the flip side, by then, ARM will be competitive in the server/desktop space much more than today. It's kind of weird, but it will be another round of competition between different vendors all around. I'm not sure what other competitors will come around again. That's not even mentioning AMD's work at their hybrid CPUs... also, some more competition in the GPU space would be nice. It really reminds me of the mid-late 90's when you had half a dozen choices for server/workstation architectures to target. These days, thanks to Linux's dominance on the server, and flexibility and even MS's Windows refactoring, it's easy to target different platforms in higher-level languages. There will be some very interesting times in the next few years.
stephenmm 10y ago
They made several attempts (http://www.cnet.com/news/intel-sells-off-communications-chip-unit/ http://www.cnet.com/news/intel-sells-off-communications-chip...) but I think Intel has a huge cultural problem that does not allow for true innovation outside of core competencies. I worked for the Marvell group and while Intel did not know how to be nimble Marvell had there own issues which is in part (IMHO) why blackberry lost its leadership position. But the biggest problem with Intel is the culture as you are truly just a cog in the wheel there. Just my $.02
tmaly 10y ago
Intel has some amazing research. I was at an internal fair back in 1999 when I was doing an internship there in the Product Dev group that did the Itanium chipset. They has this handheld touch screen device that resembled a modern smart phone that was driven by voice recognition. This was 1999 way before the iphone came around. In my opinion, it is the internal politics and the leadership that has caused them to lose out. Chip design books in academia were already moving in the direction of low power designs during the late 90s. They just did not take any action.
- shas3 10y ago
  Just saying, working touch screens have been around on devices for 30 years or more. Most 'PDA's, including < $100 phonebooks had decent resistive touch screens as far back as the mid-90s. Also, as such, speech recognition too has been around for at least 25 years. What's new in today's smartphones is the cloud+deep learning driven high-accuracy. You could probably have easily found a handheld with touchscreen and speech recognition at Circuit City in 1999.
  - slapresta 10y ago
    Working touch screens are useless without usable touch UIs.
- pessimizer 10y ago
  The iPhone didn't represent any sort of technical advance. The only thing truly innovative about it was the (almost) all-screen form factor.
ricardobeat 10y ago
Why was the title editorialized by mods?
kazinator 10y ago
This goes back farther than 2005! At one point at the height of the bubble, Intel was involved in mobile devices. I worked for a company that developed secure, efficient wireless communication middleware for that space. Our client hardware was mainly Pocket PC and Windows CE at that time. We partnered with Intel to port our stack to the Linux device they were developing (codenamed "PAWS"). This was around 2000-2001, if I recall. Thing were going very well, when practically overnight, Intel decided to pull out of this market entirely. They shut down the project and that was that. It didn't bode very well for that little company; we gambled on this Intel partnership and put a lot of resource into that project in hopes that there would be revenue, of course. Oops!
crorella 10y ago
He just deleted the post :/
- smrtinsert 10y ago
  Why would he do that?
  - reiichiroh 10y ago
    ALL of his posts are gone from MondayNote now strangely.
    - erbo 10y ago
      And his entire Medium account is gone, too.
- sanowski 10y ago
  http://webcache.googleusercontent.com/search?q=cache:https://mondaynote.com/intel-culture-just-ate-12-000-jobs-305674fb1274 http://webcache.googleusercontent.com/search?q=cache:https:/...
sp332 10y ago
Looks like the article just got deleted? Here's a cache http://webcache.googleusercontent.com/search?strip=1&q=cache:https%3A%2F%2Fmondaynote.com%2Fintel-culture-just-ate-12-000-jobs-305674fb1274 http://webcache.googleusercontent.com/search?strip=1&q=cache... (It's not available in the Internet Archive because of robots.txt, which makes me wonder how Google justifies caching it but whatever)
- StringyBob 10y ago
  Deletion was accidental according to Jean-Louis Gassée (author) Twitter feed...
  - kyrra 10y ago
    link for context: https://twitter.com/gassee/status/732280308049936384 https://twitter.com/gassee/status/732280308049936384 > @sebbrochet @fdevillamil Embarrassing mistake, don’t know what to do other than grovel and hope Medium can undo.
    - fjarlq 10y ago
      Happy followup: https://twitter.com/gassee/status/732368830190620673 https://twitter.com/gassee/status/732368830190620673 > Big Thanks to @Medium. My fat fingers killed 9 yrs of Monday Notes this am. Awful feeling. They fixed it quickly. Much appreciated.
voiceclonr 10y ago
Intel's problems are long time coming. They lost track of real customer needs and have been operating in their own x86 centric world. It was always "let me build it first and then try to look for a good usage". I am ex-Intel and used to do software things. None of the leadership had a real sense of what customers really wanted and the h/w architects just built things that they are really good at. And they justified it in unnatural ways ("You know why you need such a fast processor ? You can run this flash game at 10K fps"). Things have been getting very efficient both on the client and the server side. With Cloud, they will have some momentum behind - but long term, I think the glory days are gone where they can just produce chips and someone would take it.
visarga 10y ago
... and also the GPU market.
chillingeffect 10y ago
FWIW, AMD also struck out HARD in the mobile market. When I interviewed there (just before release of iPhone 3G), I was jazzed about the "imminent" opportunity for mobile CPUs. I expected AMD to scale right down and into the phone, tablet and CPU market. We watched the world tumble around us as if on a ferry boat. When I voiced the words, "mobile CPU" to anyone there, people were oblivious and silent. The company was just out of touch, thinking everyone was going to keep buying tower PCs and laptops. It seemed the only variable they thought customers cared about was performance. People would buy AMD if it was just a little faster. They didn't realize it was simply the wrong product/market. Performance wasn't nearly as important, sigh.
- petecox 10y ago
  one manufacturer that did anticipate the 'death of desktop' was nVidia, as powering the "iPad killer", Pixel C.
albasha 10y ago
> The author deleted this Medium story
lquist 10y ago
A friend of mine at Intel told me that Intel doesn't care that much about not owning this market because the size of the profit pool around server chips is orders of magnitude greater and they have monopolistic control of that market.
- ryao 10y ago
  That is the same thing that the mainframe vendors said about minicomputers and the same thing that the minicomputer vendors said about microprocessing. Intel's failure to recognize itself as the next link in the cycle was a colossal mistake. They should have gone to Steve Jobs and offered to rectify their mistake the moment they realized how popular the iPhone was. Instead, they tried the Itanium strategy of promising things they could not deliver. What made them think that would work after the first failure?
udkl 10y ago
The post was deleted. Here is the google cache link for quick access : http://webcache.googleusercontent.com/search?q=cache:https://mondaynote.com/intel-culture-just-ate-12-000-jobs-305674fb1274 http://webcache.googleusercontent.com/search?q=cache:https:/... And here is the raw text(without any links) : http://pastebin.com/e10Yw0zi http://pastebin.com/e10Yw0zi
nkjoep 10y ago
Unable to read the story. Seems delete from medium.
EGreg 10y ago
The author deleted this Medium story.
cowardlydragon 10y ago
Article gone? Well, I'd guess fundamentally it was about tying yourself to the Microsoft sociopath mothership. Intel could have taken Linux by the reigns and made an OSX-equivalent and certainly windows-beating decades ago. But they didn't. So they missed the boat.
- klodolph 10y ago
  > Intel could have taken Linux by the reigns and made an OSX-equivalent and certainly windows-beating decades ago. I disagree. Hardware companies have a long history of trying and failing to make good software. It's not in their core business, so the company culture and talent pool isn't right. The same is true the other way around, just look at how rough Microsoft's entry into the console market was. On top of that, the "last mile" of usability between the current state of Linux and something that can realistically compete with Windows requires experienced UX designers and an infusion of design knowledge into the software engineering team. This isn't realistic for most companies. Just to be clear, not saying it would have been impossible, but I would bet against it.
  - cowardlydragon 10y ago
    I'd be really interested to know what the team size of the original OSX people was. Granted they were probably all NextSTEPpers that really knew the OSX core inside and out to begin with. But still, Apple at the time had 1/100 the resources of Microsoft and Intel. Intel could have bought BeOS after Apple passed. Think about that: BeOS with real backing.
bsder 10y ago
Intel didn't miss the smartphone market. It simply made no sense (and still makes no sense) to go after a less profitable market. When the margins on x86 cross below that of ARM chips, Intel will come in and destroy all the ARM manufacturers.
- duaneb 10y ago
  > When the margins on x86 cross below that of ARM chips, Intel will come in and destroy all the ARM manufacturers. Unless the world has moved on. Profitability happens over time, so even declaring a market unprofitable may shut you out for ever.
- wklauss 10y ago
  It did. Even Otellini said so: http://www.theatlantic.com/technology/archive/2013/05/paul-otellinis-intel-can-the-company-that-built-the-future-survive-it/275825/ http://www.theatlantic.com/technology/archive/2013/05/paul-o... And I'm not so sure they'll be able to go into ARM fabbing that easily. Margins of X86 are high, but they are selling less of them, so expanding to new market would have been a wise move. To their credit, they tried twice and couldn't make it work. Not sure if things could have been different considering ARM is a licensable architecture other people can use.
- stdgy 10y ago
  x86 was already on lock down. They could have ridden into the ARM ecosystem, guns blazing, and wouldn't have lost a penny from their existing x86 platform. ARM doesn't compete against x86 in mobile. That's obvious now, but it (apparently) wasn't obvious at the time. Intel turned down a boat load of free money.
brisance 10y ago
Article is back up. He accidentally deleted his 9 years' worth of posts. https://twitter.com/gassee/status/732368830190620673 https://twitter.com/gassee/status/732368830190620673
hoi 10y ago
The mobile space was aready hotting up. Nokia, alone in 2005 was already selling over 250M devices at around 35-40% market share. They were already using ARM chips. Forecast for smartphones was already high, since the whole mobile industry was posiioning itself to upgrade. It was always a question of getting the telcos to improve their 2G networks to 3G before the smartphone explosion was expected. Intel should have known this.
dredmorbius 10y ago
Article error: "In 1985, fresh from moving the Macintosh to the x86 processor family, Steve Jobs asked Intel to fabricate the processor that would inspirit the future iPhone. The catch: This wouldn’t be an Intel design, but a smaller, less expensive variant of the emerging ARM architecture, with the moderate power appetite required for a phone." That should be 2005.
mastazi 10y ago
OT but somehow related: The article contains the sentence "Jobs asked Intel to fabricate the processor" and "Intel styled itself as a designer of microprocessors, not mere fabricator". Question: according to your own experience, is it common in English to use "fabricate" and "fabricator" as synonyms of "manufacture" and "maker"? I am much more familiar with the negative meaning (e.g. "fabricated lies") but since I'm not a native speaker my vocabulary might be limited.
- dragonwriter 10y ago
  Specifically in the case of chips, "fabricate" seems to be fairly common.
blhack 10y ago
...what? Intel didn't miss anything, they sell the hardware that powers the infrastructure behind these new, always-connected devices.
- shortsightedsid 10y ago
  They were in that even before smartphones were the norm. Considering that they had to compete a lot more in the server space (SPARC comes to mind) and then won that market doesn't mean they won the smartphone market. AFAIK, Paul Otellini also made the same argument about servers however, the point is really about processors that run inside consumer products and not server infrastructure. Intel Inside just isn't the case.
Agathos 10y ago
Hey, it's the BeOS guy!
inlined 10y ago
I'd love help understanding how Intel's failure in the smartphone market didn't also doom the IoT market. The x86 chips never took off because they were expensive and took too much energy. If IoT is to be ubiquitous, those barriers seem even more important. Intel's comment about IoT makes me wonder: do they think they just lost the first mover advantage for mobile & the industry got hooked on ARM ISAs? Do they still believe the story that their chips will become cheaper and more powerful than ARM if they change nothing?
- makomk 10y ago
  I reckon it already has doomed Intel in the IoT market, investors just haven't realized it yet. Their answer to the IoT involved buggy shrunk-down 486s with poor performance and power consumption and very limited onboard peripherals compared to their ARM competitors. (I can't even find power consumption or instruction set information for the newest ones, which is worrying.) They've put a lot of money into high-profile publicity stunts like an Intel-funded TV series ("America's Greatest Makers"), BMX bikers, Arduino boards, etc but apparently if anyone wants to integrate their chips into the kind of IoT product they're being promoted for, they can't actually get them unless they're a big-name brand. They mostly seem to be relying on the press regurgitating their PR and not looking into the details.
darklajid 10y ago
Time to get out my Maemo (RIP Nokia) and Meego (too bad, Intel) merchandise and go cry in a corner. Maemo/Meego WebOS Firefox OS All of these were interesting, all failed. I'm still convinced that there's a market for a non Android/iOS solution.

292 points by JeremyMorgan 10y ago

Take any company that once rode atop a huge market and then suffered through declines as that market changed and you could filter back through the history of their decision making and say the exact same thing Gassee is saying here about Intel. So I'm not sure what point he is trying to make when he says their "culture ate 12,000 jobs." Does he mean their culture of focusing on the market they were currently very successful in, and their culture of not seeing huge paradigm shifts happening just under the surface of it? I suspect he just had a dull axe, and decided the time was finally ripe to sharpen it.

tonyedgecombe 10y ago
I'm not sure they even made the wrong decision, take a look at Kodak who were pioneers in early digital photography. You could argue that it was a distraction for them and they should have concentrated on milking film as long as possible.
- lallysingh 10y ago
  No. Any shareholder would have wanted (in retrospect) Kodak to lead any technology that had the potential of killing their primary business.
  - Retric 10y ago
    The problem is when new tech is going to be a brutal slug fest like digital photography it's really hard for bloated companies to compete. Intel and Kodak both had decades of brand recognition, but that only goes so far when many competitors keep entering the market. Consider, Google paid 1 billion for YouTube, that's relatively speaking chump change. Microsoft could have just bought Nintendo vs Dumping 10's of billions on X-Box. Remember, buying means you get revenue from day one to offset that initial investment where R&D takes years and might not pay off. Of course you need to time this when the competitors are still affordable.
  - markbnj 10y ago
    It's really hard for huge companies to disrupt themselves. You need a strong visionary leader like Reed Hastings or Steve Jobs to make it happen. When the decision making power is distributed and consensus is the operative selection metric the chances of radical change become almost nonexistent.
    - smitherfield 10y ago
      Did Apple under Jobs ever really "disrupt themselves?" I suppose the iPhone disrupted the iPod business, and the iPad cannibalizes Macs somewhat, and the original Mac was a semi-successful attempt to supplant the Apple II, but all of those, while innovative, were fairly logical extensions of their existing product lines. The iPod and going from Apple-the-PC-company to Apple-the-gizmo-company could be considered one, but I think it's giving Jobs too much credit to claim he started development on an MP3 player because he knew in advance how wildly successful it and the products it spawned would be.
  - joezydeco 10y ago
    Kodak to Shareholder: We believe digital technology will be the future of photography and result in great profits, but it will take billions of R&D and probably a few decades to get there. Shareholder to Kodak: Screw that. We need to make earnings next quarter or I'm selling. Don't miss your earnings by even $0.01/share or you're toast.
  - mark-r 10y ago
    Kodak is the perfect example. They managed to collect for every single picture you took, between the film, processing, and printing. There's no revenue stream in digital that had the potential to replace it, so they were doomed from the start. They certainly did see it coming.
    - lallysingh 10y ago
      With that kind of money, they could've been investing in consumer storage (e.g., NAS and even flash for phones) and point & shoot digital camera components. With perfect hindsight, of course.
      - ghaff 10y ago
        >they could've been investing in consumer storage Which has also been a razor-thin margin commodity business. Fujifilm does provide some insights into how Kodak could have moved forward but they struggled too and were a smaller company. The high-end camera makers have done OK in digital photography (although there's been churn in that space as well) but Kodak had long ceded that market to the Japanese by the time digital photography was much more than a glimmer. The print consumables market was also pretty good for a while but that ended up being relatively ephemeral. Even with the advantage of 20-20 hindsight, Kodak was in a tough position to directly leverage either their existing tech or their channels.
- rm_-rf_slash 10y ago
  You shouldn't have been downvoted. That is exactly what happened. Kodak dominated film (especially motion picture film) then in the way Windows dominates desktop operating systems now. The profits were just too great and they thought digital was just a distraction.
- protomyth 10y ago
  I would argue that Kodak was right to jump into digital photography, but made some really bad decisions about how we'd take pictures. Sony made the correct call by concentrating on the cellphone market with the experience from their pro offerings. Kodak got the digital leap but didn't quite get the form factor leap.
  - thrownaway2424 10y ago
    People also seem to forget that Kodak owned the entire digital still photography market for its first decade. They had a 1 megapixel sensor during the Reagan administration, for crying out loud.
    - protomyth 10y ago
      Amazing isn't it. I get the feeling a lot of people don't look beyond film. Too bad their management seemed to have Xerox disease.

elmar 10y ago

they just forgot that only the paranoid survive.

petra 10y ago

The main issue here is: Intel doesn't want to work on stuff with lower margin(even though it can make money and it's strategically valuable). That's common to many businesses. Isn't there any financial engineering trick to enable companies to solve this dillema that often leads to their death?

lmm 10y ago
Every innovation eventually becomes commoditized. So if you want to remain high-margin you have to continually innovate. (But to be fair to Intel they did, and do - they keep producing better and better CPUs. It's just that demand for that whole category has shifted)
- pm90 10y ago
  Exactly. Intel invests ginormous amounts into R&D. If they had adopted ARM earlier, they could have captured the mobile market and .... then who knows what? Innovation is unpredictable, especially in tech. They started our making DRAM's then moved to making microprocessors...I wonder why they didn't realize they couldn't rely on the same business model forever.
  - Grishnakh 10y ago
    They did adopt ARM. Did you forget about StrongARM? (I believe they acquired it from their DEC acquisition.) They ran with that for a while, made an updated version called "XScale", made a bunch of mobile processors with it, and then sold it all off to Marvell when they decided to refocus and shed a lot of other things that weren't core to the business.
    - thrownaway2424 10y ago
      History is not the strong suit of this site's readers. Yes, Intel was selling ARM CPUs into the mobile market (Compaq IPAQ, Sharp Zaurus, etc) when Apple was still making pink iMacs.
  - 10y ago

samfisher83 10y ago

Lets look at QCT which I think is the biggest if not the biggest ARM company out there. http://marketrealist.com/2016/04/qualcomms-chipset-margin-higher-end-guidance/ http://marketrealist.com/2016/04/qualcomms-chipset-margin-hi... QCT’s operating margin fell from 16.9% in fiscal 1Q16 to 5% in fiscal 2Q16. The margin was on the higher end of the low- to mid-single-digit guidance as the ASP (average selling price) of 3G and 4G handsets equipped with Qualcomm chipsets rose by 6% YoY to $205–$211. The price rose due to a favorable product mix and higher content per device. The Margins on cell phone chips are terrible. QCT made 2.5 bil on 17bil in revenue. http://investor.qualcomm.com/secfiling.cfm?filingID=1234452-15-271&CIK=804328 http://investor.qualcomm.com/secfiling.cfm?filingID=1234452-... Would it really make sense to invest in Cellphone business when every dollar you put in gets you less ROI compared to what you have now. From a finance perspective it would make more sense to return it to the shareholders and let them invest in QCOM if they want to.

santoshalper 10y ago
The existing ARM fabrication market is very balkanized. Presumably if Intel had dived in with both feet, they would have been able to dominate it using their incredible aptitude for iterating process technology. There is certainly that third path though, where Intel embraced fabrication, then regretted it.
- deleted 10y ago
  [deleted]
- makomk 10y ago
  I'm not sure if Intel's process lead is what it once was. For the last year or so Samsung have been shipping phones that use their own 14nm FinFET process, very similar on paper to Intel's best. It's entirely possible that Samsung will actually beat Intel to 10nm.
  - CountSessine 10y ago
    A point that's been made is that Samsung's 14nm process isn't really equivalent to Intel's- many gate feature on Samsung's 14nm process are much larger than 14nm. Still, just the fact that anyone is in a race with Intel at all would have been unthinkable 10 years ago.

vtail 10y ago

Expect the same fate for many more tech companies. Although not many people realize, tech is a _mature_ sector of the U.S. economy now - it grows at about 3% a year, pretty much in line with GDP. But the perception is different - just ask your friends - and the reason for this is that there are highly visible _pockets of growth_, like Uber/SpaceX/name-your-favorite-unicorn, and people often extrapolate their growth to the rest of the industry. Now what happens with many tech companies is that they often have a product with exceptional margins and double-digit growth rate, and it makes sense to invest all the available resources into it - better from ROIC perspective - ignoring all the alternatives which either lack volume or high margin to look attractive. This inevitably leads to problems once your exceptional product stops growing, and you realize you have barely invested in anything else. Just much like Intel with x86 and ARM chips, or Qualcomm, or EMC, or RIM, ... - the list goes on and on. Even when you look at Google, most of their resources are invested into search/ad business, so when that's stops growing - or, rather, they got all the share from the TV and start growing at a GDP rate - they will be in the same boat. Edit: typos.

PaulHoule 10y ago
That's not entirely true. Intel has invested in plenty of things that haven't worked out, for instance, Itanic, Ultrabooks, Realsense, etc. Also companies like Intel and Microsoft have bought into the Clayton Christensen theory of "disruption" to the point where they really are throwing their existing customers under the bus. That is, Windows 8 was perceived as a tablet operating system, Intel only sells high-end chips under the Xeon brand, etc. Had Intel stuck more piggishly to making better PC's, we might have mainstream water-cooled desktops running at 5Ghz+ and more reasons for people to upgrade.
- vtail 10y ago
  According to Wikipedia[1], Intel set aside "$300m over 3-4 years" to invest in Ultrabooks, so $100m/year. Contrast that to ~$8B they spend on R&D each year[2]. So it was a relatively small bet for them. I'm not saying tech companies never invest in anything outside of their core products. It's just often those projects are given low internal priority precisely because their (presumed) impact to the bottom line will be small. [1] https://en.m.wikipedia.org/wiki/Ultrabook https://en.m.wikipedia.org/wiki/Ultrabook [2] https://ycharts.com/companies/INTC/r_and_d_expense https://ycharts.com/companies/INTC/r_and_d_expense edit: typos

Mendenhall 10y ago

I found this quote to be one of particular interest. “I couldn’t see it. It wasn’t one of these things you can make up on volume. And in hindsight, the forecasted cost was wrong and the volume was 100x what anyone thought.” …and, perhaps more importantly: “The lesson I took away from that was, while we like to speak with data around here, so many times in my career I’ve ended up making decisions with my gut, and I should have followed my gut. My gut told me to say yes.” I personally love data,facts,hard science, but I find too often many can ignore gut feelings. I almost always follow my gut instinct, It has proven itself to me over and over again even while taking what is often perceived as long shots but somehow my gut tells me "you got this". In particular I would say gather your own data on how often or not your gut instinct is correct and use that as a data point in addition to the hard science, facts etc. Instinct evolved to keep you alive, it is often wise to not ignore it.

adevine 10y ago
I also thought this was a very important quote in today's world. Compare these two quotes: > The lesson I took away from that was, while we like to speak with data around here, so many times in my career I’ve ended up making decisions with my gut, and I should have followed my gut. My gut told me to say yes. vs. this famous quote from Jim Barksdale: > If we have data, let’s look at data. If all we have are opinions, let’s go with mine. Now that everyone is praying at the altar of big data, I find it important to keep both these quotes in mind. In my mind, it's not that the data is wrong, but too often I've seen attempts to interpret data it ways that can undercut long term planning and vision. For example, Steve Jobs had a famous saying about why Apple never put a ton of "xyz inside" stickers on the bottom of their laptop keyboards. It would have been easy to look at the data and say "Company pays us X million dollar to add this sticker, but only 0.001% of people decide not to buy us because of the sticker, so we should add the sticker." Judging the long term damage to your brand because you cover up your machines with crap is harder to put numbers to.
lotsofpulp 10y ago
Thinking that your gut makes more optimal decisions than a random process might just be feeding one's ego. https://en.wikipedia.org/wiki/Confirmation_bias https://en.wikipedia.org/wiki/Confirmation_bias

skynetv2 10y ago

Many are focussing on the 12,000 number. Many forget Intel has acquired a whole bunch of companies over the past few years including McAfee, Altera etc. Now mix in a change in strategy, you find yourself with a bunch of people you no longer need. Redundancy of services like HR, IT, test, design, management etc along with another class of engineers whose skill set you no longer need in your new direction. Organizations continue to evolve and change direction. I am not saying leadership has not failed spectacularly in mobile, but some of the 12,000 jobs are a natural progression of acquisitions.

outside1234 10y ago
If that's true though, then the failure is not making these changes on a constant basis (100s at a time) and instead saving it all up for a massive blowout.
- skynetv2 10y ago
  no, not really. look at the timelines for Altera & McAfee acquisitions and how many employees & sites were added to Intel books. Pretty much last year. now add a change in strategy. better do it at once and move on.
Grishnakh 10y ago
>Many forget Intel has acquired a whole bunch of companies over the past few years including McAfee, They should just fire everyone from that acquisition and close down the whole division. It's nothing more than a huge stain on the rest of the company. It's really sad that the world's largest chipmaker reduced itself to being a malware purveyor.
- MichaelGG 10y ago
  Don't know, but I'd assume Intel's McAfee idea was more for the enterprise market vs selling junk to consumers. At the enterprise level it's somewhat more defensible, plus it opens up paths to desktop management capabilities.
10y ago

jonstokes 10y ago

I hate this piece. I hate that in 2016, people still believe in Magical ARM ISA Performance Elves. I hate that this is like my sixth or seventh post-Ars comment on HN in as many years debunking the ARM Performance Elves theory. Back when the PPro was launched there was a low double-digits percentage of the die taken up with the x86 translation hardware (for turning x86 instructions into internal, RISC-like micro-ops). Now that number is some small fraction of a percent. It kills me that I still read this nonsense. The reason that Intel didn't get into cell phone chips is because margins were (and are) crap, and Intel is addicted to margins. The reason everyone else went ARM is because a) licenses are dirt cheap, and b) everyone knows that Intel is addicted to margins, and they know about all of Intel's dirty tricks and the way Intel leveraged Windows to keep its margins up in the PC space and screw other component vendors, so everyone has seen what happens when you tie yourself to x86 and was like "no thanks". Of course Intel didn't want to make ARM chips for Apple (or anyone else), because even if they had correctly forecast the volume they'd have no control over the margins because ARM gives them no leverage the way x86 does. If Intel decides it wants to make more money per chip and it starts trying to squeeze Apple, Apple can just bail and go to another ARM vendor. But if Apple went x86 in the iPhone, then Intel could start ratcheting up the unit cost per CPU and all of the other ICs in that phone would have to get cheaper (i.e. shrink their margins) for Apple to keep its own overall unit cost the same (either that or give up its own margin to Intel). Again, this is what Intel did with the PC and how they screwed Nvidia, ATI, etc. -- they just ask for a bigger share of the overall PC unit cost by jacking up their CPU price, and they get it because while you can always pit GPU vendors against each other to see who will take less money, you're stuck with Intel. (What about AMD? Hahaha... Intel would actually share some of that money back with you via a little kickback scheme called the "Intel Inside" program. So Intel gives up a little margin back to the PC vendor, but they still get to starve their competitors anyway while keeping AMD locked out. So the game was, "jack up the cost of the CPU, all the other PC components take a hit, and then share some of the loot back with the PC vendor in exchange for exclusivity.") Anyway, the mobile guys had seen this whole movie before, and weren't eager to see the sequel play out in the phone space. So, ARM it was. The only mystery to me was why Intel never just sucked it up and made a low-margin x86 chip to compete directly with ARM. I assure you there was no technical or ISA-related reason that this didn't happen, because as I said above that is flat-earth nonsense. More likely Intel didn't just didn't want to get into a low-margin business at all (Wall St. would clobber them, and low-margin x86 would cannibalize high-margin x86), and by the time it was clear that they had missed the smartphone boat ARM was so entrenched that there was no clear route to enough volume to make it worthwhile, again, especially given that any phone maker that Intel approaches with a x86 phone chip is going to run the other way because they don't want x86 lock-in.

Rezo 10y ago

If you don't cannibalize yourself, someone else will. Intentionally limiting Atom performance, selling of their ARM division, etc. was all done in order to not harm their main cash cow. By the time they woke up and really tried to push for x86 on Android it was too little too late. Just from an engineering perspective it was always going to be a monumental task. Because guess what, that small dev shop with the hit-of-the-month mobile game is not going to bother cross-compiling or testing on the 1% of non-ARM devices. And if "Ridiculous Fishing" or whatever doesn't work flawlessly, your device is broken from the consumer perspective. But what should really have Intel pissing their pants is the recent AMD x86 license deal with Chinese manufacturer's to pump out x86 server class chips. I'l love to hear if they're taking it seriously at all, or dismissing it as usual.

BooneJS 10y ago
Paul Otellini came up on the x86 marketing side. He fully believed that Intel Architecture was the ultimate, therefore everything else was no better than 2nd place. BK came up through the fabs, and therefore is more open to fabbing others' designs (Intel Custom Foundry) because it drives volume. However, he has overseen one hell of an awkward reduction in force (I'm ex-Intel, but still have many friends there). Small offices were told they were closing, and a few weeks later they were told where they should relocate to keep their jobs, and a few weeks later they might learn about the relocation package. It's almost as if they drew a line on a spreadsheet filled with numbers and now they're struggling to figure out how it affects the stuff they still want to keep. Odd.
- AndyNemmity 10y ago
  I wish it was odd, if anything it sounds pretty normal when companies change top line strategy in a broad scale, and then have to spend the next year figuring out what the hell that even means, and how to do it.
  - r00fus 10y ago
    I think this is more symptomatic of larger, more conglomerated organizations. I doubt this would apply to say, Apple or Google which have, respectively, 95% & 50%+ of their revenues coming from one product line.

adekok 10y ago

Intel also bet big on Wimax. Which (mostly) ended up going nowhere. That was another multi-billion dollar mistake. And one which cost thousands of jobs at Intel.

protomyth 10y ago

I do wonder what would have happened if Intel had concentrated on being a custom chip maker. With a continuing of advancement in a low-powered x86 core and custom options, it would have been interesting. I guess when both game machine manufactures skip Intel to get AMD you really have to wonder where they thought things were going. A company so against customization that it closed its bus from third-parties probably isn't going to do well in a custom world.

oldmanjay 10y ago

I guess the point of the article is that this is a failure of some sort but it never really makes a strong enough case. The closest it comes is trying to make some sort of assertion that the executives at Intel should have been able to predict the future. If I were inclined to hate the company for some reason, I would find this emotionally satisfying, but I'm not, so I just find it to be a recap of things everyone already knew, expressed with an unjustified tone of smug finger-wagging

payne92 10y ago

I wonder if Intel saying "no" to Apple re: ARM will go down as the same scale decision as Digital Research saying "no" to IBM for an operating system.

known 10y ago

The analogy is https://en.wikipedia.org/wiki/Glass_ceiling https://en.wikipedia.org/wiki/Glass_ceiling

shmerl 10y ago

It is sad. Because in comparison with sickening ARM scene, Intel actually put effort into making open GPU drivers.

dhimes 10y ago

“The lesson I took away from that was, while we like to speak with data around here, so many times in my career I’ve ended up making decisions with my gut, and I should have followed my gut. My gut told me to say yes.” Killer, for us fans of rational strategy.

frik 10y ago

I was shocked the other day the Intel discontinued Intel Atom. So if one needs a cheap SoC board, there are now only ARM like Raspberry Pi, and no cheap ($50) x84/x64 compatible boards with Windows drivers. The Intel Atom 230 (1.6GHz dual core with HT) of 2008 was cheap ($50) and fast (Pentium M based). And on the high-end side there is still no 5GHz and there is little single-core improvement since 2004, since the Pentium 4 3GHz. We need more competition with x84/x64 to get lower prices and faster cores.

thrownaway2424 10y ago
What do you mean discontinued? What about the Atom that was just introduced earlier in 2016? e.g. http://www.newegg.com/Product/Product.aspx?Item=N82E16813138429&cm_re=j3060-_-13-138-429-_-Product http://www.newegg.com/Product/Product.aspx?Item=N82E16813138... ?
- frik 10y ago
  It's not an Intel Atom, but a low spec low power Celeron. The J3060 has no hyperthreading and without the boost it's as slow as the Atom 330 (which has HT). So after 8 years, there is no Atom brand anymore, and the next best option is as slow as back then and costs about the same. http://www.cpu-world.com/Compare/979/Intel_Atom_330_vs_Intel_Celeron_J3060.html http://www.cpu-world.com/Compare/979/Intel_Atom_330_vs_Intel...
nly 10y ago
> on the high-end side there is still no 5GHz and there is little single-core improvement since 2004, since the Pentium 4 3GHz. This isn't true. There's easily a single thread win, clock-for-clock, of 2-3x over this period.
- frik 10y ago
  Single core performance comparision: https://www.cpubenchmark.net/singleThread.html https://www.cpubenchmark.net/singleThread.html Intel Core i3-4370 @ 3.80GHz 2,215 pts Intel Pentium 4 @ 3.80GHz 822 pts But to make a fair comparison, one would have to throttle the memory to the speed of a 2004 memory chip. Then the CPU single core performance increase will be a lot less. Also the Pentium 4 architecture was a crossroad and Intel switched back to Pentium 3/M for Core. So a better comparision is the fastest Pentium M with a modern Core CPU. Intel Core i7-4760HQ @ 2.10GHz 1,922 pts Intel Pentium M @ 2.10GHz 660 pts Again, the memory speed increased a lot since then, so for a fair comparison, one would have to throttle the memory chip. The Atom 330 vs current gen Celeron (haven't found J3060, but his bigger brother J1900): Intel Celeron J1900 @ 1.99GHz 530 pts (10 W) Intel Celeron J3060 @ 1.60GHz ? pts ( 6 W) Intel Atom 330 @ 1.60GHz 251 pts ( 8 W) The performance increase of the cheapest Intel CPU hasn't increased that much since 2008, as I said.

draw_down 10y ago

This case is a real problem for the "data-driven thinking" set. Or rather, the problem with that idea is you have no way to tell which data you should be looking at. Just because you have numbers doesn't make them the right ones.

tracker1 10y ago

I'm not sure the "Just You Wait" is without merit, just taken longer than thought... I'm not sure why... given the transitions that have happened through process advancements the past 6 years or so, we now have CPUs that burst to higher speeds very transparently, and at really low power compared to a decade ago. While not suitable for phones, Intel is a pretty great choice for laptops and tablets (OS concerns aside). I do think that ChromeOS (or whatever it's called) offers a distinct difference to most users from what Windows is. That changes things up a lot. I feel that within 4 years, Intel will have some competative x86 offerings compared to ARM... On the flip side, by then, ARM will be competitive in the server/desktop space much more than today. It's kind of weird, but it will be another round of competition between different vendors all around. I'm not sure what other competitors will come around again. That's not even mentioning AMD's work at their hybrid CPUs... also, some more competition in the GPU space would be nice. It really reminds me of the mid-late 90's when you had half a dozen choices for server/workstation architectures to target. These days, thanks to Linux's dominance on the server, and flexibility and even MS's Windows refactoring, it's easy to target different platforms in higher-level languages. There will be some very interesting times in the next few years.

stephenmm 10y ago

They made several attempts (http://www.cnet.com/news/intel-sells-off-communications-chip-unit/ http://www.cnet.com/news/intel-sells-off-communications-chip...) but I think Intel has a huge cultural problem that does not allow for true innovation outside of core competencies. I worked for the Marvell group and while Intel did not know how to be nimble Marvell had there own issues which is in part (IMHO) why blackberry lost its leadership position. But the biggest problem with Intel is the culture as you are truly just a cog in the wheel there. Just my $.02

tmaly 10y ago

Intel has some amazing research. I was at an internal fair back in 1999 when I was doing an internship there in the Product Dev group that did the Itanium chipset. They has this handheld touch screen device that resembled a modern smart phone that was driven by voice recognition. This was 1999 way before the iphone came around. In my opinion, it is the internal politics and the leadership that has caused them to lose out. Chip design books in academia were already moving in the direction of low power designs during the late 90s. They just did not take any action.

shas3 10y ago
Just saying, working touch screens have been around on devices for 30 years or more. Most 'PDA's, including < $100 phonebooks had decent resistive touch screens as far back as the mid-90s. Also, as such, speech recognition too has been around for at least 25 years. What's new in today's smartphones is the cloud+deep learning driven high-accuracy. You could probably have easily found a handheld with touchscreen and speech recognition at Circuit City in 1999.
- slapresta 10y ago
  Working touch screens are useless without usable touch UIs.
pessimizer 10y ago
The iPhone didn't represent any sort of technical advance. The only thing truly innovative about it was the (almost) all-screen form factor.

ricardobeat 10y ago

Why was the title editorialized by mods?

kazinator 10y ago

This goes back farther than 2005! At one point at the height of the bubble, Intel was involved in mobile devices. I worked for a company that developed secure, efficient wireless communication middleware for that space. Our client hardware was mainly Pocket PC and Windows CE at that time. We partnered with Intel to port our stack to the Linux device they were developing (codenamed "PAWS"). This was around 2000-2001, if I recall. Thing were going very well, when practically overnight, Intel decided to pull out of this market entirely. They shut down the project and that was that. It didn't bode very well for that little company; we gambled on this Intel partnership and put a lot of resource into that project in hopes that there would be revenue, of course. Oops!

crorella 10y ago

He just deleted the post :/

smrtinsert 10y ago
Why would he do that?
- reiichiroh 10y ago
  ALL of his posts are gone from MondayNote now strangely.
  - erbo 10y ago
    And his entire Medium account is gone, too.
sanowski 10y ago
http://webcache.googleusercontent.com/search?q=cache:https://mondaynote.com/intel-culture-just-ate-12-000-jobs-305674fb1274 http://webcache.googleusercontent.com/search?q=cache:https:/...

sp332 10y ago

Looks like the article just got deleted? Here's a cache http://webcache.googleusercontent.com/search?strip=1&q=cache:https%3A%2F%2Fmondaynote.com%2Fintel-culture-just-ate-12-000-jobs-305674fb1274 http://webcache.googleusercontent.com/search?strip=1&q=cache... (It's not available in the Internet Archive because of robots.txt, which makes me wonder how Google justifies caching it but whatever)

StringyBob 10y ago
Deletion was accidental according to Jean-Louis Gassée (author) Twitter feed...
- kyrra 10y ago
  link for context: https://twitter.com/gassee/status/732280308049936384 https://twitter.com/gassee/status/732280308049936384 > @sebbrochet @fdevillamil Embarrassing mistake, don’t know what to do other than grovel and hope Medium can undo.
  - fjarlq 10y ago
    Happy followup: https://twitter.com/gassee/status/732368830190620673 https://twitter.com/gassee/status/732368830190620673 > Big Thanks to @Medium. My fat fingers killed 9 yrs of Monday Notes this am. Awful feeling. They fixed it quickly. Much appreciated.

voiceclonr 10y ago

Intel's problems are long time coming. They lost track of real customer needs and have been operating in their own x86 centric world. It was always "let me build it first and then try to look for a good usage". I am ex-Intel and used to do software things. None of the leadership had a real sense of what customers really wanted and the h/w architects just built things that they are really good at. And they justified it in unnatural ways ("You know why you need such a fast processor ? You can run this flash game at 10K fps"). Things have been getting very efficient both on the client and the server side. With Cloud, they will have some momentum behind - but long term, I think the glory days are gone where they can just produce chips and someone would take it.

visarga 10y ago

... and also the GPU market.

chillingeffect 10y ago

FWIW, AMD also struck out HARD in the mobile market. When I interviewed there (just before release of iPhone 3G), I was jazzed about the "imminent" opportunity for mobile CPUs. I expected AMD to scale right down and into the phone, tablet and CPU market. We watched the world tumble around us as if on a ferry boat. When I voiced the words, "mobile CPU" to anyone there, people were oblivious and silent. The company was just out of touch, thinking everyone was going to keep buying tower PCs and laptops. It seemed the only variable they thought customers cared about was performance. People would buy AMD if it was just a little faster. They didn't realize it was simply the wrong product/market. Performance wasn't nearly as important, sigh.

petecox 10y ago
one manufacturer that did anticipate the 'death of desktop' was nVidia, as powering the "iPad killer", Pixel C.

albasha 10y ago

> The author deleted this Medium story

lquist 10y ago

A friend of mine at Intel told me that Intel doesn't care that much about not owning this market because the size of the profit pool around server chips is orders of magnitude greater and they have monopolistic control of that market.

ryao 10y ago
That is the same thing that the mainframe vendors said about minicomputers and the same thing that the minicomputer vendors said about microprocessing. Intel's failure to recognize itself as the next link in the cycle was a colossal mistake. They should have gone to Steve Jobs and offered to rectify their mistake the moment they realized how popular the iPhone was. Instead, they tried the Itanium strategy of promising things they could not deliver. What made them think that would work after the first failure?

udkl 10y ago

The post was deleted. Here is the google cache link for quick access : http://webcache.googleusercontent.com/search?q=cache:https://mondaynote.com/intel-culture-just-ate-12-000-jobs-305674fb1274 http://webcache.googleusercontent.com/search?q=cache:https:/... And here is the raw text(without any links) : http://pastebin.com/e10Yw0zi http://pastebin.com/e10Yw0zi

nkjoep 10y ago

Unable to read the story. Seems delete from medium.

EGreg 10y ago

The author deleted this Medium story.

cowardlydragon 10y ago

Article gone? Well, I'd guess fundamentally it was about tying yourself to the Microsoft sociopath mothership. Intel could have taken Linux by the reigns and made an OSX-equivalent and certainly windows-beating decades ago. But they didn't. So they missed the boat.

klodolph 10y ago
> Intel could have taken Linux by the reigns and made an OSX-equivalent and certainly windows-beating decades ago. I disagree. Hardware companies have a long history of trying and failing to make good software. It's not in their core business, so the company culture and talent pool isn't right. The same is true the other way around, just look at how rough Microsoft's entry into the console market was. On top of that, the "last mile" of usability between the current state of Linux and something that can realistically compete with Windows requires experienced UX designers and an infusion of design knowledge into the software engineering team. This isn't realistic for most companies. Just to be clear, not saying it would have been impossible, but I would bet against it.
- cowardlydragon 10y ago
  I'd be really interested to know what the team size of the original OSX people was. Granted they were probably all NextSTEPpers that really knew the OSX core inside and out to begin with. But still, Apple at the time had 1/100 the resources of Microsoft and Intel. Intel could have bought BeOS after Apple passed. Think about that: BeOS with real backing.

bsder 10y ago

Intel didn't miss the smartphone market. It simply made no sense (and still makes no sense) to go after a less profitable market. When the margins on x86 cross below that of ARM chips, Intel will come in and destroy all the ARM manufacturers.

duaneb 10y ago
> When the margins on x86 cross below that of ARM chips, Intel will come in and destroy all the ARM manufacturers. Unless the world has moved on. Profitability happens over time, so even declaring a market unprofitable may shut you out for ever.
wklauss 10y ago
It did. Even Otellini said so: http://www.theatlantic.com/technology/archive/2013/05/paul-otellinis-intel-can-the-company-that-built-the-future-survive-it/275825/ http://www.theatlantic.com/technology/archive/2013/05/paul-o... And I'm not so sure they'll be able to go into ARM fabbing that easily. Margins of X86 are high, but they are selling less of them, so expanding to new market would have been a wise move. To their credit, they tried twice and couldn't make it work. Not sure if things could have been different considering ARM is a licensable architecture other people can use.
stdgy 10y ago
x86 was already on lock down. They could have ridden into the ARM ecosystem, guns blazing, and wouldn't have lost a penny from their existing x86 platform. ARM doesn't compete against x86 in mobile. That's obvious now, but it (apparently) wasn't obvious at the time. Intel turned down a boat load of free money.

brisance 10y ago

Article is back up. He accidentally deleted his 9 years' worth of posts. https://twitter.com/gassee/status/732368830190620673 https://twitter.com/gassee/status/732368830190620673

hoi 10y ago

The mobile space was aready hotting up. Nokia, alone in 2005 was already selling over 250M devices at around 35-40% market share. They were already using ARM chips. Forecast for smartphones was already high, since the whole mobile industry was posiioning itself to upgrade. It was always a question of getting the telcos to improve their 2G networks to 3G before the smartphone explosion was expected. Intel should have known this.

dredmorbius 10y ago

Article error: "In 1985, fresh from moving the Macintosh to the x86 processor family, Steve Jobs asked Intel to fabricate the processor that would inspirit the future iPhone. The catch: This wouldn’t be an Intel design, but a smaller, less expensive variant of the emerging ARM architecture, with the moderate power appetite required for a phone." That should be 2005.

mastazi 10y ago

OT but somehow related: The article contains the sentence "Jobs asked Intel to fabricate the processor" and "Intel styled itself as a designer of microprocessors, not mere fabricator". Question: according to your own experience, is it common in English to use "fabricate" and "fabricator" as synonyms of "manufacture" and "maker"? I am much more familiar with the negative meaning (e.g. "fabricated lies") but since I'm not a native speaker my vocabulary might be limited.

dragonwriter 10y ago
Specifically in the case of chips, "fabricate" seems to be fairly common.

blhack 10y ago

...what? Intel didn't miss anything, they sell the hardware that powers the infrastructure behind these new, always-connected devices.

shortsightedsid 10y ago
They were in that even before smartphones were the norm. Considering that they had to compete a lot more in the server space (SPARC comes to mind) and then won that market doesn't mean they won the smartphone market. AFAIK, Paul Otellini also made the same argument about servers however, the point is really about processors that run inside consumer products and not server infrastructure. Intel Inside just isn't the case.

Agathos 10y ago

Hey, it's the BeOS guy!

inlined 10y ago

I'd love help understanding how Intel's failure in the smartphone market didn't also doom the IoT market. The x86 chips never took off because they were expensive and took too much energy. If IoT is to be ubiquitous, those barriers seem even more important. Intel's comment about IoT makes me wonder: do they think they just lost the first mover advantage for mobile & the industry got hooked on ARM ISAs? Do they still believe the story that their chips will become cheaper and more powerful than ARM if they change nothing?

makomk 10y ago
I reckon it already has doomed Intel in the IoT market, investors just haven't realized it yet. Their answer to the IoT involved buggy shrunk-down 486s with poor performance and power consumption and very limited onboard peripherals compared to their ARM competitors. (I can't even find power consumption or instruction set information for the newest ones, which is worrying.) They've put a lot of money into high-profile publicity stunts like an Intel-funded TV series ("America's Greatest Makers"), BMX bikers, Arduino boards, etc but apparently if anyone wants to integrate their chips into the kind of IoT product they're being promoted for, they can't actually get them unless they're a big-name brand. They mostly seem to be relying on the press regurgitating their PR and not looking into the details.

darklajid 10y ago

Time to get out my Maemo (RIP Nokia) and Meego (too bad, Intel) merchandise and go cry in a corner. Maemo/Meego WebOS Firefox OS All of these were interesting, all failed. I'm still convinced that there's a market for a non Android/iOS solution.