Intel is the market leader for computer processors and has been for many years. Most of the laptops and computers contain a processor from Intel. However, consumer demand has shifted from high end laptops and computers towards a lower segment. Also, Intel has failed to make striking improvements in the performance of its processors while increasing the price. This resulted in dissatisfaction by producers and consumers. This was also reflected in Intel’s stock price which declined during the past years. These shortcomings have paved the way for competitors to steal market share from Intel by offering customers better value for their money. ARM from Apple and AMD in particular have been able to make the future of Intel unsure.
Due to the shortcomings of Intel, competitors saw their chance to take away market share from Intel. First of all, AMD has been targeting lower segments of the market and slowly catching up on Intel in the higher segments. Generally, AMD offers better performance at a lower cost. AMD’s success is reflected in the fact that many new laptops and computers are equipped with an AMD processor. Secondly, Apple has announced that it will transition from Intel processors towards its in-house produced ARM processors which are now already used for the iPhone and iPad. Apple is promising to improve processors performance while lowering the costs of the MacBook. For Intel this means that they will lose a large amount of revenue.
ARM and AMD processors are both trying to give consumers better value for their money and thereby making consumers switch from Intel based laptops or computers towards ARM or AMD based laptops or computers. However, it may not be that easy. Intel has announced a new manufacturing technique for improving the performance of its processors. This news immediately resulted in an increase in their share price. Whether this new technique will be enough to make up for the loss of Apple as a major customer and the competition of AMD is not sure.
Will Intel be able to recover and show its competitors that they are still the best?
Sources
Cherney, M. A. (2020, September 6). Intel CEO Talks About How the Chip Maker Plans to Get Back on Track. Barron’s. https://www.barrons.com/articles/intel-ceo-talks-about-how-the-chip-maker-plans-to-get-back-on-track-51599420600
Leather, A. (2019, December 23). Intel Doesn’t Need Cheaper Processors To Beat AMD: It Needs Innovation And Here’s Why. Forbes. https://www.forbes.com/sites/antonyleather/2019/12/23/intel-doesnt-need-cheaper-processors-to-beat-amd-it-needs-innovation-and-heres-why/#297a470b34c4
Ravenscraft, E. (2020, September 4). All Your Questions on Apple’s Move Away from Intel, Answered. Wired. https://www.wired.com/story/apple-mac-intel-switch-guide/
