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6 min readDec 6, 2020

Intel’s fall from king of the industry to observer of its fate was already in motion by 2005: despite the fact Intel had an ARM license for its XScale business, the company refused to focus on power efficiency and preferred to dictate designs to customers like Apple, contemplating their new iPhone, instead of trying to accommodate them (like TSMC).

“Look, Clayton, I’m a busy man and I don’t have time to read drivel from academics but someone you told me you had this theory… and I’m wondering if you could come out to present what you’re learning to me and my staff and tell us how it applies to Intel.”

Well, we’re fortunate to have an interview of Otellini in his last month on the job as Intel CEO. Here’s what Otellini decided to do, when presented with the option to power the iPhone:

Either way, though, the end result was the same. Just like its partner in the PC era, Microsoft, Intel was so ensnared by its success in the PC paradigm that it couldn’t see out of it. With that — and the margins associated with its success — it saw no need to question its winning formula: that of integration of chip design and manufacturing. A promising customer comes knocking with something that doesn’t look to have the same margins as the existing business?A couple of years later, after Grove had retired as CEO of Intel but remained its Executive Chariman, he stood on stage at Comdex. He told the world that the book he now held in his hands — Christensen’s just-published The Innovator’s Dilemma — was “the most important book he’d read in a decade”.Not only do I get to “choose Linux”, I get to choose the distribution of Linux I use — and that has changed over time. Last week I ran “Manjaro”, the week before that “Elementary OS”, and before that “Ubuntu”. I’m back using Ubuntu this week. I may change again next week — it’s a little like re-building your house again and again, with no appreciable loss or gain in core functionality. Of course, you get nothing done, but that’s not the point.

Indeed, that deal between Apple and Intel was more important for Intel than it could have ever possibly realized. But it wasn’t because Intel had sewn up the last of the desktop computer processor market. Instead, it was because Intel had just developed a relationship with a company that was thinking about what was coming next. And when Apple were figuring out how to power it — and by it, I’m talking about the iPhone — they came to their new partner, Intel, for first right of refusal to design the chips to do.
Finally, today marks the day where, for Intel, those two lines on the graph intersect. Unlike the last time the two lines intersected in the personal computer market, Intel is not the one doing the disrupting. And now, it’s just a matter of time before the performance of ARM-based chips continues its march upmarket into Intel’s last refuge: the server business.What about this chart is interesting? Well, it turns out, it bears a striking resemblance to one drawn before — actually, 25 years ago. Take a look at this chart drawn by Clayton Christensen, back in 1995 — in his very first article on disruptive innovation:Under Grove’s steady hand, Intel built the chips that effectively powered the personal computer that soon sat in in every home and on every desk. Alongside Microsoft, it became synonymous with the desktop computer — and famously valuable.
He might not have realized it at the time, but when Grove was reading Christensen’s work, he wasn’t just reading about how Intel would go on to conquer the personal computer market. He was also reading about what would eventually befall the company he co-founded, 25 years before it happened.

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Written by Trifat

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