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Intel

Group 1:
Stefani Arapidis
Emma Byall
Aaron Edwards
Jaekeun Lee
Antonio Montes De Oca
Lyndsey Picardo
Daxx Spera
Becky Wegner

Intels History
1971
Microprocessor and
EPROM are
created

1980s
Microprocessors
start to take off

1968
Intel was
founded

1970
First DRAM is
manufactured

Mid 1970s
Intel faced
tough
Japanese
competition

Early 2000s
Electronic
Recession

1990s
EPROMS and
Flash Drives
are introduced

The Beginning of Intel


Intel started in Spring of 1968 by the two founders & venture capitalist

Arthur Rock
Robert Noyce

Gordon Moore

Intels Initial Product


Intels focus was an integrated circuit device.
Intel successfully made the 1103, a 1-kilobit DRAM that was made affordable for
consumers.

Challenges of DRAM
Japanese Competition
Competing with Hitachi and Mitsubishi
Plentiful and low cost capital in Japan
Better manufacturing techniques

Intels inability to produce next generation DRAM quickly


Intel had to exit the DRAM market in mid 1985 due to the lack of profits &
the high competition of the Japanese.

The Hidden Gem


EPROM
DRAM gave us fame, but EPROM gave us riches. Grove
Intel did not know the value of the EPROM
Engineers valued this product
Came to market September
1971
- The 1702 EPROM

The Introduction of the Microprocessor


Intel invented the Microprocessor in 1971
First Microprocessor was the 4004

Microprocessor Industry
Motorola vs. Intel for the microprocessor architecture
1981 IBM successful leader in PC division
Helped Intel become leader in microprocessor industry

8086 and 8088 microprocessors


1981 Intel developed first 32-bit processor
1985 Intel became first time sole-source manufacturer
Intel advanced with intellectual property and protected its rights

Marketing & Branding Strategy


Project Crush
Contract with IBM
Secured 8088 microprocessor in IBMs first PC

Red X Campaign
Targeted AMD
Increased demand for 386SX

Intel Inside Campaign


Advertising program with OEMs

Customers and Suppliers


Original Equipment Manufacturers (OEMs)
Intels immediate customers
End-user advertising program
Vertically integrated
Sole-source

Suppliers
Bargaining power over suppliers
Make the supplies reliant on Intel

New Products
Introductory Phase
Available in short supply
Reaching full capacity production took time

Balancing Supply and Demand


Short supply --> priced at a premium
Limits demand
Production capacity increases
Lowers price

Complementors
Microsoft
Microsoft and Intel controlled much of the PC market
Microsoft created bottlenecks for Intel
Use of outside vendors

Intel Capital
Outsource to small firms
Alignment with the vision

The Barrett Era


1980

1990
PC market growing

2000
Internet
death of the PC

1988 - Craig Barrett named CEO

$12 billion on new markets


New mission statement : being the preeminent building-block supplier to the
world Internet economy.
Reorganized company into four areas:
Client platforms
Server platforms
Cellular and wireless
Communications and networking

Client Platforms
Includes desktop and mobile microprocessors
Battle with competitor AMD
2000 - AMD releases superior microprocessor
Response: spend on R&D; fill all segments of market

2002 - Intel successfully moved one generation ahead


AMDs appeal

2003 - Intel releases a brand-new mobile system

Server Platforms
A server is a computer on a network that manages network resources
Traffic
Database
Queries
File storages

Intel developed high performance 64-bit Itanium processor to compete with


Sun Microsystems and IBM
Although servers represent only small portion in Intels business, they spent
about 50% of its development funding on the server in 2002

Cellular and Wireless


According to IDC, Wireless access is the Second Coming of the Internet.
In 2002, approximately 400 million cell phones were sold worldwide
The key is network deployment and applications in our ecosystem. We can
only really grow to the extent that this is deployed.
Ron Smith, Senior Vice President and General manager of the Wireless communications and
computing group.

Intels strategy was to combine its leading position in flash memory, which was
already being used in most of cellular phones
By end of 2002, Intel PCA enjoyed support from different companies including
AT&T Wireless, IBM, Sharp, Sony, and Samsung

Communications and Networking


Used recession as an opportunity for innovation
Humans always want to communicate, Internet traffic growth doubled every year
Advantage for Intel because it stimulated a change in industry structure

Biggest communication investment was called Wi-Fi, or 802.11


Internet Exchange Architecture (IXA)- network processors that allowed for
mass-production, lower-cost, and interchangeable devices

Implementation Problems
Intel was faced with doubts as to if they could compete effectively in a new
competitive environment
Implementation problems included:
Capacity shortages, product recalls, product delays, and cancellation of announced products

Partially caused by technical miscalculations with a technology called Rambus


Lost several billion dollars due to new business venture failures
Back-to-basics program introduced

The Path Forward


Goal was to have communications and networking be the growth engines for the
future
Otellini as new COO
Otellini stated the new Intels long-term objective to be
Success comes when our communications group is indistinguishable from our PC group