Running head: CASE STUDY 1 CASE STUDY 5 Case Study Hult international business school. Introduction: The particular case study begins by stating the various problems associated with the company after the outburst of smart phones and smart technology in the world, despite the fact that Intel was the leading manufacturer of microprocessor and other computer chips in the world. The company enjoyed a net worth of $11 billion with revenue of over $53 billion, as reported by their finance department. And next to this was AMD which has lost almost $1.2 billion of the gross sales reaching an aggregate of $5.2 billion. Despite their market dominance, Intel still faced a considerable threat from a new technology that rapidly consumed the IT market. Smart phones and smart technology became the latest trend for common users, and many of them tend to buy a tablet or smart phone instead of a laptop or personal system. In 2013, the global sale of personal computers fall almost 13% and one of the largest declines in a period of 10 years and this particular downfall increased with each year forecast. Major problems: In order to identify the major problems associated with the Intel Company, the 5Ws is used in order to understand the severity of the problem in this particular case study · The first W is associated with what happened actually? It is clear from the case study is that the PC market has faced a global downfall that has affected Intel Company and their processor market · The second W is related is who is involved in this particular scenario? As per the case study, smart phones and tablets has grabbed a large amount of consumer and market share that has led to create a very serious threat for IT industries, including Intel company. One of the most prominent and direct competitors for Intel was the ARM manufacturing company, which was developing microprocessors and microchip for different smart phones and tablets. · The third W defines when this particular case took place? There is actually no date or time to support this that when exactly this particular scenario took place. The smart phone technology rapidly grabbed the market share within years, however, a figure was stated by the case study indicating that in the year 2013, the global sales of PC went down up to 13% and by the end of 2016, the market share of smart phones and smart technology will reach 60% · The fourth W describes the place where this case occurred. Clearly, Intel is an international label, one of the leading companies to manufacture microprocessor. However, reviewing the particular case study more thoroughly, the ARM processor is a British based company manufacturing smart phones microprocessors and chip. · The fifth W refers to the reason why this case happened? This is probably the core of this case study, that according to Moore’s law, the size of electronics are decreasing with each passing year, meaning that with each passing year, there are new technologies that ...

1. Running head: CASE STUDY 1
CASE STUDY 5
Case Study
Hult international business school.
Introduction:
The particular case study begins by stating the various problems
associated with the company after the outburst of smart phones
and smart technology in the world, despite the fact that Intel
was the leading manufacturer of microprocessor and other
computer chips in the world. The company enjoyed a net worth
of $11 billion with revenue of over $53 billion, as reported by
their finance department. And next to this was AMD which has
lost almost $1.2 billion of the gross sales reaching an aggregate
of $5.2 billion. Despite their market dominance, Intel still faced
a considerable threat from a new technology that rapidly
consumed the IT market. Smart phones and smart technology
became the latest trend for common users, and many of them
tend to buy a tablet or smart phone instead of a laptop or
personal system. In 2013, the global sale of personal computers
fall almost 13% and one of the largest declines in a period of 10
years and this particular downfall increased with each year
forecast.
Major problems:
In order to identify the major problems associated with the Intel
Company, the 5Ws is used in order to understand the severity of
the problem in this particular case study

2. · The first W is associated with what happened actually? It is
clear from the case study is that the PC market has faced a
global downfall that has affected Intel Company and their
processor market
· The second W is related is who is involved in this particular
scenario? As per the case study, smart phones and tablets has
grabbed a large amount of consumer and market share that has
led to create a very serious threat for IT industries, including
Intel company. One of the most prominent and direct
competitors for Intel was the ARM manufacturing company,
which was developing microprocessors and microchip for
different smart phones and tablets.
· The third W defines when this particular case took place?
There is actually no date or time to support this that when
exactly this particular scenario took place. The smart phone
technology rapidly grabbed the market share within years,
however, a figure was stated by the case study indicating that in
the year 2013, the global sales of PC went down up to 13% and
by the end of 2016, the market share of smart phones and smart
technology will reach 60%
· The fourth W describes the place where this case occurred.
Clearly, Intel is an international label, one of the leading
companies to manufacture microprocessor. However, reviewing
the particular case study more thoroughly, the ARM processor is
a British based company manufacturing smart phones
microprocessors and chip.
· The fifth W refers to the reason why this case happened? This
is probably the core of this case study, that according to
Moore’s law, the size of electronics are decreasing with each
passing year, meaning that with each passing year, there are
new technologies that are being invented and tested to replace
its previous version. Many of these inventions are better in
every aspect than the previous version, making it the most
profitable product in market.

3. Significant Factors
The main factors that are associated with the following case
study are listed as:
Products and services: One of the primary reasons is the
products and services that Intel is producing at this moment.
Right now, Intel has only managed to manufacture one series
known as the Atom series in response to the ARM based
microprocessor. However, there is very little phone that are
using atom series in their smart phones, and with the growing
demand of smart phones and tablets in the market, Intel must
focus in this line of area as well and make sure they manage to
acquire some android, windows or iOS based platforms to use
their hardware
Ideas: The second and most needed factor that has led to this
particular case is the lack of innovative ideas. In this modern
age, where the world has shifted from industrial to a global age,
innovation is the essential component for the progression of any
company. Intel has managed to manufacture one of the most
powerful microprocessor in the PC market industry, but they
never tend to look forward and finding new market opportunity.
When smart phones and smart technology become the market
trend, Intel was far less behind in the race, and despite its
innovation and technology integrated in the PC
microprocessors, it was nowhere near the smart phones
microchips and processors.
Production: Intel has managed to create a well-established
production cell for PC microprocessor, chips and other
components. It has spent resources in order to maintain that
position, which might have led to shift from Research and
development towards production of components. As stated
above, the resourceful component is the company’s main
weapon, and it was production that led Intel the leading
microprocessor company in the world.
Recommended course of action:
The recommended courses of action are:

4. · To immediately enter the smart phone market and develop a
new phone series that have a better processing unit, and an
appealing design to compete with the other big guns like
Samsung, Google, LG and Apple. A quick start could imply an
acquisition of a smartphone/tablet company that allows Intel
enter the market with a completely new line of products. The
necessities and strategies to apply after this could be tackled
more effectively.
· Intel can undergo collaboration with many of the companies,
for-example, Google, to allow them to establish an android
based phone that has the android software and the Intel
hardware, creating a symbiosis. Intel can then use its massive
marketing channels to promote the phone among the commercial
masses throughout the world and see how they react to it.
· Last recommended course of action is to give up on the tablet
and smartphone industry and focus on re-establish a solid
position in the computer industry, investing in more R&D to
overcome competition (and potential new enters).
Strategic Alternatives:
The strategic alternatives can be devised by using the 4Ps
marketing mix in order to plan the best strategy for Intel to use
in their business operations. These are:
· Product & services: The ARM based microprocessor and
microchip specialized in smart phones and smart technology
that is being used in the majority of smartphones and tablets.
Intel must decide if focusing or not its manufacturing plan in
this product line as well. The company could tackle the entry to
the new industry by creating new smartphones or tablets, or by
providing more competitive components to other companies
such as Microsoft, or Huawei. Intel could develop more of the
Atom series and launch new phones based on these series. The
company may also decide not entering this market, and
therefore focus on improving what it already has to offer to

5. computers at this moment. Consolidating its position in the
computer industry can be a good choice to follow.
· Promotion: Intel has already enjoying a well-established
position in the PC market. Intel can use its promotional
channels to launch its new products and to gather the consumer
groups from other different corporations such as Apple or
Samsung.
· Place: Intel is a leading microprocessor company in the world,
there are no reservations to the where it should launch its new
products (whether if those new products are new phones and
tablets, chips for smartphones and tablets, or better processors
for computers), but on a safer side, Intel must set a direction
and based on the context start slow and limited, or enter the
market more aggressively.
· Pricing: Intel must hedge its prices to keep a competitive edge
over its steadily growing number of competitors. In all the
industries involved (computers, smartphones, tablets, and
chips), competition is high, and lower prices demark a
difference.
Implementation strategy:
The implementation strategy can be divided into four steps, as
constructed in the previous sections:
· Innovation: The first and foremost strategy that needs to be
implemented is improving the innovation and Research and
development sector of Intel, specifically in terms of smart
phone and smart technology. This will help in inventing new
technology that can be further used to develop Intel’s own smart
phone
· Product and services: Intel must develop a strategy to
immediately plan out the products and services that can be most
beneficial in the market. While retaining their PC market, Intel
must establish itself in the smart phone market as well
· Collaboration: Intel must collaborate with different companies
that are has a sufficient market share in the smart phone
industry that will allow Intel to enter in the market and then
grab consumer groups through that collaboration

6. · Promotion: Intel has always practiced a powerful marketing
campaign from the very start of its operation and it has led Intel
to grasp the number one spot in the market as well. It can use
the same channels to promote its product as well and let it
benefit the company by gaining new consumer groups.
Contingency Plan
The contingency plan is also based on the four steps of the
implementation strategy and to rate them as per their best and
worst plan scenario:
The worst-case scenario after applying the suggested strategies
could simply make Intel more innovative and provide (despite
of the not successful measurements applied) a new image. It
would also have to face costs of operations and R&D without
revenues after not being able to develop new products accepted
by the market, however, this R&D gives the company a new
edge to grow, once it decides if becoming more stable in the
computer’s industry or expand to tablets and smartphones
industry.
In the best-case scenario, however, Intel could recover its
strong position in, not only the computer industry, but also in
the new growing industry of smartphones and tablets, giving the
company a wider area of action and hence, more revenues.
The different aspects to take into consideration when
developing an action plan are:
· Innovation: (High) Innovation is the much-needed strategy for
Intel in order to come up with a design of a processor that can
outmatch the ARM processor. This will create new
opportunities and new market share for both smart phone
companies as well as consumer.
· Products: (Medium) By creating new range of products in
different market sectors, Intel can able to retain its market share
as well as consumer share and with that it can progress towards
more R&D products.
· Collaboration: (Medium) Collaborating and merger is an

7. important step for any industry towards rising threats and
competition. Since Intel is already far behind in the smart phone
industry, its best to collaborate with a certain company.
· Promotion: (Low) At this moment, promotion is the least
important strategy that needs to be implemented by Intel to gain
new consumer and market share.
Relevance to strategic management:
There are few strategic management terms that has been used in
this case study which are the innovation, positioning, and
research and development as part of strategy that needs to be
implemented by the Intel Company. The marketing mix that
draws the overall plan of the possible market Intel should focus
its operations in. Collaboration, acquisition and merger are
some of the economics and management elements that are used
to join operations of different companies with mutual objectives
and motives.
Intel must find its way, either entering the new market of
smartphones and tablets (by creating a new line of smartphones
and tablets, or developing new chips that can be taken
decisively in the industry), or re-establishing its position in the
computer industry to assure no new enters appear to gain market
share.
dsus4data/Album Sales.sav
dsus4data/Angry Pigs.sav
dsus4data/Angry Real.sav
dsus4data/Attitude.sav
dsus4data/Band Personality.sav
dsus4data/Beckham (1929).sav

8. dsus4data/BeerGogglesLighting.sav
__MACOSX/dsus4data/._BeerGogglesLighting.sav
dsus4data/Bernard et al. (2012).sav
dsus4data/Big Hairy Spider.sav
dsus4data/BigBrother.sav
__MACOSX/dsus4data/._BigBrother.sav
dsus4data/Board & Fritzon 2005.sav
dsus4data/Burnout.sav
__MACOSX/dsus4data/._Burnout.sav
dsus4data/Bushtucker.sav
__MACOSX/dsus4data/._Bushtucker.sav
dsus4data/Cat Regression.sav
dsus4data/Cats and Dogs.sav
dsus4data/Cats Weight.sav
dsus4data/Cats.sav
dsus4data/Catterplot.sav
dsus4data/Chamorro-Premuzic.sav
__MACOSX/dsus4data/._Chamorro-Premuzic.sav

9. dsus4data/Chat-Up Lines.sav
__MACOSX/dsus4data/._Chat-Up Lines.sav
dsus4data/Chick Flick (Mixed).sav
__MACOSX/dsus4data/._Chick Flick (Mixed).sav
dsus4data/chicken.sav
__MACOSX/dsus4data/._chicken.sav
dsus4data/ChickFlick.sav
dsus4data/Child Aggression.sav
__MACOSX/dsus4data/._Child Aggression.sav
dsus4data/CIr.sav
dsus4data/CIr.sps
*****************************************************
*******.
* Author: Andy Field, University of Sussex, UK .
*****************************************************
*******.
MATRIX.
GET n /VARIABLES = n
/MISSING=OMIT.
GET r /VARIABLES = r
/MISSING=OMIT.
COMPUTE z = 0.5*(ln((1+r)/(1-r))).
COMPUTE SEz = 1/sqrt(n-3).
COMPUTE zscore = z/SEz.
COMPUTE sigz = 2*(1-cdfnorm(abs(zscore))).

10. COMPUTE zrupper = z + (1.96*SEz).
COMPUTE zrlower = z - (1.96*SEz).
COMPUTE rlower =(exp(zrlower/0.5)-1)/(1+exp(zrlower/0.5)).
COMPUTE rupper =(exp(zrupper/0.5)-1)/(1+exp(zrupper/0.5)).
COMPUTE zCI = {r, rlower, rupper, zscore, sigz}.
print "*** 95% Confidence interval for r ***".
print zCI /TITLE = " r 95% Lower 95% Upper
z Sig".
END MATRIX.
__MACOSX/dsus4data/._CIr.sps
dsus4data/Coldwell et al. (2006).sav
dsus4data/condom.sav
__MACOSX/dsus4data/._condom.sav
dsus4data/Contrast.sav
__MACOSX/dsus4data/._Contrast.sav
dsus4data/Cosmetic Surgery.sav
dsus4data/Coulrophobia.sav
__MACOSX/dsus4data/._Coulrophobia.sav
dsus4data/Çetinkaya & Domjan (2006).sav
__MACOSX/dsus4data/._Çetinkaya & Domjan (2006).sav

11. dsus4data/Daniels (2012).sav
dsus4data/DarkLord.sav
__MACOSX/dsus4data/._DarkLord.sav
dsus4data/Davey(2003).sav
__MACOSX/dsus4data/._Davey(2003).sav
dsus4data/Depression.sav
__MACOSX/dsus4data/._Depression.sav
dsus4data/DepressionSyntax.SPS
MANOVA
before after BY treat(0 4)
/WSFACTORS time (2)
/CONTRAST (time)=special(1 1, 1 -1)
/CONTRAST (treat)=special (1 1 1 1 1, -4 1 1 1 1, 0 -3 1 1 1, 0
0 1 1 -2, 0 0 1 -1 0)
/CINTERVAL JOINT(.95) MULTIVARIATE(BONFER)
/METHOD UNIQUE
/ERROR WITHIN+RESIDUAL
/PRINT TRANSFORM HOMOGENEITY(BARTLETT
COCHRAN BOXM)

12. SIGNIF( UNIV MULT AVERF HF GG )
PARAM( ESTIM EFSIZE).
__MACOSX/dsus4data/._DepressionSyntax.SPS
dsus4data/DFBeta.sav
dsus4data/Diet.sav
dsus4data/Differences between dependent r.sps
*****************************************************
*******.
* Author: Andy Field, University of Sussex, UK .
*****************************************************
*******.
MATRIX.
GET rxy /VARIABLES = rxy.
GET rzy /VARIABLES = rzy.
GET rxz /VARIABLES = rxz.
GET n /VARIABLES = n.
COMPUTE diff = rxy-rzy.
COMPUTE ttest = diff*(sqrt(((n-3)*(1+rxz))&/(2*(1 - rxy**2 -
rxz**2 - rzy**2 + (2*rxy)*rxz*rzy)))).
COMPUTE sigt = tcdf(ttest,(n-3)).
COMPUTE output = {diff, ttest, sigt}.
print "*** Tests of Differences between Dependent Correlation
Coefficiants ***".
print output /TITLE = " Difference t Sig".
END MATRIX.

13. __MACOSX/dsus4data/._Differences between dependent r.sps
dsus4data/Display.SAV
__MACOSX/dsus4data/._Display.SAV
dsus4data/DownloadFestival.sav
dsus4data/Drug.sav
dsus4data/Dummy.sav
__MACOSX/dsus4data/._Dummy.sav
dsus4data/Eastenders.sav
__MACOSX/dsus4data/._Eastenders.sav
dsus4data/Eel.sav
dsus4data/Elephant Football.sav
dsus4data/Escape From Inside.sav
__MACOSX/dsus4data/._Escape From Inside.sav
dsus4data/EssayMarks.sav
__MACOSX/dsus4data/._EssayMarks.sav
dsus4data/Exam Anxiety.sav
dsus4data/Facebook.sav
__MACOSX/dsus4data/._Facebook.sav

14. dsus4data/Field (2006).sav
__MACOSX/dsus4data/._Field (2006).sav
dsus4data/Field&Hole.sav
__MACOSX/dsus4data/._Field&Hole.sav
dsus4data/fugazi.sav
__MACOSX/dsus4data/._fugazi.sav
dsus4data/Gallup et al.sav
__MACOSX/dsus4data/._Gallup et al.sav
dsus4data/Gelman & Weakliem (2009).sav
dsus4data/GlastonburyDummy.sav
dsus4data/GlastonburyFestival.sav
__MACOSX/dsus4data/._GlastonburyFestival.sav
dsus4data/GlastonburyFestivalRegression.sav
__MACOSX/dsus4data/._GlastonburyFestivalRegression.sav
dsus4data/Goat or Dog.sav
dsus4data/goggles.sav
dsus4data/GogglesRegression.sav
__MACOSX/dsus4data/._GogglesRegression.sav

15. dsus4data/GogglesSimpleEffects.SPS
glm Attractiveness by gender alcohol
/emmeans = tables(gender*alcohol)compare(gender).
__MACOSX/dsus4data/._GogglesSimpleEffects.SPS
dsus4data/grades.sav
__MACOSX/dsus4data/._grades.sav
dsus4data/Gueguen (2012).sav
dsus4data/Handlebars.sav
__MACOSX/dsus4data/._Handlebars.sav
dsus4data/HangoverCure.sav
dsus4data/Hiccups.sav
__MACOSX/dsus4data/._Hiccups.sav
dsus4data/Hill et al. (2007).sav
__MACOSX/dsus4data/._Hill et al. (2007).sav
dsus4data/HonestyLab.sav
dsus4data/Honeymoon Period Restructured.sav
__MACOSX/dsus4data/._Honeymoon Period Restructured.sav
dsus4data/Honeymoon Period.sav
__MACOSX/dsus4data/._Honeymoon Period.sav

16. dsus4data/Horoscope.sav
__MACOSX/dsus4data/._Horoscope.sav
dsus4data/Independent r.sav
__MACOSX/dsus4data/._Independent r.sav
dsus4data/Independent t from means.sps
COMPUTE df = n1+n2-2.
COMPUTE Diff = x1-x2.
COMPUTE poolvar = (((n1-1)*(sd1 ** 2))+((n2-1)*(sd2 **
2)))/df.
COMPUTE poolsd = sqrt((((n1-1)*(sd1 ** 2))+((n2-1)*(sd2 **
2)))/(n1+n2)).
Compute SE = sqrt(poolvar*((1/n1)+(1/n2))).
COMPUTE CI_Upper = Diff+(idf.t(0.975, df)*SE).
Compute CI_Lower = Diff-(idf.t(0.975, df)*SE).
COMPUTE d = Diff/poolsd.
COMPUTE t_test = Diff/SE.
COMPUTE t_sig = 2*(1-(CDF.T(abs(t_test),df))).
Variable labels Diff 'Difference between Means (X1-X2)'.
Variable labels SE 'Standard Error of Difference between
means'.
Variable labels poolsd 'Pooled SD'.
Variable labels d 'Effect Size (d)'.
Variable labels t_test 't statistic'.
Variable labels t_sig 'Significance (2-tailed)'.
Variable labels CI_Upper '95% Confidence Interval (Upper)'.
Variable labels CI_Lower '95% Confidence Interval (Lower)'.
Formats t_sig(F8.5).
EXECUTE .
SUMMARIZE
/TABLES= x1 x2 Diff CI_Lower CI_Upper df t_test t_sig d

17. /FORMAT=VALIDLIST NOCASENUM TOTAL LIMIT=100
/TITLE='T-test'
/MISSING=VARIABLE
/CELLS=NONE.
__MACOSX/dsus4data/._Independent t from means.sps
dsus4data/Infidelity.sav
__MACOSX/dsus4data/._Infidelity.sav
dsus4data/Invisibility Baseline.sav
dsus4data/Invisibility RM.sav
dsus4data/Invisibility.sav
dsus4data/Jiminy Cricket.sav
dsus4data/Johns et al. (2012).sav
dsus4data/Lacourse et al. (2001) Females.sav
__MACOSX/dsus4data/._Lacourse et al. (2001) Females.sav
dsus4data/Lambert et al. (2012).sav
dsus4data/LooksOrPersonality.sav
__MACOSX/dsus4data/._LooksOrPersonality.sav
dsus4data/lying.sav
dsus4data/Marzillier & Davey (2005).sav

18. __MACOSX/dsus4data/._Marzillier & Davey (2005).sav
dsus4data/Massar et al. (2011).sav
dsus4data/Matthews et al. (2007).sav
dsus4data/McNulty et al. (2008).sav
dsus4data/MenLikeDogs.sav
__MACOSX/dsus4data/._MenLikeDogs.sav
dsus4data/Method Of Teaching.sav
__MACOSX/dsus4data/._Method Of Teaching.sav
dsus4data/Miller et al. (2007).sav
__MACOSX/dsus4data/._Miller et al. (2007).sav
dsus4data/MixedAttitude.sav
__MACOSX/dsus4data/._MixedAttitude.sav
dsus4data/Murder.sav
dsus4data/Muris et al (2008).sav
__MACOSX/dsus4data/._Muris et al (2008).sav
dsus4data/Nichols & Nicki (2004).sav
__MACOSX/dsus4data/._Nichols & Nicki (2004).sav
dsus4data/OCD.sav

19. dsus4data/Ong et al. (2011).sav
dsus4data/Outliers (Percentage of Z-sc.textClipping
__MACOSX/dsus4data/._Outliers (Percentage of Z-
sc.textClipping
dsus4data/Oxoby (2008) MOA.sav
dsus4data/Oxoby (2008) Offers.sav
dsus4data/PBCorr.SAV
dsus4data/Penalty.sav
dsus4data/Penis.sav
__MACOSX/dsus4data/._Penis.sav
dsus4data/Perham & Sykora (2012).sav
dsus4data/Piff et al. (2012) Pedestrian.sav
dsus4data/Piff et al. (2012) Vehicle.sav
dsus4data/ProfilePicture.sav
dsus4data/psychology.sav
__MACOSX/dsus4data/._psychology.sav
dsus4data/pubs.sav
__MACOSX/dsus4data/._pubs.sav
dsus4data/RecodeGlastonburyData.SPS

20. DO IF (1-SYSMIS(change)).
RECODE music (3=1)(ELSE = 0) INTO Crusty.
RECODE music (2=1)(ELSE = 0) INTO Metaller.
RECODE music (1=1)(ELSE = 0) INTO Indie_Kid.
END IF.
VARIABLE LABELS Crusty 'No Affiliation vs. Crusty'.
VARIABLE LABELS Metaller 'No Affiliation vs. Metaller'.
VARIABLE LABELS Indie_Kid 'No Affiliation vs. Indie Kid'.
VARIABLE LEVEL Crusty Metaller Indie_Kid (Nominal).
FORMATS Crusty Metaller Indie_Kid (F1.0).
EXECUTE.
__MACOSX/dsus4data/._RecodeGlastonburyData.SPS
dsus4data/RovingEye.sav
dsus4data/Sage Editors Can't Play Football.sav
__MACOSX/dsus4data/._Sage Editors Can't Play Football.sav
dsus4data/SAQ (Item 3 Reversed).sav
dsus4data/SAQ.sav
dsus4data/Schützwohl(2008).sav
dsus4data/Shopping Exercise.sav
dsus4data/SimpleEffectsAttitude.sps
DATASET ACTIVATE DataSet2.
GLM beerpos beerneg beerneut winepos wineneg wineneut
waterpos waterneg waterneut
/WSFACTOR=Drink 3 Imagery 3
/EMMEANS = TABLES(Drink*Imagery) COMPARE(Imagery).

21. dsus4data/Sing or Guitar.sav
dsus4data/Sonnentag (2012).sav
dsus4data/Soya.sav
dsus4data/SPSSExam.sav
__MACOSX/dsus4data/._SPSSExam.sav
dsus4data/Stalker.sav
dsus4data/Superhero.sav
dsus4data/Supermodel.sav
__MACOSX/dsus4data/._Supermodel.sav
dsus4data/Tablets.sav
dsus4data/Tea Makes You Brainy 15.sav
dsus4data/Tea Makes You Brainy 716.sav
dsus4data/Teach.sav
__MACOSX/dsus4data/._Teach.sav
dsus4data/Text Messages.sav
__MACOSX/dsus4data/._Text Messages.sav

22. dsus4data/The Biggest Liar.sav
dsus4data/TOSSE-R.sav
__MACOSX/dsus4data/._TOSSE-R.sav
dsus4data/Transformations.SPS
COMPUTE logday1 = LG10(day1 + 1) .
COMPUTE logday2 = LG10(day2 + 1) .
COMPUTE logday3 = LG10(day3 + 1) .
COMPUTE sqrtday1 = SQRT(day1).
COMPUTE sqrtday2 = SQRT(day2).
COMPUTE sqrtday3 = SQRT(day3).
COMPUTE recday1 = 1/(day1+1).
COMPUTE recday2 = 1/(day2+1).
COMPUTE recday3 = 1/(day3+1).
EXECUTE .
__MACOSX/dsus4data/._Transformations.SPS
dsus4data/Tuk et al. (2011).sav

23. dsus4data/Tumour.sav
dsus4data/TutorMarks.sav
__MACOSX/dsus4data/._TutorMarks.sav
dsus4data/Viagra.sav
dsus4data/ViagraCovariate.sav
__MACOSX/dsus4data/._ViagraCovariate.sav
dsus4data/ViagraCovariateContrasts.sav
__MACOSX/dsus4data/._ViagraCovariateContrasts.sav
dsus4data/ViagraCovariateDummy.sav
dsus4data/Video Game Graphs.sav
dsus4data/Video Games.sav
dsus4data/Wii.sav
dsus4data/Williams.sav
__MACOSX/dsus4data/._Williams.sav
dsus4data/Zibarras et al. (2008).sav
operating system that ran on ARM chips, rather than
Intel chips, creating a potential threat to Intel’s core PC
business.

24. THE FOUNDATION
OF INTEL
Two executives from Fairchild Semiconductor, Robert
Noyce and Gordon Moore, founded Intel in 1968.
Fairchild Semiconductor was one of the leading semi-
conductor companies in the world and a key enterprise
in an area south of San Francisco that would come to
be known as Silicon Valley. Noyce and Moore were no
ordinary executives. They had been among the eight
founders of Fairchild Semiconductor. Noyce was gen-
eral manager at the company, while Moore was head
of R&D. Three years previously, Moore had articu-
lated what came to be known as Moore’s Law. He had
observed that since 1958, due to process improvements
the industry had doubled the number of transistors that
could be put on a chip every year (in 1975 he altered this
to doubling every two years).
Fairchild Semiconductor had been established in
1957 with funding from Sherman Fairchild, who had
backed the founders on the understanding that Fairchild
Semiconductor would be a subsidiary of his Fairchild
Camera and Instrument Corporation on New York. By
1968 Noyce and Moore were chaffing at the bit under
management practices imposed from New York, and
both decided it was time to strike out on their own. Such
were the reputations of Noyce and Moore that they were
able to raise $2.3 million to fund the new venture “in
an afternoon on the basis of a couple of sheets of paper
INTRODUCTION
In 2012 Intel was the leading manufacturer of micropro-
cessors for personal computers in the world, a position
that it had held onto for more than two decades. Over
80% of all personal computers sold in 2012 used Intel

25. microprocessors. The company reported revenues of
$53 billion and net profits of $11 billion. Meanwhile,
Intel’s only viable competitor, AMD, which in the early
2000s had been gaining share from Intel, lost $1.2 billion
on sales of $5.4 billion.
Despite its historic dominance, the future looked
uncertain for Intel. The rise of mobile devices had led
to a strong substitution effect, with sales of PCs fall-
ing as consumers switched to smart phones and tablets
for many of their computing needs. In the first quarter
of 2013, global PC sales fell 14% on a year over year
basis according to the research firm IDC. This was the
worst yearly decline since IDC started tracking PC sales
in 1994, and the fifth quarter in a row that PC sales had
fallen. At the same time, sales of smart phones and tab-
lets were booming. IDC predicted that sales of tablets
would grow almost 60% in 2013, and that tablet ship-
ments would exceed those of portable PCs.1
The crux of the problem for Intel is that most tablets
and smart phones used microprocessors that are based on
technology licensed from ARM Holdings PLC, a British
company whose chip designs are valued for their low
power consumption, which extends battery life. While
Intel has a line of chips aimed at mobile devices—the
Atom chips—microprocessors incorporating ARM’s
technology were found on 95% of smart phones in 2012
and over 30% of all mobile computing devices, a cate-
gory that includes tablets and PC notebooks.2 Moreover,
in 2012 Microsoft issued a version of its Windows 8
Case 11
Intel Corporation: 1968–2013
Charles W.L. Hill
School of Business, University of Washington

26. Seattle, WA 981095, June 2013
C-173
C-174 Case 11 Intel Corporation: 1968–2013
containing one of the sketchiest business plans ever
financed”.3
When business reporters got wind of the new ven-
ture, they asked Noyce and Moore what they were in-
tending to do, only to be greeted by vague replies. The
two executives, however, knew exactly what they were
going to do—manufacture silicon memory chips—they
just didn’t want potential competitors to know that. At
the time, sales of mainframe computers were expanding.
While these machines used integrated circuits to perform
logic calculations, programs and data were stored on
magnetic devices. Although inexpensive to produce, it
was relatively slow to access information on a magnetic
device. Noyce and Moore knew that if they could build
a silicon based integrated circuit that could function as a
memory device, they could speed up computers, making
them more powerful, which would expand their applica-
tions and allow them to shrink in size.
These memory chips were knows as dynamic ran-
dom access memories (DRAMs). While much of the
theoretical work required to design an integrated cir-
cuit that could function as a memory device had already
been done, manufacturing DRAMs cost efficiently had
so far proved impossible. At the same time, some key
research on manufacturing was being done at Fairchild.
This research included a technique known as metal oxide

27. on silicon, or MOS. Noyce and Moore wanted to mass-
produce DRAMs, and after looking at other possible
alternatives, they concluded that commercializing the
MOS research was the way to do it. This prompted some
cynics to note that Intel was established to steal the MOS
process from Fairchild.
ANDY GROVE
To help them, Noyce and Moore hired a number of re-
searchers away from Fairchild, including, most notably,
a young Hungarian Jewish émigré called Andy Grove. At
Fairchild, Grove had reported directly to Moore. At Intel
he became the director of operations with responsibility
for getting products designed on time and built on cost.
Through the force of his own personality, Grove would
transmute this position into control over just about ev-
erything Intel did, making him effectively the equal of
Noyce and Moore, long before he was elevated to the
CEO position in 1987.
Grove was an interesting character. Born in 1936, he
went into hiding when the Germans invaded Hungary dur-
ing World War II and managed to escape the Holocaust.
After WWII, the tyranny of the Germans was replaced by
the tyranny of the Soviets as Hungary became a satellite
state of the Soviet Union. In 1956, after the failure of an
uprising against the Soviet puppet government, Grove es-
caped across the border to Austria, and made his way to
the United States. He put himself through college in New
York by waiting on tables, and then went to UC Berkley
for graduate work, where he received a Ph.D. in chemical
engineering in 1963. His next stop was Fairchild, where
he worked until Moore recruited him away in 1968.
Over the next three decades, Grove would stamp his

28. personality and management style on Intel. Regarded
by many as one of the most effective managers of the
late twentieth century, Grove was a very demanding and
according to some, autocratic leader who set high ex-
pectations for everyone, including himself. He was de-
tail orientated, pushed hard to measure everything, and
was constantly looking for ways to drive down costs
and speed up development processes. He was known
for a confrontational “in your face” management style,
and would frequently intimidate employees, shouting at
those who failed to meet his expectations. Grove him-
self, who seemed to enjoy a good fight, characterized
this behavior as “constructive confrontation”. He would
push people to their limits to get things done. As he once
noted, “there is a growth rate at which everybody fails,
and the whole situation results in chaos. I feel it is my
most important function. . . . to identify the maximum
growth rate at which this wholesale failure begins”.4
Grove demanded discipline, insisting for example,
that everybody be at their desks at 8 a.m., even if they
had worked long into the night. He instituted a “late list”,
requiring that people who arrived after 8 a.m. sign in. If
people arrived late for meetings, he would not let them
attend. Every year he sent around a memo to employees
reminding them that Christmas Eve was not a holiday,
and that they were expected to work a full day. Known
as the “Scrooge memo”, many would be returned with
nasty comments scrawled over them. May you eat yellow
snow, said one. A very neat man, if people’s desks were
messy, Grove would publically criticize them. Accord-
ing to one observer, “Andy Grove had an approach to
discipline and control that made you wonder how much
he had been unwittingly influenced by the totalitarian re-
gime he had been so keen to escape”.5

29. Grove controlled managers through a regular budget-
ing process that required them to make detailed revenue
and cost projections. He also insisted that all managers
establish medium term objectives, and a set of key re-
sults by which success or failure would be measured.
Case 11 Intel Corporation: 1968–2013 C-175
company started in 1969 by Jerry Sanders, a former mar-
keting director at Fairchild. Sanders started his company
with the help several other Fairchild employees who
had not been recruited by Intel. Called Advanced Micro
devices, or AMD, the company found it tough to raise
capital until it received an investment from non other
than Robert Noyce, who saw something he liked in the
flamboyant Sanders.
Driven by constant pressure from Andy Grove,
whose “in your face” management style was bearing
fruit, albeit at some human cost, by October 1970 In-
tel succeeded in producing a DRAM chip, named the
1103, in relatively high yields (which implied that rela-
tively few chips had to be discarded). The 1103 could
store 1,024 bits of information (zeros or ones), which
was 4 times as much as the highest capacity semicon-
ductor memory device currently available. Since the
fixed costs required to establish a manufacturing facility
were very high, the key to making money on the 1103
was high yields and high volume. If Intel could achieve
both, unit costs would fall enabling Intel to make a lot
of profit at low price points. In turn, low prices implied
that DRAMs would start to gain wide adoption among
computer manufacturers.

30. The 1103 put Intel firmly on the map. The chip soon
became the memory technology of choice for computer
makers, and by the end of 1971, 14 out of the world’s
18 leading mainframe computer makers were using the
1103. However, Intel did not have the market entirely to
itself. Computer makers did not want to become depen-
dent upon a single source of supply for critical compo-
nents. To avoid this, most computer makers mandated
that components had to be at least duel sourced, and
for Intel, this meant that if it wanted business, it had to
license its technology to other companies. Intel first li-
censed the rights to produce the 1103 to a Canadian firm,
MIL, in exchange for an upfront payment and per unit
royalty fee. Before long, MIL was competing against
Intel in the market for the 1103, but MIL made a critical
mistake in their manufacturing processes, and it wasn’t
long before a stream of former MIL customers were
knocking on Intel’s door.
Along the way, Intel received an inquiry from two
disgruntled engineers at Honeywell, asking if Intel was
interested in building memory systems. The idea was to
mount thousands of 1103 chips on a circuit board that
could then be plugged into a mainframe computer to in-
crease its memory capability. Impressed by the idea, Intel
promptly hired the two engineers and set up a division to
do this. Before long, the new division was selling circuit
He instituted regular one-on-one meetings where perfor-
mance was reviewed against objectives, holding manag-
ers accountable for shortfalls. He also required monthly
management reviews where managers from different
parts of the company would meet to hear a presentation
of its current strengths, weaknesses, opportunities and
threats. The goal was to get managers to step back and
look at the bigger picture, and to encourage them to help

31. each other solve problems.
Grove would also practice management by walking
around, inspecting facilities and offices, demanding that
they be clean, something that earned him the nickname
“Mr. Clean”. He pushed the human resource department
to institute a standard system of ranking and rating that
had four performance categories; “superior”, “exceeds
expectations”, “meets expectations”, or “does not meet
expectations”. People were compared against others of
their rank. Pay raises and later, stock option awards were
based on these rankings.
Despite his autocratic style, Grove was grudgingly
admired within the company. He was a brilliant prob-
lem solver, a man with tremendous control of facts and
details, someone who was determined to master the
challenging technical projects that Intel was working
on. Moreover, while he drove everyone hard, he drove
himself harder still, thereby earning the respect of many
employees.
THE MEMORY CHIP
COMPANY
Making a DRAM using MOS methods proved to be
extremely challenging. One major problem—small
partials of dust would contaminate the circuits during
manufacturing, making them useless. So Intel had to de-
velop “clean rooms” for keeping dust out of the process.
Another was how to etch circuit lines on silicon wafers,
without having the etched lines fracture and break as
the wafer was heated and cooled repeatedly during the
manufacturing process. The solution to this problem,
identified by Moore, was to “dope” the metal oxide with
impurities, making it less brittle. Intel subsequently
went to some lengths to keep this aspect of the manu-

32. facturing process secret from competitors for as long as
possible.
Intel, of course, was not alone in the race to develop a
commercial process for manufacturing DRAMs. Among
the potential competitors was another semiconductor
C-176 Case 11 Intel Corporation: 1968–2013
inventors of the DRAM, wondered if it might not make
more sense to build a miniaturized general purpose com-
puter, which could then be programmed to do the arith-
metic for the company’s calculator.
The project was given to Federico Faggin, an Italian
engineer who made some of the basic breakthroughs on
MOS technology while working at Fairchild. Although
the Japanese company subsequently decided not to
build the calculator, Intel pushed ahead with the project.
Faggin, who worked 12 to 14 hour days for weeks on end,
produced several prototypes in short order. (A source of
irritation for Faggin was that despite the long hours, his
boss, following Grove’s lead, constantly complained that
Faggin was late for work!)
Due to Faggin’s efforts, by November 1971 Intel had
its third product, the 4004 microprocessor. In an article
in Electronic News that accompanied its introduction,
and which described the 4004 as a computer on a chip,
Gordon Moore heralded the 4004 as “one of the most
revolutionary products in the history of mankind”. No
one paid much attention. People in the computer indus-
try viewed the 4004 as a fascinating novelty. Although
small and cheap, it could only process 4 bits on informa-

33. tion at a time, which made it slow and thus unsuitable for
use in the computers of the time. The 4004 was followed
by the 8008 microprocessor, which could process eight
bits of information at a time. Although faster, it too was
a product in search of a market. In an attempt to speed
adoption, Intel started to sell development tools that
made it easier and faster for outside engineers to develop
and test programs for new microprocessors. Slowly the
microprocessor began to make inroads into the computer
industry, primarily in peripherals such as printers and
tape drives.
THE PERSONAL
COMPUTER REVOLUTION
By the mid 1970s and embryonic new industry was ap-
pearing, the personal computer industry. A company
called MITS based in Albuquerque, New Mexico pro-
duced the first true personal computer. The MITS Altair
used an Intel 8080 microprocessor, which was priced at
$360. The first program offered for sale with the Altair
was a version of the BASIC programming language,
written by Bill Gates and Paul Allen, and designed to
run on the 8080. The two had moved to Albuquerque to
boards to customers running IBM mainframes. This was
something of a coup: IBM would not even consider buy-
ing the 1103, and had started making its own memory
chips. Now Intel had access to a formerly closed market
that accounted for 70% of all memory sales.
Around the same time, an accidental discovery at
Intel led to a second product line—erasable program-
mable read only memory (EPROM). Read only memory
chips (ROM) were finding wide applications in comput-
ing. ROM had desired data, a program for example, per-
manently burnt into its circuits. ROM was used to store

34. programs, such as a machine operating system, or part
of that system. The troubling thing about ROM is that
if an engineer made a mistake in programming the chip,
he would have to burn another chip, which was a pains-
taking and time consuming process. While exploring the
reason for failure of 1103 chips in the manufacturing
process, Dov Froham, another ex Fairchild researcher at
Intel, found that the cause was that some of the “gates”
inside the chips had become disconnected; they were
floating. Froham realized that this flaw in the 1103 had
a potential use; it might enable an engineer to design a
ROM chip that could be programmed with ease in a few
minutes. Moreover, he found that the data on such chips
could be erased and rewritten by shinning an ultra violet
light on it and the EPROM was born.
Engineers loved the EPROM chip, and once Intel
solved the manufacturing problem and started to produce
EMROM chips in large quantities, demand surged. Bet-
ter still, for two years Intel had a virtual monopoly on the
product. While other companies tried to produce similar
chips, they were unable to solve the manufacturing prob-
lems, enabling Intel to charge a relatively high price for a
product whose cost was falling every day with advances
in cumulative volume.
THE BIRTH OF THE
MICROPROCESSOR
By 1971 Intel had already created two revolutionary in-
novations in the semiconductor industry, the DRAM and
the EPROM chips. A third, the microprocessor, was also
created that year. The microprocessor was born out of an
inquiry from a Japanese company. The company asked
Intel if it could build a set of eight logic chips to perform
arithmetic functions in a calculator it was planning to
produce. Intel took on the project. Ted Hoff, one of the

35. Case 11 Intel Corporation: 1968–2013 C-177
executives were desperate to get their hands on an op-
erating system in order to get the IBM PC to market on
time, negotiated a nonexclusive license with IBM.
Executives at Intel, who by now had realized that
IBM was developing a personal computer, were pro-
foundly unimpressed with the choice of MS-DOS and
Microsoft. After a visit to Microsoft, one Intel executive
noted: “These people are flakes. They’re not original,
they don’t really understand what they are doing, their
ambitions are very low, and it’s not really clear that they
have succeeded even at that.”6 For its part, Microsoft
had to produce a version of MS-DOS that would run on
the Intel microprocessor. From now on, like it or not,
Microsoft and Intel would be joined at the hip.
Introduced in 1981, the IBM PC was an instant
success. To stoke sales, IBM offered a number of ap-
plications for the IBM PC that were sold separately, in-
cluding a version of VisiCalc, a word processor called
EasyWriter, and well-known series of business programs
from Peachtree Software. Over the next two years, IBM
would sell more than 500,000 PCs, seizing market lead-
ership from Apple. IBM had what Apple lacked, an abil-
ity to sell into corporate America.
As sales of the IBM PC mounted, two things hap-
pened. First, independent software developers started to
write program to run on the IBM PC. These included
two applications that drove adoptions of the IBM PC:
word processing programs (Word Perfect) and a spread

36. sheet (Lotus 1-2-3). Second, the success of IBM gave
birth to clone manufacturers who made “IBM compat-
ible” PCs that also utilized an Intel microprocessor and
Microsoft’s MS-DOS operating system. The first and
most successful of the clone makers was Compaq,
which in 1983 introduced its first personal computer, a
28-pound “portable” PC. In its first year, Compaq booked
$111 million in sales, which at the time was a record for
first year sales of a company. Before long, a profusion of
IBM clone makers entered the market, including Tandy,
Zenith, Leading Edge, and Dell Computer. This entry led
to market share fragmentation in the PC industry.
By 1982, Intel had a replacement chip ready for the
IBM PC, the 80286 microprocessor. The 80286 was des-
perately needed since the 8088 was painfully slow run-
ning some of the newer applications. IBM introduced a
new PC, the AT, to use the 80286 chip, and priced it at a
premium. Demand was so strong that IBM put the AT on
allocation, which opened the door to clone makers, par-
ticularly Compaq. By now, 70% of the microprocessors
sold to PC manufacturers were made by Intel, with AMD
be near to MITS, and they had established a company of
their own, Microsoft. The Altair was sold primarily to
hobbyists who wanted to write computer code at home
(for which Microsoft Basic came in handy).
In short order, a number of companies sprung up
making personal computers. The most successful of the
early companies was Apple Computer, which introduced
its revolutionary Apple II in 1977. By this time, a num-
ber of other companies were also producing micropro-
cessors, including Motorola, whose processor Apple
used in the Apple II. The Apple II was a big commercial
success, in no small part because it was easy to use for,

37. and because one of the most successful early programs,
a spreadsheet called VisiCalc, was written to run on the
Apple II.
The commercial success of the Apple II got the
world’s largest computer company, IBM, to take the
nascent personal computer seriously. IBM started to de-
velop its own personal computer in 1979 in a top-secret
project. To speed the product to market, IBM took a mon-
umental strategic decision—it decided to use “off the
shelf components” to build the PC rather than develop
everything itself, which had been the norm at IBM. Orig-
inally the company planned to use a microprocessor from
Motorola and an operating system called CP/M from a
company called Digital Research. However, Motorola
was late developing its product, and Digital Research’s
CEO, Gary Kildall, proved to be difficult to work with.
Casting around for alternatives, IBM contacted Intel,
offering to purchase it’s latest microprocessor, the 8088,
which was a derivative of Intel’s 8086 chip. However,
IBM did not tell Intel what the microprocessor was to be
used for (originally Intel was told that it was to go in a
printer). As part of the deal, IBM insisted on alternative
sources for the 8088. Reluctantly Intel allowed AMD
and a number of other companies to produce the 8088
under license. A 1982 cross licensing agreement with
AMD, which gave AMD the right to produce the 8088
chip, would come to haunt Intel for years to come.
For the operating system of its first PC, IBM decided
to use MS-DOS, a Microsoft operating system. Origi-
nally developed by Seattle Computer, and called Q-DOS
(which stood for quick and dirty operating system),
Q-DOS was purchased by Microsoft for $50,000 when
Bill Gates heard that IBM was looking for an operating
system. Gates renamed the product, and quickly turned

38. around and licensed MS-DOS to IBM. In what was to be
a stroke of genius that had enormous implications for the
future of all parties involved, Gates, sensing that IBM
C-178 Case 11 Intel Corporation: 1968–2013
Faced with this bleak prospect, Intel’s senior manage-
ment had to decide whether to continue to compete in the
DRAM business, the market they had created, or to focus
resources on the more profitable microprocessor market.
It was not an easy decision. Irrespective of the econom-
ics, there was enormous emotional attachment within the
company to the DRAM business. Many at Intel wanted
to build a 1 M DRAM. There were also valid arguments
for staying in the DRAM business. Some thought that
DRAMs were the technology driver in semiconductor
manufacturing, and without the knowledge gained from
making DRAMs, Intel’s microprocessor business would
suffer. In addition, there was the argument that custom-
ers would prefer to buy from a company that offered a
full product range, and if it exited the DRAM business
Intel would not be able to do that.
As Andy Grove describes it, a crucial point arrived
when he and Gordon Moore were discussing what
Intel’s strategy should be. Grove asked Moore, “If we
got kicked out, and the board bought in a new CEO, what
would he do?” Moore’s reply, “he would get us out of
memories”. Grove then said, “why don’t we just walk
out of the door, and come back and do it ourselves.” It
was one thing to make the decision, another to imple-
ment it. Grove removed the head of the DRAM division,
recognizing that he was not the man to wield the ax,
and replaced him with another manager, who promptly

39. “went native” and started to argue for going ahead with
the 1 megabyte DRAM chip. He too was replaced, and a
year after the decision was made, Intel finally exited the
DRAM business.
THE MICROPROCESSOR
BUSINESS
In 1987 Gordon Moore stepped down as CEO of Intel,
passing the torch on to Andy Grove, although Moore re-
mained as Chairman. Grove, who held the CEO position
through until 1998, and was then chairman until 2005,
had no intention of letting Intel’s dominance in micro-
processors go the same way as its DRAM business.
Chip Design
By now, it was well understood at Intel that the market
had an unquenchable thirst for more powerful micro-
processors. Software was advancing rapidly, with new
accounting for a significant portion of the remainder. For
the 80286, Intel had cut the number of licenses down to 4.
It also ran an intensive marketing and sales campaign,
called Checkmate, which was successful in getting
many Original Equipment Manufacturers (OEMs) to use
Intel’s version of the 80286 in their machines.
THE DRAM DEBACLE
In 1984 Intel booked revenues of $1.6 and made almost
$200 million net profit, up from $134 million in revenues
and $20 million in net profit a decade earlier. The growth
had been dramatic. However, Intel’s share of the DRAM
market had been sliding for years. New entrants, particu-
larly from Japan, had been grabbing ever more DRAM
sales. They had done this by undertaking large scale
investment to build efficient fabrication facilities (fabs)
and paying meticulous attention to quality and costs, do-

40. ing everything possible to drive up yields. One source
suggested that while peak yields and U.S. DRAM plants,
such as Intel’s, were around 50%, in Japan they were
closer to 80%. This translated into a huge cost advantage
for the Japanese producers.
The American manufacturers, Intel included, had
made the crucial mistake of underestimating the Japa-
nese threat. Demands from computer companies for
second sources had helped to facilitate diffusion of
the underlying product technology and commoditized
DRAMs. In such a market, advantage went to the most
efficient, and this was the Japanese. Moreover, Japanese
companies seized the lead in developing more power-
ful DRAM chips. While Intel had created the market for
DRAMs, and dominated the market for 1K chips, in each
subsequent generation it fell further and further behind.
By 1983 when fifth generation 256K DRAMs started to
appear, Intel was a year behind in the development cycle
and as a consequence, was at a distinct cost disadvantage
when it introduced its product.
Somehow, despite Grove’s aggressive leadership,
Intel’s share had fallen to only 1% of the total DRAM mar-
ket. To regain market share, management understood that
Intel would have to build a new fabrication facility, at a
cost of $600 million, and throw company R&D resources
behind an effort to bring a next generation 1 megabyte
DRAM chip to the market. To make matters worse, the
DRAM market was in a big slump, bought on by over-
capacity as a result of aggressive investments by Asian pro-
ducers, and Intel was losing money in the DRAM business.
Case 11 Intel Corporation: 1968–2013 C-179

41. building two or four processors into a chip. Intel prices
new chips at a premium then drops prices as manufac-
turing yields improve. It is not unusual to see prices
drop by 30–50% in one year.
By continually increasing the performance of its
chips, Intel was able to vanquish several potential com-
petitors, including a series of fast chips from AMD in the
early 2000s, and several chips based on an architecture
known as reduce instruction set computing, or RISC, that
during the 1990s seemed to threaten Intel’s market domi-
nance. One notable RISC chip arose out of an attempt
by Apple, Motorola and IBM to seize momentum away
from Intel with a RISC processor called the PowerPC.
However, few companies outside of Apple adopted the
processor. The limited volume meant high costs, which
were further compounded by manufacturing problems
at Motorola, and the PowerPC never gained wide ac-
ceptance. In 2006, Apple effectively killed the PowerPC
when it announced that it would henceforth use Intel mi-
croprocessors in its machines.
Following Moore’s law, successive generations of
Intel chips have used ever-smaller micron geometries to
cram ever more transistors on a chip. Intel’s 8088 chip,
introduced in 1979, had 29,000 transistors, the i486 chip,
introduced in 1989, had 1.2 million transistors, and by
2012, its most powerful PC chips contained 1.48 billion
transistors. By 2012 Intel was working with such small
sub micro geometries that more than 100 million tran-
sistors could fit onto the head of a pin! Compared to its
original 4004 chip introduced in 2012, the chips Intel
was producing in 2012 ran 4,000 times as fast and each
transistor used 5,000 times less energy, while the price
per transistor had dropped by a factor of 50,000. Driving

42. forward chip design and production requires very heavy
R&D spending. By 2012, Intel was spending over
$10 billion a year on R&D, or 19% of sales. This was
split between spending on chip design, and spending on
improving manufacturing processes.
Manufacturing Processes
Designing and manufacturing these devices requires
constantly pushing against the limits of physics and tech-
nology. Microprocessors are built in layers on a silicon
wafer through various processes using chemicals, gas
and light. It is an extremely demanding process involving
more than 300 steps and, on modern chips, 20 layers are
connected with micro circuitry to form a complex three-
dimensional structure. Intel is pushing the frontiers of sub
applications becoming available all the time. Running
these applications quickly required more computing
power, and users were willing to pay a premium for this.
Intel knew that consumers would only be too happy to
replace their old PCs with better, faster machines. It thus
became critical to develop and introduce newer micro-
processors. At the same time, the market demanded
backward compatibility. The new machines had to run
older software, and this implied that each new genera-
tion of chip should be able to run older programs. This
requirement implied that too a degree, Intel was locked
into the microprocessor architecture that had started with
the 8086 (from which the 8088 was derived), and con-
tinued with the 80286. The next microprocessor in what
was now known as the x86 architecture was the 80386,
or i386 for short.
First introduced in October 1985, i386 was a 32-bit
microprocessor that was much faster than the i286.
Intel had been trying for over a year to get IBM to intro-

43. duce a machine based on the i386, but IBM seemed to
be dragging its feet. The problem for IBM was that an
i386 PC would be very close in power to minicomputers
that IBM was making a lot of money on. Fearing that
i386 machines would cannibalize its product line, IBM
seemed to want to keep the i386 of the market as long as
possible. At the same time, Apple computer had intro-
duced a new machine, the first Macintosh, which used a
Motorola microprocessor. The Apple Mac was the first
computer with a graphical user interface and a mouse.
As it started to gain market share, Grove feared that the
market might switch to the Apple standard, making it
more critical than ever to get i386 based machines on
the market.
Intel had an ally in Compaq Computer. In 1986,
Compaq took advantage of IBM’s sloth to be the first
to introduce a PC built around the i386. Compaq seized
the lead from IBM, other computer makers quickly
followed, and from then on, IBM started to lose influ-
ence and share in the PC business. As the high margin
i386 chip gained traction, Intel’s sales exploded, hitting
$2.9 billion in 1988, while profits surged to $450 million.
Over the next two decades Intel continued to drive
the industry forward with regular advances in its x86
architecture. These included the i486 (introduced in
1989), the first Pentium chip (1993), The Pentium Pro
(1995), various derivatives of the Pentium Pro architec-
ture, and more recently, its 64-bit Core 2 Duo and Quad
processor line, first introduced in 2006. The latest Intel
processors have pushed the limits of performance by
C-180 Case 11 Intel Corporation: 1968–2013

44. even a microscopic piece of dust can contaminate a chip,
the specifications that Intel works to are extremely de-
manding and tight. Over time, Intel has turned yield im-
provement into a precise science. With each succeeding
generation of microprocessor geometry, the company
seems able to achieve a steeper learning curve. By con-
stantly pushing out the envelop with regard to manufac-
turing technology, product design, and yields, Intel has
reportedly been able to reduce its unit manufacturing
costs for a processor by as much as 25–30% a year.
Typically, Intel will refine new manufacturing pro-
cesses in one factory, perfecting yields and reducing
costs, and then transfer those processes to other facilities.
To do this, it relies upon a methodology known as “Copy
Exactly!” Under this methodology, engineers spend up
to four years perfecting a new manufacturing technique
in one of Intel’s development factories in Hillsboro
Oregon. Once they are satisfied with the results, they
work to meticulously import every last detail to other
factories around the world. Engineers strive to duplicate
even the subtlest of manufacturing variables, from the
color of a worker’s gloves to the type of fluorescent lights
in the building. Employees from around the world spend
more than a year at the development factory, learning
their small piece of the new recipe so they can bring it
back to their home factory. The idea is to capture the
infinite number of intangibles that have allowed a pro-
cess to succeed in plants that have already brought it
online. According to one Intel manager: “It’s not just
there’s a specification or a recipe or a program you put
into a machine. It also is what the human being does and
how they interact with the machine.”7
The extremes to which Intel engineers go to control

45. the precise conditions in its dozen or so factories has be-
come legendary. A few years ago Intel engineers were
trying to figure out why one plant in Arizona wasn’t
hitting the benchmarks achieved at another in Oregon,
where the processes were first developed. Then it hit
them: Arizona’s desert air was so much drier than the air
in Portland, and the engineers in Arizona were skipping
several steps taken in Oregon to dehumidify. Intel scien-
tists theorized that the dehumidifying, besides removing
water, also eliminated impurities such as ammonia.
So engineers began adding water vapor to the air in the
Arizona foundry, essentially making Portland air, and then
subjected it to the same dehumidifiers used in Oregon.
It worked! According to one engineer, this “shows the
level of things you’ve got to worry about when you try to
make something as complex as the chips we make.”8
micron geometry. The company is currently is produc-
ing transistors that measure just 22 nanometers, whereas
most other semiconductor manufacturers are still making
45 nm or 32 nm chips (a nanometer is one billionth of a
meter). Intel newest factory in Arizona, designed to come
on line in 2014, will push this frontier still further making
chips that have just 14 nm geometry. To carve features this
small on a silicon chip, Intel uses a technique known as
extreme ultra violet lithography. This is a way of printing
circuit patterns onto silicon chips that goes beyond lasers
and lenses, and utilizes xenon gas and microscopic reflec-
tors. If it sounds incredibly complex and esoteric, this is
because it is at the leading edge of what is scientifically
possible. Indeed, each new generation of Intel chips relies
upon pushing processes beyond what was attainable just
a few years earlier.
So complex is the manufacturing process, that the
high tech fabrication plants, or foundries, required to

46. make microprocessors cost up to $5 billion each. By
2012 Intel had 16 of these plants around the world. Too
equip its plants, Intel works very closely with equipment
vendors. Due to its scale, Intel enjoys considerable lever-
age over equipment suppliers. In some cases, Intel will
design a new machine itself, and then have equipment
vendors manufacture it. In others, Intel works closely
with the vendors on the design of a piece of equipment.
As a result, Intel itself holds hundreds of patents relat-
ing to the processes for manufacturing semiconduc-
tors. Whenever equipment is developed specifically for
Intel’s requirements, vendors are generally prohibited
from selling that equipment to other companies, such as
AMD, for a given period.
When installing new equipment, the goal is to gain
manufacturing efficiencies through increased yields, or
other process improvements. For example, in the 2000s
Intel switched from using 200 mm to 300 mm wafers in
its manufacturing processes. The larger wafers allowed
Intel to put more microprocessors on each, increasing
throughput and significantly lowering costs. Intel is
currently working to develop the commercialization of
450 mm wafers and is forecasting that it will start to
make microprocessors on 450mm wafers by 2016/2017.
If it can achieve this, it will be the first in the world to do
so. This may give Intel an advantage in manufacturing
efficiencies that will be very hard for other chipmakers
to match.
To boost yields, raising the percentage of processors
that come of the line operating perfectly, Intel uses so-
phisticated statistical process control procedures. Since

47. Case 11 Intel Corporation: 1968–2013 C-181
trademark, and competitors like AMD could not use it.
However, in 1991 a court had ruled that the name “386”
was so widely used that it had become generic. The rul-
ing infuriated Grove, who believed that clone makers
would now be able to piggyback on Intel’s marketing
campaigns for the 386 and 486. He then made the sug-
gestion that the next chip, which was to have been known
as the i586, be given another name that could be trade-
marked, and the Pentium was born.
Forward Vertical Integration
and Customers
Intel vertically integrated forward into the produc-
tion of PCs in the mid 1980s, selling “boxes” without
a screen, keyboard, or brand logo to well known com-
puter companies who put there own brand on them and
resold them. The move led to complaints from several
of Intel’s customers, who felt that Intel was indirectly
competing against them in the end market and lowering
barriers to entry into the PC industry. After push back, in
the early 1990s Intel exited this business. However, the
company continued to make motherboards, which are
large printed circuit boards that hold the microproces-
sors, other critical chips, slots for connecting memory
and graphics cards, and so on.
Intel’s move into motherboards assured more rapid
diffusion of each new generation of chips by making it
much easier for PC companies to incorporate those chips
into their machines. The move infuriated PCs manufac-
turers such as Compaq and IBM who generally made
their own motherboards. Compaq had been able to gain
a competitive advantage by bring PCs containing the lat-
est generation Intel chips to market early. Compaq re-

48. sponded by trying to reduce their dependence on Intel.
They used for chips from AMD and initially refused to
participate in the Intel inside branding scheme. However,
by the mid 1990s Intel’s position was so strong that this
had only marginal impact on the company.
Intel continued to make motherboards through the
2000s, even though profit margins were lower than on
sales of stand-alone microprocessors. By 2007 some
24% of Intel’s revenues came from the sale of mother-
boards. At this point, large branded OEMs with a global
reach (HP, Dell, Lenovo, Acer, Toshiba and Apple),
accounted for about 50–53% of global PC sales, with
the remainder being captured by a long tail of smaller
local brands. As of 2012, some 18% of Intel’s total sales
(stand alone chips and motherboards) went to Hewlett
Intellectual Property
From the i386 chip onwards, Grove was determined to
ensure that Intel was the only supplier in the world of
its architecture. AMD, however, believed that under the
terms of the 1982 technology sharing agreement be-
tween the two companies, it had rights to Intel’s designs.
Intel simply refused to hand over technical specifications
for the i386 to AMD, sparking off a lengthy court battle
between the two that persisted until 1995. In the end,
the two chipmakers agreed to drop all pending lawsuits
against each other, settled existing lawsuits, and signed
a cross-licensing agreement. Irrespective of the final set-
tlement, AMD had spent $40 million a year on legal fees
alone. Senior management attention had been diverted
by the ongoing legal battle. AMD had been slow to de-
velop its own version of the i386, waiting instead to get
specifications from Intel, which Intel only shared after
ordered to in a 1990 ruling.

49. Intel Inside
For years, Intel had viewed its customers as original
equipment manufacturers, focusing its marketing efforts
on engineers within those companies. But the nature of
the end market was changing. By the early 1990s in-
creasingly sophisticated customers were making their
own purchasing decisions, often in computer super-
stores, or buying direct from companies like Dell and
Gateway. Consumers now had influence on the process,
and could exercise choice over not just the machine,
but also the components that went into it, including the
microprocessor.
In 1991, Intel started to market directly to consumers
with its Intel Inside campaign, effectively telling them
that a computer with an Intel chip inside would guarantee
advanced technology and compatibility with prior soft-
ware. Supported by slick advertisements, the campaign
was a stunning success. Within a year, Intel was listed
as the third most valuable brand name on the planet.
In 1993 Grove was able to claim that the number of
consumers who preferred a PC with an Intel micro-
processor had risen from 60 to 80%. By 1994, some
1,200 computer companies had signed on to the cam-
paign, adhering “Intel Inside” logos on their machines,
or including the logo on their product ads.
Complicating matters, one aspect of the long run-
ning legal battle between Intel and AMD was a trade-
mark dispute. Intel had claimed that “386” referred to its
C-182 Case 11 Intel Corporation: 1968–2013
operating system that would run on ARM processors. For

50. Microsoft, this was a logical move given its strategy of
having Windows 8 run on all devices, including tablets
and smartphones where the low power consumption of-
fered by ARM processors was highly valued. Microsoft
reportedly made the decision to produce an ARM ver-
sion of Windows 8 because Intel’s atom processor con-
sumed too much power to make it a compelling choice in
tablets. The move opened the door for PC manufacturers
to start building machines that ran on none Intel chips.
THE BARRETT ERA
In 1998 Craig Barrett succeeded Andy Grove as CEO.
A former Stanford engineering professor who had become
chief operating officer of Intel in 1993, Barrett’s tenure as
CEO was market by an aggressive push into new markets.
By the 1990s the Internet was starting to take center place
in computing, and Barrett saw opportunities in extending
Intel’s reach into chips to drive computer networking gear
and wireless handsets. Moreover, Barrett was concerned
that without product diversification, Intel would not be
able to maintain its growth rate given the maturation of
the PC market in many developed nations. In his first three
years as CEO Intel spent some $12 billion on acquisitions
and internal new ventures designed to strength the com-
pany’s position in these emerging areas.
Barrett’s push into these areas failed to yield any
quick returns. By 2004 Intel only had 6% of the market
for chips used in networking gear, and 7% of the market
for processing chips within wireless phones. Part of the
problem; Intel ran into stiff competition from embedded
competitors. In the market for wireless phone chips, for
example, Intel was competing against the likes of Texas
Instruments and Qualcomm, both of whom had a strong
market and technological position.

51. Moreover, Barrett’s tenure was marred by some em-
barrassing product delays, capacity constraints that drove
some customers to AMD, and product recalls. To make
matters worse, in the early 2000s AMD seized the lead
in chip design for the first time, and for two years AMD
could boast that it was technological leader in the industry
until Intel recaptured the lead with newer chips. Compli-
cating matters, the PC industry went through a sharp con-
traction in 2001 that led to slumping sales and profits for
Intel. While the industry recovered in 2002, growth rates
since 2002 have been lower than in the 1990.
Packard. Dell Computer accounted for another 14% and
Lenovo for 11%.
The Microsoft Connection
Throughout the 1980s and much of the 1990s, the re-
lationship between Intel and Microsoft, was an uneasy
one. When Microsoft introduced Windows 3.0 in 1990,
its first operating system with a graphical user interface,
it boosted demand for new PCs to run graphics heavy
programs. The same happened when Windows 95 was
introduced five years later. In both cases, Intel was a
beneficiary of the resulting upgrade cycle. Intel clearly
needed Microsoft, but that did not mean that they re-
spected the company. Intel was frustrated that Microsoft
did not seem particularly interested in optimizing their
software to run on Intel’s chips. Microsoft’s engineers
seemed more concerned with adding features to their
products, than in streamlining code so that it took advan-
tage of the full capabilities of Intel’s microprocessors.
Microsoft, one the other hand, was interested in
making its Windows operating system as ubiquitous as
possible, and that logically implied making a version of
Windows that would run on other microprocessors, such

52. as the new generation of RISC chips. During the 1990s
Microsoft was eyeing users of powerful computer work-
stations, many of which used RISC chips. This was a
potential nightmare for Intel, and it became all to real
when Microsoft announced the development of Win-
dows NT, a high end version of Windows that would run
on both Intel and RISC microprocessors, including the
PowerPC. What stopped the nightmare from occurring
was the development of the Pentium Pro, which was so
fast and efficient that it effectively eclipsed rivals who
used RISC architecture.
Reflecting these underlying tensions, relationships
between Andy Grove and Microsoft’s Bill Gates were
often rocky, and there were reports of meetings dissolv-
ing into shouting matches. This started to change in the
mid 1990s. It may have been that after the failure of the
RISC challenge to Intel, the two companies, and their
respective leaders recognized their interdependence and
decided that cooperation was better than conflict. Be-
ginning in 1996, quarterly meetings were held between
Grove and Gates, aimed at coordinating strategy and re-
solving differences.
In 2012 new cracks began to appear in the symbi-
otic relationship between Microsoft and Intel when
Microsoft introduced a version of its Windows 8
Case 11 Intel Corporation: 1968–2013 C-183
this platform for their laptops and Centrino quickly be-
came a recognizable brand.
Introduced in 2003, the Centrino was a huge hit,

53. and helped to pull Intel out of its sales slump. Indeed,
by the late 2000s Intel was dominating the market for
lap top chips with its chipset offerings. Upon succeed-
ing Barrett, Otellini called for the Centrino strategy to
be applied to other areas of the computer industry. He
wanted Intel to design separate “platforms” for corpo-
rate computers, home computers and lap top computers.
Each platform was to combine several chips, and
focus on providing utility to a specific customer set.
The platform for corporate computers was to package
a microprocessor with chips and software that enhance
the security of computers, keeping them virus free,
and allow for the remote management and servicing
of computers (which could bring large cost savings to
corporations). The platform for home computers was
to combine a microprocessor with chips and software
for a wireless base station (for home networking), chips
for showing digital movies, and chips for three dimen-
sional graphics processing (for computer games).
The goal was to enable Intel to capture more of the
value going into every computer sold and that should
increase the company’s profitability and profit growth.
To implement this plan, Otellini announced a sweeping
reorganization of Intel, creating separate market focused
divisions for mobile computing (lap tops), corporate
computing, home computing, and health care comput-
ing (which Intel regarded as a promising growth market
with its own unique set of customer requirements). Each
division has its own engineering, software and marketing
personnel, and is charged with developing a platform for
its target market.
To further the strategy of capturing more value going
into every computer sold, Intel moved into the graph-
ics chip business, integrating graphics capabilities into

54. its chipsets. Although Intel gained some share at the
low end, ATI and Nvidia currently dominate the high-
end graphics chip business. The most important and
demanding applications for graphics chips are computer
games. In 2006, AMD purchased ATI for $5.4 billion,
signaling its intention to bundle both microprocessors
and graphics chips together.
In mid 2008 Intel introduced a new line of low power
consumption chips called Atom that were aimed at mo-
bile internet devices (MIDs)—which was then defined
as devices between a smart phone and a conventional
laptop and included net-books (very small laptops meant
Some observers have blamed the problems of the
Barrett era on management issues at Intel. The company,
they say, had become too large, too bureaucratic, and
was no longer the egalitarian entity of its early years. The
“constructive confrontation” of the Grove years, which
had kept managers on their toes, had been replaced by
an autocratic culture dominated by people who got pro-
moted for managing upwards. A management vacuum
following Grove’s departure led to a lack of account-
ability and control. To quote one critic: “In the Grove
era, each leader who spearheaded an unsuccessful at-
tempt left the company after the project failed. However,
throughout the Barrett era each figure head has remained
at Intel after the project failed”.9
PAUL OTELLINI’S
PLATFORM STRATEGY
In 2005 Barrett became chairman. Paul Otellini replaced
him as CEO. Another long time Intel employee, Otellini
was the first Intel CEO to not have an engineering back-
ground (Otellini was an MBA with a career in finance
and marketing). As head of company wide sales and

55. marketing, Otellini gained prominence at Intel during
the late 1990s by pushing the company to adopt a more
aggressive approach to market segmentation. By the
late 1990s prices for low end PCs were falling to under
$1,000, and in this commodity market OEMs were cast-
ing around for cheaper microprocessor and motherboard
options. Ontellini came up with the idea of reserving the
Pentium brand for higher end chips, and creating a new
brand, Celeron, for lower performance chips aimed at
low cost PCs.
In the early 2000s, Otellini pushed for the creation of
the Centrino chip platform for lap top computers. While
Intel engineers were focused on designing faster more
powerful processors, Otellini argued that lap top users
cared more about heat generation, battery life, and wire-
less capabilities. The Centrino platform was designed for
them. It combined an Intel microprocessor with a WiFi
chip (for wireless networking), and associated software.
Personal computer manufacturers were initially skepti-
cal about the value of the Centrino platform. For a while
they continued to buy an Intel microprocessor while
purchasing WiFi chips from other companies. But when
performance tests showed that the Centrino platform
worked well, most manufacturers shifted to purchasing
C-184 Case 11 Intel Corporation: 1968–2013
on “the cloud”. At the heart of the cloud are very large
server farms containing hundreds of thousands of PC
servers that are networked together. Most of these serv-
ers, as it happens, are based on PC architecture and run
on Intel microprocessors. Thus the growth of mobile de-
vices that are connected to the Internet through the cloud

56. could result in more server farms and more demand for
Intel microprocessors going forward. Nevertheless, for
the time being Intel is clearly fighting headwinds in its
microprocessor business.
Otellini’s successor as CEO is Brian Krzanich, the
former COO. A long time Intel employee, Krzanich
made his mark in the company as head of the manufac-
turing organization. His elevation to the CEO position
probably speaks volumes about the importance Intel at-
taches to the manufacturing aspect of its business. A key
task for Krzanich is to make sure that the company re-
mains relevant in the post PC era.
Intel is not sitting back and letting ARM chips domi-
nate the mobile device market. It is introducing a new
generation of its Atom chips that appear to be far more
competitive with ARM chips, and deliver similar per-
formance per watt. These are 22 nm chips and will be
manufactured using the latest technology. If the new gen-
eration of Atom chips are competitive, it is possible that
Microsoft will again focus just on writing Windows to
run on Intel architecture, since producing two versions of
Windows is a costly exercise. This could provide upside
for Intel, particularly if Windows 8 and its successors
gain traction in the tablet and smart phone markets—
although to date that has yet to happen. Even if the Atom
chip is successful, however, the economic impact for
Intel might well be muted by the lower average selling
price of chips for mobile devices, as opposed to PCs.
Another aspect of Intel’s current strategy is to defend
the laptop market from encroachment by ARM chips. In
2013 Intel introduced its Haswell chips that can run PC
software but have longer battery life. Reportedly, laptops
running on Haswell chips have a battery life of up to

57. 10 hours, which represents a 50% improvement over
prior generation chips and comparable with the battery
life for a tablet.
Although Krzanich seems to be following the script
laid out by Otellini, it is clear that he faces significant
challenges going forward. The task for Intel is to remain
relevant in the post PC era, to hold the rise of ARM chips
in check, to continue to dominate its base, to revitalize,
if possible, its long-term symbiotic relationship with
Microsoft (a company that is itself facing significant
primarily for web surfing). At the time the Atom chip
was introduced, Apple had yet to revolutionized the
computer market with the introduction of the iPad, al-
though the iPhone had been introduced a year earlier.
Unfortunately for Intel, smart phone and tablet mak-
ers, including Apple, quickly gravitated to low power
consumptions chips based upon technology pioneered
by the British company ARM Holdings Plc. The main
advantage of ARM technology was that it generated far
more computing power per watt than alternative designs,
which implied extended battery life, a key requirement
from consumers. ARM does not manufacture chips itself.
Rather, it licenses its technology to other companies, in-
cluding Apple, Samsung, NVIDIA and Qualcomm, who
incorporated it in their chip designs. They then get the
chips made by contract manufacturers. By 2012, ARM
chips had become the de facto standard for mobile de-
vices such as smart phones and tablets, leaving Intel at
the fringe of the market.
INTEL IN 2013
Paul Otellini retired in May 2013. His legacy was a mixed
one. On the positive side, he had helped Intel to reassert
itself against a resurgent AMD and cemented the compa-

58. ny’s dominance in the PC market. The company’s revenues
grew from $39 billion to $54 billion, earnings per share
increased from $1.40 to $2.39, and Otellini left Intel with a
commanding market share lead in its core business. More-
over, its manufacturing capabilities remained unmatched in
the industry. On the other hand, Intel had largely missed the
move towards mobile computing, despite the introduction
of the Atom chip, and the company was struggling to gain
share against ARM chips.
More worrying still, PC sales were now in decline
as demand switched towards tablets. That being said, no
one expects the PC to disappear. Indeed, there is a belief
that sooner or later the need to replace aging PC inven-
tory will lead to a robust replacement cycle. There was
some hope that the introduction of Windows 8 in 2012
might stimulate replacement demand, but many consum-
ers were put off by the new tile based interface Micro-
soft utilized on Windows 8, and replacement demand
remains muted for the time being.
That being said, there is a silver lining in the rapid
switch towards mobile computing: Increasingly, these
devices are using high-speed wireless links to store
data on “the cloud” and access applications that resided
Case 11 Intel Corporation: 1968–2013 C-185
15. B. Snyder Bulik, “Intel’s New Strategy Demands a New
Partner”, Advertising Age, March 14th, 2005, pp 4–5.
16. Intel Corp. 10K Statement, 2012
17. Intel Corp: Assessing Intel’s Atom Tablet Opportunity,

59. Morgan Stanley, May 15th, 2013.
18. Vivek Arya, “Haswell: Mobility of a tablet, power of a
PC”, Bank of America Merrill Lynch, May 30th, 2013.
19. Anonymous, “Chip of the old Block: Intel v ARM”, The
Economist, May 2nd, 2013.
NOTES
1. T. Samson, “IDC: PC shipments worst than predicted,
tablet shipments get better to exceed PC shipments by
2015”, InfoWorld, May 28th, 2013.
2. D. Traviosm, “ARM Holdings and Qualcomm: The
Winners in Mobile”, Forbes, February 28th, 2013.
3. Tim Jackson, Inside Intel, Penguin Books, New York,
1997, page 18.
4. R.S. Redlow, “The Education of Andy Grove”, Fortune,
December 12th, 2005, page 116.
5. Tim Jackson, Inside Intel, Penguin Books, New York,
1997, page 33.
6. Tim Jackson, Inside Intel, Penguin Books, New York,
1997, page 206.
7. Anonymous, “When Intel says ‘Copy Exactly’, it means
it”, Chinadaily.com, May 30th, 2006.
8. Anonymous, “When Intel says ‘Copy Exactly’, it means
it”, Chinadaily.com, May 30th, 2006.
9. B. Coleman and L. Shrine, Losing Faith: How the Grove

60. Survivors led the Decline of Intel’s Corporate Culture
(Logan and Shrine, 2006), page 117.
challenges), and to gain meaningful traction in the rap-
idly growing mobile device market where Intel so far has
been little more than a bystander.
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