Intel made a huge mistake 10 years ago

http://www.vox.com/2016/4/20/11463818/intel-iphone-mobile-revolution

by molecule • 10 years ago

163 189 10 years ago

The article uses Clayton Christensen's theory of disruption to explain why Intel missed the mobile phone market and gave it away to ARM. I would just add that I think the same is happening in the Internet of Things.

zeeshanm• 10 years ago

Would be interested in hearing your analysis on IoT.

woodandsteel2• 10 years ago

What I meant is I think that Intel is focused on producing high-profit margin chips, so it is missing the boat on IoT because its chips cost too much, and ARM is dominant. But I'm not an expert in this area, so I might be wrong.

hga• 10 years ago

Beware, for this article includes a gem like this:

Instead, these companies turned to a standard called ARM. Created by a once-obscure British company, it was designed from the ground up for low-power mobile uses.

Nope, their price budget required plastic instead of ceramic packaging, which had a 1 watt power budget. They were sufficiently conservative that it ended up dissipating 1/10 of a watt. The usefulness for mobile applications came later.

On the other hand, if Intel turned down an offer from Apple to supply the iPhone CPU, well, that sounds like a mistake. Then again, it's such a different business that it's not clear it would have worked for them, especially given the opportunity cost. So different, their FPGA aquisition Alteria is still having their lower end more price sensitive chips fabricated by TSMC, apparently because Intel is just too expensive for that market.

And Apple could well have changed to ARM later, Macs are now on their third CPU architecture.

bsder4• 10 years ago

The usefulness for mobile applications came later.

True, but not quite the whole story.

Some enterprising engineers wrote a cellular protocol stack in ARM assembly language that let everybody use a far cheaper core than anything else.

Very quickly, ARM became entrenched in the feature phones. Then, the evolution occurred to smartphones, and ARM was already in the phone.

elcct• 10 years ago

Maybe it is good that Intel turned down that offer, because otherwise now we could have desktop sized iPhones with built in winter warmers.

FullyFunctional2• 10 years ago

I would agree with the analysis, but I think it's missing an interesting fact: The ARM threat was non-existant until DEC Alpha engineers created StrongARM and showed the world that you could make a fast ARM. StrongARM was effectively renamed XScale around the time Intel got hold of the IP.

aidenn02• 10 years ago

Former DEC Alpha engineers also proved you could make a power-efficient PPC at P.A. Semi, and were involved in the early versions of the MIPS SoC line that is now owned by Broadcom.

Really it's hard to find a platform that isn't from Intel from the last 20 or so years that doesn't show an influence from them.

cm34• 10 years ago

Precisely, and let's not forget AMD64, while Intel was pushing Itanium.

jakub_h• 10 years ago

and showed the world that you could make a fast ARM.

My memory may be a bit hazy, but wasn't one of the demonstrations of the original ARM a program in interpreted BASIC that did in twenty seconds something for which a compiled C program on a 80386 needed thirty seconds? Or something like that?

FullyFunctional2• 10 years ago

That's demonstrating you can make a fast BASIC on an ARM. What I'm talking about is making a faster ARM cpu. According to Wikipedia, StrongArm debuted at 233 MHz. I can't remember how fast the contemporary implementations were at the time, but I remember that 233 MHz was a lot faster. (For the record: I'm neither fan of ARM nor x86).

alblue• 10 years ago

There were two experiments that caught my memory back then.

The first was them trying to understand why the ARM chip they had on a test board was working, despite the fact that the power supply wasn't plugged in. It transpired that there was leakage currents from the keyboard which ended up giving the CPU enough power. (Discussed in a Computerphile YouTube video on the origins of ARM.)

The other was a demo of showing an ARM chip being powered off a thermocouple of the waste heat from a 286 (or maybe 386 ... either way an old Intel CPU)

timthorn• 10 years ago

My also hazy memory recalls that at the launch of the Newton, its CPU (ARM610 I think) was described as more powerful than a 486, at the time the chip to lust after.

Retric11• 10 years ago

Intel's largest mistake was integrating graphics on their CPU. This cost them more than the entire cellphone CPU market is worth.

This ate up valuable chip real estate, RAM bandwidth, thermal overhead etc. Worse it cemented the idea that Intel was crap at graphics while slowing down the PC upgrade cycle.

pervycreeper• 10 years ago

Could you elaborate on this?

Retric11• 10 years ago

Graphics cards have a small amount of very high bandwidth dedicated RAM close to the GPU. PC ram is further from the CPU which increases latency due to the speed of light lag. CPU's get around this by using a lot of L2/3 cache. Which means PC's don't really care as much about RAM bandwidth. Instead they want lots of RAM.

Thus main memory is much slower than GPU bandwidth. So, now your on chip GPU is memory starved and reducing the bandwidth avalabel to the CPU. There are some advantages if you want to pass stuff back and forth, but the standard rendering pipeline is designed for GPU's.

dragontamer6• 10 years ago

What the hell else do you think Intel should put on those chips?

Note that ~15% of Steam Players are gaming on Intel iGPUs, as awful as they are.

http://store.steampowered.com/hwsurvey/

Retric11• 10 years ago

A pure blank space would work as they save on manufacturing costs and get faster CPU's due to heat limits and more RAM bandwidth.

chadgeidel4• 10 years ago

And I'm pretty happy about that actually. Having indie games on my laptop with good battery life is preferable to no games or really bad battery life.

Chlorus2• 10 years ago

You realize motherboards had shitty integrated graphics long before Intel decided to put them on-die? How did they slow down the PC upgrade cycle?

Retric11• 10 years ago

Significantly reducing how powerful the next generation of CPU's where.

touristtam6• 10 years ago

Intel basically pushed the integrated graphic chips out of the motherboard like they did for the north bridge. I think that was a smart move.

pcwalton• 10 years ago

Intel's largest mistake was integrating graphics on their CPU. This cost them more than the entire cellphone CPU market is worth.

Er… you mean like every single mobile SoC?

Retric11• 10 years ago

These chips are 3D stacked with ram, but produced seperatly.

Which means if one part is defective you can use a different part boosting yields. But, they also get much lower latency.

Now recent Phone Chips have included on die GPU's but phones are so power limited it's not an issue.

Maken• 10 years ago

They should instead have integrated a CPU into their graphics card like AMD do with those APUs, which they sell to every consoler maker, and NVIDIA do with their Tegras, for high spec smartphones.

Retric11• 10 years ago

This can really help CPU-RAM latency which often slows things to a crall. However, modern Intel CPU's have rediculus amounts of cache.

touristtam6• 10 years ago

I think Intel was hoping to be able to license (virtually for free) Nvidia technology at some point, during the legal battle they had with Nvidia.

chadgeidel4• 10 years ago

In your opinion what should they have spent that die space on? Moore's law was about transistor count too. They didn't have a lot of architecture changes they could work with and the on-die memory was pretty much maxxed out.

Retric11• 10 years ago

Nothing was a real option. Thus significantly reducing manufacturing costs, boosting yields and with a better thermal envelope processing speeds. Remember the last few die shrinks have run into huge heat issues.

osweiller• 10 years ago

For the past decade plus, Intel has been their own biggest competitor. Atom processors aren't weak and built on an old process because Intel can't make them better, but rather because Intel's greatest fear is undercutting their more lucrative markets. Their very high profit markets.

So if you go back ten years and say "what if Intel did this" (which in that case was making a processor for Apple that Apple was paying maybe $20 each for, estimating on the very high side), it is over simplified to just imagine that it's additive. Intel has been rolling on profit margins that the hyper-competitive ARM market can only dream about. It may be time for them to adapt (and arguably they have been), but those 12,000 didn't lose their job because Intel didn't do something different ten years ago. They, and thousands others, might never have had an Intel job in the first place if Intel made different choices.

AceJohnny2• 10 years ago

TL;DR: Intel turned down the opportunity to make the iPhone's chip and gain a foothold in the mobile market.

A more direct source, from Intel's own CEO (at the time): http://www.theinquirer.net/inquirer/news/2268985/outgoing-in...

    Otellini said Intel passed on the opportunity to supply Apple because the economics did not make sense at the time given the forecast product cost and expected volume. He told The Atlantic,     "The thing you have to remember is that this was before the iPhone was introduced and no one knew what the iPhone would do... At the end of the day, there was a chip that they were interested in that they wanted to pay a certain price for and not a nickel more and that price was below our forecasted cost. 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."

But the thing I don't understand is why Intel gave up on XScale, their ARM-compatible effort (they held one of the few expensive ARM licenses that allowed them to expand the core architecture). How's Atom doing nowadays? Last I heard, Intel had partnered with Dell to make the Atom-powered Venue android tablets. Can't say they're grabbing headlines with them...

wmf2• 10 years ago

Anything in Intel that's not x86 gets killed by internal politics. Somehow Intel didn't understand that when they bought it.

alanh2• 10 years ago

Eh, don’t forget the external forces. Remember Itanium vs AMD’s x86_64?

nickpsecurity3• 10 years ago

Perfect example with their best replacement for x86: the i960. It was one of most impressive compromises I've seen from the time period in terms of speed, reliability, and security.

https://en.wikipedia.org/wiki/Intel_i960

Some variants are still in production mostly for legacy purposes but not the one (MC) I wanted. Too bad.

http://www.intel.com/design/i960/index.htm

Gibbon12• 10 years ago

My take is Intel doesn't really understand markets where they need to fight for market share. They invest in something, it doesn't become a large profit business in a few years so they kill it. Customers see this and passively/actively avoid Intel products when possible.

Passive avoidance: Customer doesn't even think to consider what products Intel is offering. Active avoidance: Tries not to spec Intel products when possible.

The internal politics part comes from this scenario. Say someone makes a good proposal, spend $20 million. In return a get product line worth 100 million yr gross and $40 million net. Manager thinks, $100 million a year isn't going to get me a VP position at a $50 billion dollar company.

dogma11386• 10 years ago

They don't need Atom, as far as mobile devices go they are bringing Core to ARM's power envelope. You can get Core M CPU's today with 3W power envelope with considerable performance lead over most ARM SOC's.

Intel has made a bet that it would take just as much time for ARM to reach x86 level of performance as it would take Intel to bring x86 power consumption down to SOC levels. Now Intel can play on both sides with their low power x86 parts, Xeon-D with upto 16 cores and Core-M in 2c/4t configuration.

rasz_pl4• 10 years ago

That core M will be $1xx compared to $1x-2x for ARM chips.

coldtea4• 10 years ago

Now Intel can play on both sides with their low power x86 parts, Xeon-D with upto 16 cores and Core-M in 2c/4t configuration.

There's only one little problem: the market has settled on ARM and doesn't care anymore.

So how are they gonna play those "both sides" again?

agumonkey• 10 years ago

Single core Atom (2012 Z2480 on Razr I) at 2GHz has significant perceived performance advantage even compared to processors released after. It's way snappier than the Moto G quadcore ARM cpu from 2013. I don't know how much battery life is sacrificed for this though. But I'd be very eager to try a Core M smartphone, since Atom has always been the low-end of Intel cpu architecture. That said I lost track of Intel marketing, maybe Core M is just a rebranding of the same or similar arch.

mtgx5• 10 years ago

First off, those "3W Core CPUs" are a scam and a dud. They will overheat and throttle.

Second, they cost WAYYYY more than a mobile chip. They cost more than an iPhone's ENTIRE BOM, or about 10x more than what Apple pays for its chips.

bnolsen• 10 years ago

so intel is going to start selling CORE processors for 1-5usd apiece?

skylan_q2• 10 years ago

But the thing I don't understand is why Intel gave up on XScale, their ARM-compatible effort This isn't the first time Intel sold off a slice of itself. I remember AMD doing this many, many times. For over 40 years, the form factor didn't matter. All that mattered was having the fastest and most performant CPU in the entire world. There was a real demand to crunch numbers and move bits since the 70's, so that's the world Intel, AMD, and everyone else knew.

To sell off a division that sold low-power chips for tiny margins in an industry that never, ever, ever explodes (until it did) was just plain normal. He would have gotten pressure and funny looks from the industry and shareholders if he didn't sell it off.

petecox• 10 years ago

Well by the same token AMD is entering the ARM chip business.

7 years ago they sold their Imageon GPU to Qualcomm, which is now going gangbusters inside every Snapdragon-based phone.

rasz_pl4• 10 years ago

Atom is doing 'great'. Intel spend over $7 billion(1) subsidizing Atom in hopes chinese vendors would use it, they rarely did. Finally in 2015, partially driven by fear of prosecution for price dumping against native Chinese silicon manufacturers, they entered into a 'cooperation'(2) with gov run semiconductor giants, and by cooperation I mean Intel gave them 1.5B, free Atom license and committed to spend $5.5B on flash fabs in the mainland. Intel also also promised to shareholders they would stop subsidizing Atoms ... which didnt last that long (3).

1 http://appleinsider.com/articles/15/01/07/after-intel-spent-...

2 http://www.cnet.com/news/intel-doubles-down-on-mobile-with-1...

3 http://www.digitaltrends.com/computing/intel-to-chinese-elec...

Latest Atoms are almost usable, and you can get passable quad core 4GB ram/64GB flash tablet for $160 (Chuwi Hi10).

chm3• 10 years ago

This is meta, but you can make the quoted text more readable if you add a newline after some X number of words, like this:

    Otellini said Intel passed on the opportunity to supply
    Apple because the economics did not make sense at the
    time given the forecast product cost and expected
    volume. He told The Atlantic, "The thing you have
    to remember is that this was before the iPhone was
    introduced and no one knew what the iPhone would do...
    At the end of the day, there was a chip that they were
    interested in that they wanted to pay a certain price
    for and not a nickel more and that price was below our
    forecasted cost. 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."

rpgmaker• 10 years ago

Oh, so that's how it's done? I always thought there was a formatting rule I was missing. Thanks.

pohl• 10 years ago

One downside of this is that it becomes very unreadable on small devices (the user has to horizontally scroll back and forth to read each line, ugh)

Representing quoted text in italics does not suffer that downside.

fulafel• 10 years ago

why Intel gave up on XScale

The gist of the Digital Semiconductor acquisition was that DEC had kicked Intel's ass in circuit design but turned out to have insufficient volume to be profitable, so Intel and DEC agreed to move DEC onto the upcoming Itanium and DEC could get rid of their bleeding edge but money losing semi business. Alphas and XScales were both remarkable feats - on high performance and low power end, respectively. DEC agreed to kill Alpha and move to Intel's Itanium - but Intel had no existing ARM style product at the time.

coredog64• 10 years ago

Intel was essentially forced into buying XScale from Digital via a legal settlement. DEC sued Intel for uncompetitive behavior (and looked likely to win).

I don't think Intel really wanted ARM and so made half-hearted attempts at selling it.

slededit• 10 years ago

The Alpha's extremely weak memory order gurantees would have doomed it in the multicore market. Its hard enough to get multi threaded code correct on X86.

ghaff• 10 years ago

I was an industry analyst at the time and I think the short answer is that Intel made the decision to pursue an x86-everywhere strategy. They thought 1.) That it would benefit them if there was a the same x86 architecture from server to mobile and 2.) They thought Atom would meet mobile requirements.

(1) was doubtless true. But (2) didn't pan out.

One can find slides from IDFs etc. at the time with Intel trying to buttress its x86-everywhere arguments by showing that Flash ran more consistently on small devices when they were x86-based.

In retrospect, Atom was mostly wish fulfillment. I can't say whether this was an execution issue or whether the strategy was intrinsically doomed to fail.

kjs32• 10 years ago

I believe the easy answer is that they thought they could adapt x86 to all markets, and that became the strategy.

More complicated is that Intel came into the mid-90s with several "next generation" architectures, some that weren't solely developed at Intel. XScale came from Digital and had IP from ARM. i960 was a joint venture with Siemens. And they still had the i860 which by this point it was clear was never going to meet expectations in the market. So when the x86 folks said "Intel should put all it's wood behind our arrow", politically they were fighting groups that were weakened by NIH or who'd already for all practical purposes failed. Probably didn't hurt that Pentium was doing quite good and P6 was looking good on the horizon.

alanh2• 10 years ago

A very long-winded article with a clickbait title saying… nothing more than that they missed the mobile revolution.

mkehrt• 10 years ago

I disagree. This is an interesting article explaining what is happening to Intel and why. But you're not the target audience if you know this already; every piece of information in this article would be novel and interesting to someone outside of tech.

chmaynard• 10 years ago

Another take on the same topic:

http://appleinsider.com/articles/15/01/19/how-intel-lost-the...

touristtam6• 10 years ago

I actually think that other factors have not been mentioned in the article, like the contract lost to AMD in the video console market, or the long winded legal battle with Nvidia that didn't go the way intel had wished.

kristianp• 10 years ago

It's not just intel's (and ipads) fault that pc sales are down.

I think the big mistake PC makers are making right now, is that the PCs they make aren't improving from generation to generation for their mass market products. Sure the processors aren't doubling in MHz like they used to, but the rest of the machine isn't improving either. If I go into a shop with $3-400 today and buy a laptop, the machine I get is the same as I would have gotten 3 years ago:

1. 768 line display

2. 5400 rpm hdd

3. 2 GB of ram (4 if I'm lucky)

4. Similar weight

5. Similar poor battery life

6. loads of crapware.

The pc manufacturers aren't pushing hardware manufacturers to improve the cheapest spec. Why don't cheap new laptops have greater DPI on their LCDs than 3 years ago? Because manufacturers haven't changed their main production lines. They are saving money on retooling, but on the other hand their product isn't improving, and now they're paying the price. Apple is doing the same thing with their Air line, which is only improving the processor generation, it has the same body and screen as years ago.

If manufacturers improved their cheapest line every 3 years, people would see enough of an improvement in their price range to buy a new machine every 3 years like they used to.

cm2187• 10 years ago

I'd be inclined to agree. I do not know anyone who doesn't also own a laptop, even the most extreme mobile junkies. They may keep their laptop for longer, and perhaps do not bring their laptop everywhere, which means less coffee spilled on it. But they won't work, refresh their CV, plan the design of their new kitchen or build their budget for the holidays on a mobile or a tablet. Are mobiles and tablet really substitutes for laptops? They probably become obsolete more quickly. But even that is not really the case anymore as the slow down in iPhone sales is showing.

ac292• 10 years ago

Exactly the same complaints could be made about the bottom of the smartphone market ($100-200 range). Higher end smartphones may have improved more than high end laptops over the past few years, but mid-range to high end laptops are definitely nicer than they were 3 years ago.

You're also a bit disingenuous on your laptop complaints, the best selling laptop on Amazon in that price range has a 1080P screen, 4GB RAM, a decent i3 Broadwell (which is faster and uses less power than its equivalent Sandy/Ivy Bridge processor you would have gotten 3 years ago). Crapware is only a valid complaint if you choose to use Windows and are incapable of taking an hour to install a clean copy when you unbox it.

Redoubts• 10 years ago

Crapware is only a valid complaint if you choose to use Windows and are incapable of taking an hour to install a clean copy when you unbox it.

Isn't this most people?

pjmlp6• 10 years ago

Crapware is only a valid complaint if you choose to use Windows and are incapable of taking an hour to install a clean copy when you unbox it.

Assuming you get a Laptop that actually works with GNU/Linux.

The only laptop that I still run with GNU/Linux on is an Asus netbook, which was explicitly sold with Linux support.

Guess what, it took more than one year for Ubuntu to properly support its WiFi chipset and I was forced to use a network cable if I wanted any form of networking.

My first GNU/Linux kernel was 1.0.9 with Slackware 2.0, so it is not I am that dumb in GNU/Linux land.

Nowadays I stop bothering and use Windows on all other laptops that I have.

yuhong• 10 years ago

I don't think 2GB of RAM is common anymore (it is not even possible with DDR4 I think). Most low end laptops now ship with at least 4GB.

mtgx5• 10 years ago

You can actually blame Intel, but also the OEMs and the consumers for those crappy specs.

Intel, because it charges so much for its chips, making it a big part of a laptop's BOM - like up to 40%. ARM chips are more like 10-15% of a phone's BOM.

OEMs for putting up with it. And consumers for always wanting the fastest (and more expensive) processor in a laptop at any given price, over virtually any other specification.

It's kind of how phones never seem to get more than 2 days of battery life, and bast majority only get 1 day. They value too much chip performance or big screens or high resolutions before they value battery life. There are $200-$250 phones out there with 6,000 mAh batteries and 720p screens, but they come from noname OEMs and most people aren't interested in them either.

desdiv• 10 years ago

I'm currently shopping for a laptop and has my eyes set on the Thinkpad Carbon X1. I did a comparison between the current flagship model versus the flagship models from the past two years:

2014 Intel Core i7-4600U 1718 [0]

2015 Intel Core i7-5600U 1677 [1]

2016 Intel Core i7-6600U 1847 [2]

Two things stood out:

1. Single-thread performance actually decreased in 2015 for some bloody reason.

2. The single-thread performance of the 2016 flagship CPU is only 7.5% higher than the 2014 CPU, a negligible amount when it comes to purchasing decisions. Much of this improvement probably comes from the faster DDR4-2133 MHz RAM (vs DDR3-1600 MHz) rather than the CPU itself.

[0] http://www.cpubenchmark.net/cpu.php?cpu=Intel+Core+i7-4600U+...

[1] http://www.cpubenchmark.net/cpu.php?cpu=Intel+Core+i7-5600U+...

[2] https://www.cpubenchmark.net/cpu.php?cpu=Intel+Core+i7-6600U...

mavhc• 10 years ago

Not sure why no one's selling to the general public a computer that's "twice as fast as the competition" because it has a SSD in.

I'm waiting for cheap usb-c powered laptops before buying any more

brewdad• 10 years ago

Probably because Joe Consumer only sees 1TB of storage vs 256GB (or more likely 128GB) and buys the one with more.

xbmcuser• 10 years ago

The biggest problem pcs face is that 90% of the stuff they are used for can be done with older generation pcs or mobile. People don't have a reason to buy new pcs. 2 times powerful processor etc won't make someone that uses the pcb for email, Facebook and wordprocessing

lmm• 10 years ago

I went shopping for a laptop a couple of weeks back. Ended up getting the Microsoft Surface Book - not the manufacturer I expected walking in, but the specs are really good, even just ignoring the tablet aspect:

1. 3000x2000 display, touchscreen

2. 512GB SSD

3. 16GB RAM

4. Incredibly light and thin

5. 10 hour battery life

6. No crapware

Of course you'll pay for all that, but it shows there's definitely improvement happening at the high end - other manufacturers are getting there too, though they've got a way to catch up with MS (the HP Envy and the high-end Lenovos were both a lot nicer than anything I saw 3 years ago). Maybe the improvement isn't trickling down as much as it should, but there's room for it to - honestly I think you're forgetting how much more we used to pay for laptops. Time was when $1000 was a basic model. It's just that these days shops push the budget end a lot more, probably because that's what customers want.

alirazaq• 10 years ago

6. No crapware

It didn't come with Windows?

hinkley2• 10 years ago

I believe that we're on the cusp of having a home server market again. There are number of technologies in play currently and when someone figures out how to string them all together we're in for something new.

We are nearly at the point where we don't need to give all of our information to someone else just to have it available to us from our cellphones and laptops.

spiritomb• 10 years ago

don't forget that Intel also made a big bet at a critical time on a partnership with Nokia. that was another couple of years wasted .. further behind Intel fell.

rasz_pl4• 10 years ago

Intel? What about Nokia making miserable 'smartphones' running 24MHz i386???

btilly3• 10 years ago

The most important part of the article is easily missed unless you've read The Innovator's Solution. Which is the follow up book and spends a lot of time looking inside of organizations to see why it is so darned hard to catch the disruptive train.

A company with a profitable niche and a profitable technology will wind up with high internal costs. That's fine in their main business because they have a profit margin to play with. But it is surprisingly hard to trim back that "fat" to go after much lower margin revenue with a cheaper technology. (Fat is in quotes because it isn't really fat. It is necessary for the high margin business.) It is common to try, and to conclude that it is a failure.

That is why Intel made this mistake.

bsder4• 10 years ago

Until Intel isn't producing chips with way more profit margin than an ARM at 100% capacity, it's not a mistake.

ARM has volume, but x86 has profit.

btilly3• 10 years ago

It can be a good business decision to run a business for maximum profit and a quick exit. However when you do that with a major corporation like Intel, it tends to make people unhappy.

Intel will continue with the high profit margin right until the chips don't sell. And then Intel gets to go out of business.

corford2• 10 years ago

Early on, Microsoft missed the internet revolution but were big enough and good enough to survive that early misstep. Intel is big enough and good enough to survive their mobile blunder (though, admittedly, they're taking more time than MS did to get back on the horse).

twoodfin2• 10 years ago

Early on, Microsoft missed the internet revolution but were big enough and good enough to survive that early misstep.

This has become popular myth, but I don't think it's true. Sure, Microsoft wasn't far ahead of the curve on the internet, or they wouldn't have been developing proprietary online services designed to compete with AOL and CompuServe.

But the Bill Gates "Tidal Wave" internet memo was sent in May of 1995! Netscape's IPO was still months in the future, Amazon had maybe a few million $ worth of revenue, and essentially every other web-based company still in business today hadn't been founded yet.

IMHO, billg's memo should be seen as an example of great prescience, rather than a belated corrective maneuver.

corford2• 10 years ago

I guess I'm looking at it from where I was back then (a spotty young teenager). I remember Windows 3.1 needed Trumpet Winsock, then came IE 1,2,3 and they were awful, when IIS appeared it took about a decade to become any good versus Apache. From my point of view things started changing with IE4 and then Windows 98 getting automatic updates. For me that's when MS turned it around (i.e. ~4 years after Mosaic).

asah• 10 years ago

Sigh, the author forgets that Intel tried to leave x86 with Itanium, which was an expensive disaster, and they vowed to never make that mistake again.

tdsamardzhiev2• 10 years ago

Ugh, in 2005 AMD X2's were wiping the floor with any desktop processor Intel had. The only reason Intel stayed in business was that being much, much bigger company than AMD, so they could 1) outsell AMD on availability basis and 2) ditch NetBurst and come up with newer architecture (which was a glorified version of their mobile/older architecture).

mrpippy• 10 years ago

Don't forget the giant (possibly illegal) payouts to keep big customers (Dell in particular) Intel-only. $4.3 billion to Dell between 2003 and 2006.

http://money.cnn.com/2010/07/23/technology/dell_intel/

pj_mukh• 10 years ago

Doesn't this mean Qualcomm should be doing splendidly? But its not[1] :(. What gives?

[1] http://www.sandiegouniontribune.com/news/2015/sep/17/Qualcom...

wmf2• 10 years ago

Disruption theory predicts that mobile SoCs will be more profitable than PC processors at some point in the future and by that point it will be too late for Intel/AMD to start the transition. But it's hard to predict when that point will be and it may never happen because disruption theory isn't always right.

mtgx5• 10 years ago

Qualcomm did poorly last year, because of its failed Snapdragon 810 chip. It lost a ton of sales. Otherwise Qualcomm was and still is dominant in the mobile chip market with close to 50% market share.

Grazester2• 10 years ago

Yep, those things were throttling like mad due to heat issues and performance was not on par with its competition, the A9 and the Exynos processors.

ChuckMcM2• 10 years ago

Waaaaay back when I worked at Intel it was pretty clear they didn't stop doing things that worked. And when the going got tough they stuck with what worked. In the 80's Intel had a really remarkable set of of computing products, from high integration "soc" type x86 chips (80186), high end graphics chips, (8276x), embedded chips (8051), and "server" chips (431 series). Plus a memory business and a whole passel of support chips.

But the chips in the PC had the best margin by far. So the more of those they made, the more profitable they became, and when the chip recession was in full swing in the late 80's and early 90's that is what they kept, shedding all the rest.

In the early 2000's when Moore's law ran right smack into the power wall, Intel was betting they could have an "enterprise" line (Itanium) and a "desktop" line (Pentium), and an embedded line (8051). They guessed wrong and for a brief time AMD's Opteron was kicking their butt. But once they realized the writing on the wall they realigned around 64 bit in the Pentium line and got back on track.

The problem with the ARM assault is that unlike AMD, which could be killed by messing with other users of the chipset and patent attacks and contract shennanigans, killing off someone making an ARM chip does nothing but make the other ARM chip vendors stronger. And they can't kill all of them at once. And worse, to compete with them they have to sacrifice margin on their x86 line and that is something they have never done, it breaks their business model.

Its a real conundrum for them, they don't have a low power, reasonable performance SOC architecture to compete with these guys. And that is driving volumes these days. Further, the A53 (ARM 64 bit) killed off the chance of trying to use 32 bit only ATOM microarchitecture chips in that niche without impacting the value of the higher end Pentiums.

One of the things Web2.0 taught us was that it doesn't matter how "big" the implementation of a node is if your going to put 50,000 of them in a data center to run your "cloud." Ethernet as an interconnect is fast enough for a lot of things.

It definitely makes for an interesting future.

flamedoge2• 10 years ago

if your going to put 50,000 of them in a data center to run your "cloud."

And therein lies Intel's quest to become relevant again. Make more bloated languages so more processors can be sold to servers :/

pjmlp6• 10 years ago

So what programming language has Intel ever designed?

dba7dba• 10 years ago

Someone who was in IT before MS and Intel showed up said MS and Intel got big even though they did not have the best technologies. They got big essentially with smart alliances and good business practices (which included messing with competitors, some practices that can be called dirty).

ralfd• 10 years ago

Recently I talked to a 20 year old kid who didn't know that Apple existed before the iPhone...

Microsoft and Intel got big for one and only one reason: IBM chose them as suppliers for the IBM PC. Had IBM used their own in-house chip or licensed CP/M as operating system computer history would have been different (the Kildall link is especially interesting, Microsoft got really lucky here):

https://en.wikipedia.org/wiki/IBM_801 https://en.wikipedia.org/wiki/Gary_Kildall

For much of the 80s the Intel chips were inferior to other designs like the Motorola 68K. That is why the Macintosh, Atari (today only known for Pac-Man, but yes, Atari made computers rivaling Apple) and Commodore Amiga used more powerful Motorolas.

http://www.skepticfiles.org/cowtext/comput~1/486vs040.htm

But the "IBM-compatible" architecture won despite its inferiority through path dependency and the clones driving price down.

amist• 10 years ago

Now 12,000 workers are paying the price

I guess there are 12,000 other workers somewhere else in the world that now have a job because they get to create what Intel doesn't. BTW, according to past statistics, most of the workers that are now "paying the price", wasn't even Intel's employees 10 years ago.

xiphias• 10 years ago

I don't think 10000 people have problems finding jobs..if you worked at Intel, I'm pretty sure that sounds good in your resumé

ricksplat• 10 years ago

I think the culture of Intel is such that they'll turn this around - sadly it had to come to job losses first. But it was the same (if less severe) in the late 90s when AMD nearly stole their lunch.

jbb555• 10 years ago

" The PC era was about to end."

Not bothering to read the rest. This is entirely 100% wrong. The PC era has not "ended". It's just that we only upgrade every few years instead of every year. And grandma now reads her email on a tablet instead but that was never what PCs were really for.

PCs are still just as much used as ever. We just use other things too, and don't buy a new one every year.

If they can't get this basic fact right then I have no hope for the rest of the article.

seanmcdirmid• 10 years ago

Post PC never meant "no PC," it just meant the end of the PC as a growth market. There is still money to be had in the market, but it is all rather predictable and boring now. When you are a company looking at getting your profits and stock price up, that is important, especially for Intel.

lovemenot• 10 years ago

I disagree. The PC era ended when the PC was no longer the dominant computing platform. We can argue on dates specific markets etc.

Eras are ill-defined, but if you can assert that we once were in a PC era, you must also accept a definition that allows, in principle, for an end to an era.

The dominant platform of its era is the one with the greatest user and developer person hours, sales volume, zeitgeist and so on.

We are in the mobile era.

arielb1• 10 years ago

PCs are still used more than mobile. It's just that the average person had bought a Pentium 4 PC running XP a decade ago and is not going to upgrade it until it breaks.

PCs are now a mature technology, just like cars, and have the resulting long lifecycle.

Smartphones are also getting into this stage.

fauria• 10 years ago

According to the article, back in the 1990s DEC was forced out of business because they underestimated the imapact that PCs would later make on the market, leaving Intel as a leader.

In the 2000s smartphones and mobile devices outnumber PCs. Intel missed that and so ARM dominates the business.

Maybe that same pattern will repeat again with the rising of IoT and wearables, where smaller and cheaper chips become ubiquitous.

The development of Edison and Curie processors might indicate that Intel is betting on this, gearing up for the next "disruptive innovation".

TheOtherHobbes• 10 years ago

In which case we should all buy shares in Broadcom and learn to program Raspberry Pis.

Or possibly more likely - the next transition which will be much messier, with no single winner.

The mainframe -> mini -> desktop -> laptop -> mobile -> SBC path was about miniaturisation. The devices all provide general computing facilities, but they get smaller and faster and use less power, while the UI becomes more accessible to non-expert users.

I'm not seeing how that translates into wearables, because IoT and wearables aren't general purpose computing devices. They're more like embedded hardware and/or thin network clients.

So I don't think that's where the disruption will happen. It's maybe more likely the disruption will happen in consumer AI, where the UI gets simpler still through speech recognition and NLP, and the screen/mouse/keyboard start to disappear.

My guess is traditional processors will become front-ends and glue for hardware AI systems, and the companies to bet on are the ones producing the subsystems. The hardware will follow the same path as general purpose processors, but they'll move from "mainframe" to "SBC" much more quickly.

touristtam6• 10 years ago

But isn't intel trying to cram the same technology in what is basically a smaller physical envelop, instead of looking at it with a different mindset?

a_imho2• 10 years ago

Is there any new information on the 3DXP technology?

touristtam6• 10 years ago

Do you mean this -> http://www.anandtech.com/show/9470/intel-and-micron-announce... ?

a_imho2• 10 years ago

yes, I know it is a bit OT, but there were other Intel related discussions, saw no harm in asking.

hinkley2• 10 years ago

I think in the long run this is one of those mistakes that we will all benefit from.

"Monopolist Missteps and Loses Monopoly Position"

peterclary• 10 years ago

Ironic, given that Intel's long-time leader famously said "Success breeds complacency. Complacency breeds failure. Only the paranoid survive."

skynetv2• 10 years ago

everyone is a pundit with the benefit of hindsight. Intel made the best decision with the available best information. Moreover, Apple is a notoriously difficult partner that will extract every penny from its suppliers. What if Intel did invest few billions to support Apple and then Apple went ahead and did their own chip, like they do now, leaving Intel with costs that cannot be recouped. Same pundit will say "Intel was stupid to spend so much on Apple."

Love it or hate it, Intel still has the right technology and products to appeal to a broad market and make good money. One cannot expect to win every market, you can try if it makes sense and you should know when to walk away.

bobwaycott• 10 years ago

$2 billion in profits is a lot. 12K jobs cut is a lot. I can't help but find it a bit crazy that 12K people who helped make $2 billion in profits are suddenly extraneous. Are that many people really redundant within Intel?

Intel made a huge mistake 10 years ago

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