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Intel Fights For Its Future (mondaynote.com)
An anonymous reader shares a post: The Smartphone 2.0 era has destroyed many companies: Nokia, Blackberry, Palm... Will Intel be another victim, either as a result of the proposed Broadcom-Qualcomm combination, or as a consequence of a suicidal defense move? Intel sees the Qualcomm+Broadcom combination as an existential threat, an urgent one. But rather than going to the Feds to try and scuttle the deal through a long and uncertain process, Intel is rumored to be "working with advisors" (in plainer English, the company's Investment Bankers) on a countermove: acquire Broadcom. Why the sudden sense of urgency? What is the existential threat? And wouldn't the always risky move of combining two cultures, employees, and physical plants introduce an even greater peril?
To begin with, the threat to Intel's business isn't new; the company has been at risk for more than a decade. By declining Steve Jobs' proposal to make the original iPhone CPU in 2005, Intel missed a huge opportunity. The company's disbelief in Apple's ambitious forecast is belied by the numbers: More than 1.8 billion iOS devices have been sold thus far. Intel passed on the biggest product wave the industry has seen, bigger than the PC. Samsung and now TSMC manufacture iPhone CPUs. Just as important, there are billions of Android-powered machines, as well. One doesn't have to assume 100% share in the smartphone CPU market to see Intel's gigantic loss.
To begin with, the threat to Intel's business isn't new; the company has been at risk for more than a decade. By declining Steve Jobs' proposal to make the original iPhone CPU in 2005, Intel missed a huge opportunity. The company's disbelief in Apple's ambitious forecast is belied by the numbers: More than 1.8 billion iOS devices have been sold thus far. Intel passed on the biggest product wave the industry has seen, bigger than the PC. Samsung and now TSMC manufacture iPhone CPUs. Just as important, there are billions of Android-powered machines, as well. One doesn't have to assume 100% share in the smartphone CPU market to see Intel's gigantic loss.
You are attaching too much importance to the iPhone CPUs (and Android) market. It is doubtful the margins are high on those, especially since Apple has multiple manufacturers. That is like saying Apple missed out on making Android phones because there were so many of them out there. You don't want to enter a cutthroat low-margin market.
Because the PC market is dying.
Only if you ask the stock market. Stable demand without growth is called a business (though shareholders tend not to care about that). Replacement cycles are long, but nothing has supplanted the PC.
The article (or at least the Slashdot synopsis) may be excessively editorializing it, but Intel is threatened by the reduction in the personal computer industry.
Consider that when PCs rose to prominence there were lots of architectures. Even after Wintel and Motorola/Apple dominated personal computers at home, business computing still had other architectures (MIPS, and Alpha immediately come to mind) to the extent that Microsoft felt the need to port their business OS to those platforms, rather than to force x86.
The end of the model that all software has to be compatible with x86/AMD64 and that the gatekeepers for software for new devices (Apple's and Google's respective repositories) require that the software work on their devices almost without respect to the underlying CPUs, plus the 'cloud' model and various other virtual machine models may abstract the software developer away from the physical hardware to the point that we might again see a proliferation of various architectures again. Intel has reigned supreme because it was difficult to port software or to write software to run on everything, but if that has changed then suddenly it doesn't matter what actual CPU is in the phone or tablet or even server, it'll just work when it's time for the software to run.
That's the threat to Intel's business-model, a loss of near-monopoly on processors because new devices don't need Intel's processors.
Do not look into laser with remaining eye.
AMD (not Intel, they did not have the skills) not only came up with the only viable 64 bit extension to the x86 architecture
You're leaving out a rather important detail: Intel didn't try to create a 64 bit extension to x86.
Instead, Intel tried to use Itanium and IA-64 to replace x86 and all the cruft in it that had built up over the years. Intel thought people would only buy Itanium for servers, since a 64-bit address space wasn't very useful for desktops at the time. So they priced their chips high.
AMD countered with 64 bit extensions to x86 and cheaper chips.
Cheaper won.
PC market is shrinking fast
No, it isn't. The PC sales are dropping slowly and steadily, but the PC market penetration has not changed dramatically, people just upgrade more rarely.
Intel stock is up 50% in the last 12 months (to $50) and they made about $63 billion dollars in 2017.
I think they're doing okay.
There was exactly zero chance of Intel making iPhone CPUs. It was never on the table. Intel wasn't in the business of fab to mobile market.
Otellini was smoking something when he made that claim. Absolutely nobody else in the company believed it. The market was too small, the IP was wrong (as in Intel was on the wrong end of it). Just like everybody else Intel/Otellini didn't think apple could cook up enough business to change their business model. Which was complete verticle slice of IP/Process/CPU/MB/Servers and it was making quite a bit of coin doing it. Becoming just the company that makes apple designed CPUs for phones, no viable business model for that.
Maybe a fever dream left a vague unease behind, but it wasn't even a possibility. Intel never made the short list.