Intel: The 3 Failures Of Brian Krzanich, Part 1

Jun. 23, 2018 7:25 AM ETIntel Corporation (INTC)AAPL, QCOM, SSNLF, TSM52 Comments


  • Intel's golden opportunity.
  • Failure #1: mobile devices.
  • Investor takeaways.

Rethink Technology business briefs for June 22, 2018.

Intel's golden opportunity

Brian Krzanich. Source: Anandtech.

The sudden departure of Intel's (NASDAQ:INTC) CEO, Brian Krzanich, presents Intel with a golden opportunity to reinvent itself and make a break with its past. That need is paramount. The fundamental failure of leadership of Krzanich has been a lack of adaptability and open mindedness. All too often, true innovation and accomplishment were replaced by dissembling and disinformation.

Even as Krzanich and company have presided over the decline of the Wintel PC, they have congratulated themselves for maintaining and even growing revenue slightly. Krzanich became CEO in May 2013. From fiscal 2013 to 2017, revenue grew by just 19% to $62.8 billion, while GAAP net income was flat at $9.6 billion.

In contrast, Apple (AAPL), despite being much larger, still grew faster in roughly the same time interval. From Apple's fiscal 2013 to 2017, Apple revenue grew by 34% to $229 billion, and GAAP net income grew by 30% to $48.35 billion.

I bring up Apple specifically because Apple has been to a large extent responsible for the decline of the Wintel PC as it invented powerful mobile devices that made the PC less than essential. Apple didn't just invent the modern smartphone and tablet, it invented a new business model that has steadily eroded the PC commodity model. Instead of buying commodity processors from a company like Intel, Apple elected to design its own.

These processors, based on an alternative computing architecture from ARM Holdings (ARMHF), would be fabricated by a silicon foundry. Thus, Apple established the key elements of what I have called the new paradigm: internal design of processors as part of overall product development, use of ARM architecture, and fabrication by an independent foundry.

When confronted with the new paradigm, the Intel

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This article was written by

Mark Hibben profile picture
Balanced, expert investing strategies from a technologist's perspective
Mark has a masters in Electrical Engineering from USC, is an independent iOS developer, and blogs about technology trends and companies, the focus of his investments.

Disclosure: I am/we are long AAPL, QCOM, TSM. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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