Slashdot Mirror
Intel Gives Up On TV
symbolset writes "Bloomberg is reporting that Intel, on the cusp of having low-power embedded chips that can do true HD in a flatscreen, has given up on getting its chips embedded in TVs. While many might say their efforts to date have been fruitless because of energy issues, Medfield might have had a chance in this field."
Keep in mind up until 2000-something Intel was not only one of the largest chip manufacturers, but also one of the largest manufacturers of embedded controllers in the world. Some MBA dickhead under Otellini or his predecessor (the dude who fucked them to rambus for the first year of the P4's life) decided that embedded wasn't a high enough 'profit' division to hold onto and either sold it off or spun it down.
I worked for Intel during that period. Management was totally poisoned by the dot com disease. You could have a business plan that called for spending $50 million over five years to create a guaranteed $150 million a year product line with 25-40% margins and they didn't want to know. They were only interested in stuff that supposedly was going to produce a $500 million business a year in 18 months. They spent vast sums of money on second string chip companies, some of whom were already in trouble before the bottom fell out.
The other thing, they have this focus on margins that is deranged in that it's a straight percentage target that isn't adjusted depending on the market. In some markets, yes 60% is needed because you need to reinvest constantly in new designs. But there are other markets where 20% is more typical. Markets where the product life cycle is 36 months not 12. So they give up on stuff when the margins aren't their, forgetting that the proper metric is return on investment. Case, say you have a business, makes 150 mil in revenue, 20% margin, is 30 mil. If you have to invest 10 million a year in product design and what not to keep that business. Then you make 20 mil year off a 10 mil investment. 100% profit. But the way Intel sees it' it's only 20%, not enough to waste time on.
Then the dot bomb happened and they tossed overboard everything that wasn't going to turn a profit in 12 months. They also stopped development on product lines, thus killing them over the medium term. Of the dozen or so companies they bought 1998-2001 they closed all but one, and that only because being 12 and O would have been too embarrassing.
My impression is that Intel has a lot of capable people, and money to hire same. But the upper management has issues. It's like when they enter a business and find the other players are determined and competitive, customers who are used to wheeling an dealing to get the best value out of their vendors; management gets pissy and shuts everything down instead of sticking it out long enough to crave out some market share.