Intel's Corporate Chief Executive, Paul Otellini, has indicated that the company is progressing to products beyond PCs. While numerous recent microprocessor chip deals have secured Intel's consistent growth throughout the year, the company seeks to expand its consumer base towards chips within smartphones, consumer electronic devices, cars, etc.
This move will prove to be beneficial for both the company and the telecommunications industry as a whole. Intel's expansion into areas such as the auto industry signals a change towards increased cohesiveness between various industries. The move will not only create numerous new jobs, it may potentially create new products and subsequently creates new areas for competition. Intel's innovation within the telecommunications industry can be seen in the status quo with the release of Google TV. Intel provided approximately half the code required for the product and the result is proof of the company's initiative. Another impressive move was Intel's recent acquisition of McAfee Incorporated, a specialist in security software. The software McAfee produces will bolster Intel's sales by guaranteeing the most secure product available. In an interview with Mr. Otellini, he states that "the best security is always a combination of hardware and software". Having a secure combination of hardware and software will help secure a safe transition into Intel's various new products.
Intel's innovative initiative could provide the company with the competitive edge needed to widen the gap between the company and other microprocessor chip companies. The acquisition of McAfee will provide the security necessary for Intel's expansion and will decrease the risk of setbacks along the way. New products will provide areas of competition to arise which will be beneficial for the industry as a whole.
Source:
http://online.wsj.com/article/SB10001424052748703453804575480012132581550.html?mod=WSJ_Tech_LEFTTopNews
Nice post, Toby. Savannah in section 3 actually wrote about this article too; head over to http://telecom003.blogspot.com/2010/09/intel-expands-beyond-pcs.html if you'd like to see what she thought about Intel's expansion.
ReplyDeleteThe article didn't touch on it much, since a company leader wouldn't want to say anything negative about his firm, but what do you think might be a downside to Intel expanding into so many fields/markets, a la Google? Is it always better to have diversified product offerings, or do you think things could be lost in the process?
Sorry about the late reply, I didn't notice the comment.
ReplyDeleteYou bring up a great point. I think while diversifying one's product base does open up numerous opportunities for increased revenue, there are potential risks. On the most basic level, if a company spreads itself out, there's a risk it could spread itself too thin and not produce quality products. A small example of this is Google's attempt at an iphone competitor via the Nexus One. Google had already established itself as the leader in online search engines and attempted to engage the touch phone market. Unfortunately, the product ended up being discontinued.
The effect of this, while not significant for a company such as Google, is a the money lost from failed products. I believe Intel has the fiscal capacity to take these risks, but poor sales are always an outcome companies should prepare for.
This brings up another potential downside being the uncertainty of new markets. Companies that engage new markets need to have the best information and skills necessary to be successful. Also, competitors, for example Apple, that have successfully established themselves within these markets are always a looming threat.
While I think Intel's decision to expand is great, it should be wary of the uncertain waters it has dived into.