Intel Corporation
- Why did Intel fail to capture share in the emerging market for tablets, ultra lights, and smartphones?
Intel mainly failed to capture the shares of the emerging markets because of the strategy that the company was using. This was Moore’s theory which stated that after every 18 to 24 months, the number of transistors double on the silicon chip, thus increasing the performance of the transistors and on the other reducing the costs. This made the company to invest in the transistors thus designing new transistors which would be able to work effectively in both PC’s and smart phones. When the company was still under the control of Otelleni in the year 2005, it mainly worked on improving the performance of the transistors hence improving the performance of the PC’s (Krajci, & Cummings, 2013). This mainly saw the company realizing huge profits since the use of Personal computers had really grown. Furthermore, the new transistors were able to allow people to carry their computers from one place to another at ease since they were able to store power. Under the control of Brian Krzanich as the CEO, the company still maintained its strategies instead of changing them due to the changing market. This therefore saw Intel purchasing McAfee which was able to provide security to the personal computers. The purchase of McAfee made it difficult for the company to be able to gain shares in the emerging market since it had hugely invested on McAfee. Moreover, the company designed transistors which could be able to save power hence making the PC’s to be able to run sophisticated software’s such as Microsoft Office (Jones, McCormick, & Dewing, 2012). On the other hand, the mobile phones used simply applications which could be easily downloaded hence making it a disadvantage for Intel to be able to have a share in the emerging markets.
- How does the ARM business model differ from Intel’s? As you look at the long term, how would you evaluate Intel’s chances of competing effectively?
ARM mainly focuses on licensing transistors which can be used by smart phones and tablets. On the other hand, Intel manufactures its own transistors and this consequently becomes a disadvantage (Krajci, & Cummings, 2013). Since ARM only licenses the transistors, it makes it easy for the company to be able to get the best transistors from companies which manufacture them. Hence providing the best transistors which can be able to provide a longer battery life. Thus many mobile and Tablet companies have therefore adopted the use of ARM licensed chips since they are effective and thus provide very good results for phones and tablets. Since Intel’s success depends on the type of chips they manufacture, it consequently makes it hard for the company to be able to perform better as compared to ARM because its transistors do not provide a longer battery life. Hence ARM have adopted a simpler business model which makes it easy for the company to be able to acquire high quality transistors which can work effectively on mobile phones which require them to have a longer battery life.
According to my point of view, Intel can be able to compete effectively simply because of the types of strategies that it has currently put in place (Jones, McCormick, & Dewing, 2012). Intel has partnered with different mobile companies in order to come up with chips which are compatible with their products. This consequently makes it for Intel to be able to compete with ARM. On the other hand, most mobile companies have adopted Intel’s software tools which are not compatible with ARM’s chips hence making them to rely on Intel for both the software’s and the chips.
- How effective has Intel been at responding to the ARM threat? Why has Intel diversified into software?
Intel has been working with mobile manufacturing companies in order to provide the best software applications for the companies at a cheaper price. This has consequently increased Intel’s market share since most mobile companies have adopted to the Intel’s software. This is also advantageous since Intel’s software is not compatible with ARM’s licensed CPU’s and thus making it easy for Intel to be able to beat ARM (Krajci, & Cummings, 2013). Intel can therefore be able to beat ARM if most companies adopt to Intel’s software’s due to compatibility issues. Furthermore, Intel chips have a high horsepower compared to ARM’s chips. Most mobile companies, due to the commoditization of their products, have opted for chips with a high horsepower. Intel is also working on improving its weaknesses and using ARM’s weaknesses in order to be able to beat the company. Intel has therefore employed this factors in order to be able to deal with the threats which it is facing from ARM.
Intel has mainly diversified into software in order to be able to expand its market beyond PC’s and servers. This will consequently made it easy for the company to be able to reach a wider market and hence being able to realize profits. Moreover, the company acquired McAfee which is responsible for providing security and firewall for its chips (Jones, McCormick, & Dewing, 2012). This will therefore allow Intel to be able to come up with the best software’s ever with a very strong security. Diversifying into software is therefore a strategy which has been adopted by Intel in order to increase its market share in the mobile world. This is also one of the best strategies that the company can be able to beat its competitors and hence reaching a very wide market.
- What is the rationale for the McAfee purchase? Do you believe the acquisition will create value for Intel and its shareholders? Why or why not?
Intel purchased McAfee in order to provide strong security to its chips. Furthermore, since the company has diversified into software, this has consequently made it easy for the company to be able to secure its software. Thus the software provided by Intel will be secure and cannot be easily hacked into. Furthermore, this will really help in creating market for Intel’s software since it has a very strong security. This will therefore see the company being able to carry out different activities at ease without any problems at all (Krajci, & Cummings, 2013).
According to my point of view, I think Intel has failed in buying McAfee. This is mainly because the company has resulted in adopting software in order to be able to regain the mobile market share. This move is very risky as it may backfire hence leading to a very huge loss. The company should have integrated its chips in order to make them compatible with smartphone and tablets. This move would have made it easier for Intel to be able to beat ARM in the market. This is mainly because Intel has high horsepower chips which many companies are are looking forward to working with. This move is therefore likely to backfire since most smartphone companies are currently working with software companies which provide them with the best software applications which are end user friendly (Jones, McCormick, & Dewing, 2012).
Reference
Krajci, I., & Cummings, D. (2013). Android on x86: An Introduction to Optimizing for Intel® Architecture.
Jones, T., McCormick, D., & Dewing, C. (2012). Growth champions: The battle for sustained innovation leadership : the growth agenda. Hoboken, N.J: Wiley.
