The microprocessor has changed our lives in so many ways that it is difficult to recall how different things were before its invention. During the 1960s, computers filled many rooms. Their expensive processing power was available only to a few government labs, research universities, and large corporations. Intel was founded on July 18,1968 by engineers, Gordon Moore, Robert Noyce, Andrew Grove, and Arthur Rock. Rock became Chairman, Moore was President, Noyce was Executive Vice President in charge of product development and worked with Moore on long range planning, and Grove headed manufacturing.
The purpose of the new company was to design and manufacture very complex silicon chips using large-scale integration (LSI) technology. Moore and Groves vision was to make Intel the leader in developing even more powerful microprocessors and to make Intel-designed chips the industry standard in powering personal computers. Moore and Noyce wanted to seek Intel because they wanted to regain the satisfaction of research and development in a small growing company.
Although the production of memory chips was starting to become a commodity business in the late 1960s, Moore and Noyce believed they could produce chip versions of their own design that would perform more functions at less cost for the customer and thus offer a premium price. Intels unique challenge was to make semiconductor memory functional. Semiconductor memory is smaller in size, provides great performance, and reduces energy consumption. This first started when Japanese manufacturer Busicom asked Intel to design a set of chips for a family of high-performance programming calculators.
Intels engineer, Ted Hoff, rejected the proposal and instead designed a Single-chip, a logic device that retrieved its application instruction from semiconductor memory. Buying Back the Cash There was a problem with this new chip Busicom owned it. Intel was convinced to repurchase the rights to the product. Intel then offered to return Busicons $60,000 investment in exchange for the rights of the product. The Japanese agreed after struggling with the financial troubles. The Microprocessor Hits the Market Intels first microprocessor, the 4004, was introduced in 1971.
This $200 chip delivered as much computing power as the first electronic computer, the ENIAC. After the 4004, Intel introduced the 8008 microcomputer, which processed eight bits of information at a time. The 4004 and 8008 began to open new markets for Intel products. Today, affordable computing power is available to designers of all types of products, producing creativity and innovation. Turning Point: IBM PC In 1981, Intel microprocessor family had grown to include the 16-bit 8086 and the 8-bit 8088 processors. These two chips created 2,500 winning designs in the year.
A product from IBM was one of those designs, which became the first PC. Intel was convinced IBM to choose the 8088 as the brains of its first PC. Because of IBMs intelligent decision, the PC business grew to tens of millions of units every year. In 1982, Intel introduced the 286 chip. It contained 134,000 transistors and provided 3 times the performance of other 16-bit processors during the time. The 286 were the first microprocessor that offered software compatibility with its predecessors. The Microprocessor Machine In 1985, the Intel 386 hit the market.
The 386 could perform more than five million instructions every second. Compaqs DESKPRO 386 was the first PC based on the new microprocessor. In 1989, Intel 486 processor was ready to hit the market. This new chip resulted in 1. 2 million transistors and the first built-in math coprocessor. This chip was faster than the original 4004. In 1993, Intel introduced the Pentium processor, which set new performance standards with up to five times the performance of the Intel 486 processor. The Pentium processor uses 3. 1 million transistors to perform up to 90 MIPS, about 1,500 times the speed of the original 4004.
In 1995, Intels first processor in the P6 family, the Pentium Pro processor, was introduced. It included 5. 5 million transistors and contained a high-speed memory cache to accelerate performance. The Pentium Pro processor was a popular choice for multiprocessor sewers and high performance workstations. Intel introduced the Pentium II processor in May 1997. It contains 7. 5 million transistors packed into a unique Single Edge Contact Cartridge and delivers high performance. Intel offers Pentium II processors for Mobil PC, carrying new levels of performance and computer capabilities.
In April 1998, Intel introduced the Celeron processor. This is the latest Intel processor created to meet the computing needs of Basic PC users. Intels recent introduction is the Pentium II Xeon processor. This is the newest addition to Intels Pentium II brand. It is Intels first microprocessor designed for mid and higher server workstation platforms. The companys success in memory chips was built from the resources involved in working on projects to design and develop the worlds best microprocessor. Intel’s primary business into the mid 1980s was memory chips, which accounted for 70 percent of revenues.
In 1985 and 1986, Intel closed eight memory chip plants. They were fighting a never winning battle with the Japanese produces of memory chips. Gordon Moore and Andrew Grove refocused the company on advancing the technology of microprocessors. Intel decided to create a new vision and strategy for the company. Their vision was to make Intel-designed chips the industry standard in powering personal computers. Intel supplies the computing industry with chips, boards, systems, and software. Intel’s products are used as “building blocks” to create advanced computing systems for PC users.
Intel’s mission is to be the preeminent building block supplier to the new computing industry worldwide. Intel has several objectives in order to pursue their vision. The objectives include PC and server management advances through new Intel hardware and software products, alliances with other industry leaders, education and development programs, and industry standards efforts. Most importantly, Intel’s greatest objective was making the PC an indispensable and persuasive appliance, which would ultimately compete with the TV, VCR, and telephone.
Andy Grove crafted a series of strategies in order to reach Intel’s objectives: Introduce innovative products quickly. Andy Grove’s vision of making the PC tomorrow’s information appliance required the company to do more than be a leader in advancing microprocessors. Intel tries to bring innovative products to the market as quickly as possible. In 1995, Intel introduced the new high-end Pentium Pro processor. This came less than three years after the introduction of the Pentium processor, which is now the processor of choice in the mainstream PC market.
Together, these products provide computer buyers with a wide spectrum of computing choices. Due to the growing popularity of the Internet, Intel programmers developed a software product called Streaming Media Viewer that software developers could incorporate into their products and allow users to view video as it arrived from the World Wide Web. Also, Intel developed hardware based cryptographic technology that provided increased levels of security for data communicated over the Internet. Intel’s strategy of bringing innovative products to the market quickly has proven to be costly.
In 1996, Intel spent $500 million on R&D projects to develop products (other than microprocessors). Even though other producers were using joint ventures to build the extremely expensive fabrication plants, Intel chose to go alone. Beyond their primary task of making microprocessors, Intel invests in a range of computing and communications applications that support their core business. Intel’s supercomputer and network server efforts take advantage of the flexibility and power of Intel architecture, while their flash memory business supports booming communications applications, such as, cellular phones.
Intel executives saw the future PCs equipped with new features, such as, digital video, stereo sound, 3-D graphics, fax, and data communications. Intel decided to add these features into its next generation microprocessors. Intel decided to compete with the Taiwanese computer industry. They felt that the Taiwanese were too slow to adapt their products to the latest Intel innovations. By producing motherboards, it would enable Intel engineers to integrate new functions. 2. Promote the Intel brand. Intel invests in education and marketing programs that describe the benefits of genuine Intel technology.
In 1990, Intel initiated a marketing program to build the Intel brand and make PC users aware of the benefits of genuine technology and products. Intel asked PC makers to put the Intel logo on their machines. The company also sponsored television and print advertising campaigns stressing that by choosing an Intel-based PC, users got the ultimate in quality, reliability, software computability, and value. The marketing program was a success and had become a prominent element in Intel’s strategy ever since.
Not only did Intel continue to sustain its dominant market share, but also customer feedback revealed that PC buyers, not just computer techies, really cared about their computer’s chip and performance capabilities. Instead of assigning its two new chip generations numbers like 286, 386, and 486 chip generations, Intel named them Pentium and Pentium Pro. This helped Intel build their brand name by allowing PC buyers to become familiarized with their products.
Experts believed that Intel was spending over $100 million annually on promoting their name among consumers. Alliances with other industry leaders. The breakup of the old computer industry is what gave Intel its chance and made the mass-produced computer possible. The old computer industry was vertically aligned. Industries used to build their computers from bottom up. Now, these companies purchase products from other industries to build their computers. Because PCs contained components from so many different vendors, Grove believed industry participants in different horizontal specialties had to develop new products in parallel.
Intel works with other industry leaders to develop new PC technologies, such as the PCI “bus”, which has been widely adopted. This technology removes bottlenecks to provide greatly enhanced capabilities. They incorporate their chips into PC building blocks, such as, PC motherboards, to help computer manufacturers bring their products to the market faster. Intel also works closely with software developers to create rich applications, such as, PC video conferencing and animated 3D Web sites, that make the most of the power of Intel processors.
Also, Intel is working with the U. S. Department of Energy to build the world’s fastest computer supercomputers. As Intel introduced new generations of microprocessors, it was beneficial for Microsoft and other developers of operating systems and software to be ready to go to market with new software systems and products that capitalized on the speed of Intel’s new processors. Andy Grove and Bill Gates began meeting in the 1980s to explore how their organizations can share information.
Intel believes that if computers work better, do more, and are easier to use, more PCs will be sold and more Intel processors will be needed. As with any other strategy, it is necessary to evaluate performance and initiate adjustments in vision, long term direction, objectives, strategy, or implementation in the occurrence of changing conditions, new ideas, and new opportunities. For example, in 1994, a mathematics professor found a flaw in how Intel’s new Pentium chip did division in certain situations.
The media got a hold of this and there was negative publicity about Intel floating around. Intel explained to its consumers that the chances of this happening were minute. Intel admitted the flaw, but Andy Grove felt that it shouldn’t concern anyone except the most demanding scientists. Intel wanted to stand behind there “Intel Inside” campaign, so they had to reevaluate their strategy. Within days of the incident, Intel offered all owners of Pentium based computers a free replacement of their Pentium chip and took a $475 million write off to cover the costs.
Even though it was considered a disaster, only a few owners took a replacement chip. Intel focuses on being a best-cost provider. Their strategic target is the value conscious buyer. They want to give customers more value for their money. Intel’s product line carries good-to-excellent attributes, several to many upscale features at low cost to the PC buyer. Overall, their focused strategies have kept them on the right track. However, Intel continues to attract competition, both from makers of software-compatible microprocessors and from makers of alternative-architecture chips.
