It wasn’t long ago that Intel was the dominant player in the computer chip industry.  Computers needed more powerful chips and Intel was the major supplier.  Customers demanded more power and the Intel brand delivered, propelling the company to dizzying heights.

However, a major shift happened in the market when Blackberry and later Apple and Samsung moved to mobile technology that Intel was ill-prepared for.  In 2006, in an attempt to protect their high margin x86 business, Intel sold its ARM-based processor division for $600 million and turned down an opportunity to design chips for Apple’s iPhone, believing phones wouldn’t sell enough handsets to justify development costs, preferring to focus on their high margins in the computer industry.

As if missing the mobile revolution wasn’t enough, Intel struggled endlessly with their manufacturing process.  Chip making is an arms race that Intel is losing.  Chip makers are constantly trying to get more computing power on a minuscule piece of technology.  More transistors on a microchip means more processing power, longer battery life, faster computing and, of course, lower costs.  Intel was supposed to release its 10nm processor in 2015-2016, but due to manufacturing issues was delayed until 2019.  The same happened again for its 7nm release set for 2021 which is still launching today in 2025.  Intel is very good at chip design, …manufacturing, not so much.  Interestingly, competitors have focused on either chip designing or chip manufacturing but not both!   Those competitors have all hit their release dates.

The final misstep is perhaps their biggest: when Intel failed to invest in OpenAI back in 2007 and missed the platform for the AI revolution.  NVIDIA got on board and has become one of the most valued companies in the world garnering 80% of the AI chip market – a market in which Intel struggles to participate.

What can we learn from Intel’s problems?

• Embrace disruption early:  In markets that move quickly it’s important to invest early in disruptive technology even if it might cannibalize your existing business.  Intel should have invested heavily in mobile and low-power computing from 2005-2010 even if it meant sacrificing some of the high margins in the mature computer chip market.
• Play to your strengths and cover your weakness: Intel designed and manufactured chips but they’re only world class at design. Separating chip design from chip manufacturing earlier could have allowed for faster adaptation to new markets.
• Success can paralyze you:  Intel’s dominance in PCs made them dismissive of mobile and AI opportunities. Market leaders must actively seek out all threats to their business model, being careful not to discount “inferior” or lower-margin segments.
• Lower margins can still be profitable at scale: Intel’s refusal to compete in “low-margin” mobile chips cost them the future. Sometimes you need to sacrifice short-term profits for long-term market position.

Intel’s story isn’t just about technology—it’s about how market-leading companies can lose their way when they prioritize protecting existing advantages over pursuing new opportunities. The company that powered the PC revolution missed the mobile revolution, the AI revolution, and nearly every major computing trend of the past 15 years.  Sometimes your biggest challenge isn’t a competitor but a shift in the market.   Is your strategy flexible enough to pivot to market changes?