Intel, the Super-King.......
If Intel is a King, then there is a HUGE divergence in the relative strengths of the various Kings.
I think that's right. Intel, in my mind right now, is a Super-King. It is a traditional gorilla with control of the non-proprietary basic architecture of the PC-CPU; however, the basic CPU's capabilities have so outstripped present-day common applications that the basic architecture that is known to other CPU manufacturers is good enough most of the time. Hence, Intel has morphed into a Super King.
I call it a Super King because it has 6-9X the market share (not just 2X) of AMD in the desktop PC, and many times that in the notebook PC markets. It outexecutes, despite its missteps, due to $$$$ and FAB capacity and the fact that it provides so many pieces of the PC puzzle, including chipsets, motherboards, and incorporates other chips (audio, graphics) onto the motherboards. Intel's leverage in cash, capacity and PC wherewithal gives it Super-King capabilities.
For awhile, I wondered if we should classify Intel has a PC-CPU gorilla on main street, but the best example of that is MSFT with Windows 98; open, proprietary, and necessary for the value chain, despite tornado like revenues slowing.
Intel, unlike Dell, has used its leverage to maintain high margins while knocking out or moving away from the competition. Pretty amazing feat, when one thinks about it. The proprietary stuff Intel puts into the Pentium II and III were special, but not necessary for the largest portion of the adopting market, hence no high switching costs to the value chain from that perspective.
If Intel has morphed from gorilla to super-king in this segment, because of the present day lack of a killer application to make use of its proprietary software/instruction sets on its PC-CPUs, then there are several issues to look forward to:
1. someday, with voice recognition perhaps tied to a specific CPU instruction set, or some other killer ap., then intel may morph back into a gorilla in this segment.
2. Intel may still become a gorilla in other segments, if it is successful with Itanium and its successors in commoditizing Server CPUs, and can get the OEMs to use it near-exclusively as a way of cutting costs.
3. Are other companies are capable of morphing? What of JDSU; a king or super-king now; but possibly a future gorilla someday?
If this morphing is true, then this thread may have uncovered another pathway not well described in the GG. Gorillas are usually unseated by a discontinuous innovation, not by morphing because the rest of the market isn't able to keep up with it's products relentless progress, as with Moore's Law.
This has been a great ongoing discussion. I'm thankful to the thread for helping better understand these principles.
Apollo |
