2015 marked the 50th anniversary of Moore’s Law, a famous and remarkably accurate prediction made by the co-founder of Intel Corporation about the pace of technological innovation. The prediction stems from an observation regarding the development of semiconductor devices and has driven the commercial success of Intel. But in 2014, Intel reorganized its business following an abject failure to take part in the smartphone and tablet revolutions amid a simultaneous decline in the consumer PC market.
In 2014, the Intel management team finally decided to largely give up on the smartphone market and learn from its mistakes by directly taking on newly emerging industry trends, reorganizing its ‘Other Architecture’ segment into the ‘Internet of Things’ (IoT) only.
If managed correctly, this switch will be a strong move for Intel as data traffic is already growing at a significant rate and much more will arise between connected devices in the future. Cisco, for instance, estimates that annual global IP traffic will expand with a CAGR of 21% between 2013 and 2018 to reach 1.1 Zettabytes (one Zettabyte is equivalent to one billion Terabytes). More specifically, Cisco also estimates that monthly machine-to-machine (M2M) Internet traffic is set to grow at a CAGR of 84% between 2013 and 2018, reaching a total of 7.3 Exabyte’s (one Exabyte is equivalent to one million Terabytes) per month. As a result, monthly M2M Internet traffic will account for 3.7% of total Internet traffic in 2018, up from 0.5% in 2013. Investment from Intel in this market now will therefore see this new segment rise substantially in the near future.
In order to tap into this growing market, Intel has actively increased its pace of innovation and product line in an attempt to position itself at the forefront of the market. The company has therefore introduced a range of new devices over the last two years that include Intel Quark (a processor designed for smart, IoT and wearable devices), Intel Galileo (an Intel Quark-based Arduino-compatible microcontroller board designed for computer education and inventors/makers), Intel Edison (an Intel Quark-based tiny computer development system designed to allow inventors to prototype the next generation of wearable and robotic devices), and Intel Curie (an Intel Quark-based button-sized System on Chip (SoC) hardware module designed to further advance wearable technology developments). The first Intel Quark SoC devices were shipped in 2014.
It remains to be seen whether the move to create Intel Quark devices is early enough, or just the start of another lingering nightmare, as the smartphone market has been for Intel. Arduino microcontroller boards and Raspberry Pi miniature computers have been around for a long time already and have captured the initial surge in demand from the inventor/maker community and will continue to do so without successful targeted marketing from Intel. If Intel is unsuccessful, these companies could erode future market share away from Intel.
For a detailed examination of Intel’s strategic shift, see Intel Corporation: Resilience in the face of error and learning from strategic mistakes.