Inside Intel: learning from the chipmaker's recent failures

A new report explores how the US chip giant, Intel, fell behind a market in which it had been leader throughout most of its history; businesses, and especially their marketers, should take note of the story.

Why it matters

Though semiconductors and chipmaking are some of the most B2B products around, there are lessons in humility in the story of Intel and a cautionary tale for why leaders should listen to their marketers. They don’t just pump out messages, after all, but understand the market into which they sell. Those same marketers also need to be able to convince senior leadership of the strategic importance of what they report back. 

Details

• An icon of American manufacturing since the 1960s, Intel pioneered the modern chip industry and in the 1990s and early 2000s surfed a wave of growth that came with the development of PCs and laptops. Its sonic branding reminded consumers of its presence inside these devices. 
• Its position was shaken when its largest customers, including Amazon, Apple and Microsoft, starting to design their own chips.  Apple awarding the contract for its iPhone chips to Samsung marked a turning point as Intel continued to focus on a large but now-mature market.
  
• In Q2 2020, the company was telling analysts that it might have to outsource production to hit targets, letting slip its key selling point and admitting a fault.

What went wrong 

• The recently-ousted senior leadership that replaced influential CEO and chairman Andy Grove brought with it a different culture, one that was far less open to accepting advice and constructive criticism on potential problems. “Limiting the truth is death for a complex company like Intel,” said one senior executive.
  
• “Ultimately, according to several people with knowledge of Intel’s strategy and operations, the company was never willing to divert its production and design resources away from PC and server chips, and its mobile efforts suffered as a result,” Bloomberg reports.

What next 

Intel continues to focus on engineering expertise, building new factories and investing more than $20bn to break into the foundry business and become a contract manufacturer.

Sourced from Bloomberg