The personal computer (PC) chip market that the company dominated for over three decades, and which accounted for the bulk of its sales during that period, is now in decline.
As Intel now turns its formidable R&D and manufacturing capabilities to address nascent markets, the company should not forget the marketing lessons from its own long dominance of the PC market, and from having missed the mobile device market. Three lessons stand out – lessons that every technology company
1. Competitive advantage is built not just in the R&D lab and manufacturing fabs, but in the marketplace and in customers’ minds.
2. The brand becomes the competitive advantage.
3. You don’t just build products, you build markets.
Intel floundered in the mobile device market not because its products lagged competitors’ but because it never gained control of the purchase criteria in this market. The company’s success in the PC market may have been misattributed to its technological prowess alone, rather than to the power of its marketing. In tomorrow’s markets, especially end consumer markets such as IoT, Robotics, and Virtual Reality, Intel – and technology firms broadly — cannot afford to make the same mistakes.
These are three excellent points no matter who you are or what industry you seek to dominate. The problem is that Intel became hidebound and arrogant. Despite Andy Grove’s admonitions to be paranoid, it ceased to be nimble, perhaps believing that the massive investment in fabs together with global distribution and branding created an impenetrable moat.
Which if this was still the industrial revolution might well have worked. It is ironic that like so many of the tech giants, they are now finding themselves on a rapid path to obsolescence. John Chambers recently said that most would be irrelevant if not out of business in five years.
So consider this article in the context of the other article I am running this week on how Intel will transform itself by fueling a virtuous cycle of growth for the company.