Intel plans to fire thousands of employees later this month around the same time it announces likely disappointing 3Q22 earnings. Its stock is worth less than half of what it was at the start of the year.

You’d think they were in the buggy whip business or something.

The Conventional Wisdom

Most explanations for Intel’s woes (and those of Nvidia and AMD) are that they’re overly dependent on PC sales, which started cratering in 2010. Demand has collapsed further this year, whether due to tough economic conditions or supply chain woes, though some industry pundits are forecasting a sales uptick in a few years based on nothing more than hope for a down cycle magically improving.

What if people don’t see the need for PCs when they have their computing processing power distributed between smartphones, tablets, home assistants, and even their cars, which means the world doesn’t need robust server farms if computing superpowers are embedded in those devices?

Intel’s website screams that it’s producing cutting-edge PC tech. It spends lots of comms budget buying content placements in all the “right places, like the MIT Technology Review, and has promised to invest many billions in new fabs in Europe and the US…to buy chips that it hasn’t explained why anybody will buy.

When I search “Intel strategy” I get hits mostly about layoffs. There’s also a weird story from last year in which its CEO seemed to say the company’s future would rely mostly on software, not chips.

An old marketing adage notes that you can’t use yourself as a research subject, but as a power consumer of most top tier news, business, and tech media, I couldn’t tell you why Intel isn’t a modern-day maker of buggy whips if you paid me.

What’s Going On?

The most likely answer is the most obvious one: Intel is getting disrupted and it’s too big and bureaucratically bloated to do anything about it. It can’t risk damaging relationships with current customers even though they’re dragging the company into its corporate grave. It pays management consultants millions every year to give it thoughtful PowerPoint presentations about futures that will never come and actions the company will never take.

Everything looks great in those darkened boardrooms. If only everyone else drank the same Kool-Aid.

The second most likely answer is that its leaders can’t communicate their way out of a paper bag. This is usually a function of said leaders being so comfortably ensconced in their perk-laden lifestyles that nobody can tell them what they need to hear. Powerful, well-paid execs tend to think they’re experts on everything and their egos are far more important to them than embracing any truths about what they need to communicate (or how they need to do it).

They’re dinosaurs and they’re enjoying their last days of sunlight before the meteor strikes.

The third possible explanation is that there’s been an utter failure of Intel’s internal communications staff and external agencies. I can only shudder when I imagine how many people and how much money are dedicated to creating and preserving the public image of a company wedded to the inevitable decline of PCs. I must admit that they’re doing a great job and their perks must be nice, too.

Maybe there’s no upside to rocking the boat with novel comms ideas, especially if it’s doomed to sink and has a bunch of dinosaurs steering it.

Let’s assume that aspects of all three causes are true and Intel faces a difficult and uncertain future. What is the alternative to the buggy whip business? One approach comes to mind:

Modernize The Whips

Why couldn’t Intel make a bold case for the centrality of PCs (and their commensurate power processing) for the world of tomorrow? Stop calling them desktops, or PCs for that matter. Redefine the category and describe a world in which each of us is empowered with incredible computing so that our lives are better and safer.

Why isn’t a smart home or factory described as “a computer?” What about equipping individuals with the analytic tools only available to rich, big corporations? Intel should be talking about the future the way Elon Musk talks about colonizing Mars and put its research, like quantum computing, into a bigger, integrated vision.

Think “The Aware Economy” in which individuals are able to “be aware” of risks to their safety and opportunities for their success. Efficient markets depend on the transparency and availability of information. Why isn’t Intel core to the revival of capitalism, not to mention the survival of the species?

The company’s layoffs are expected to hit sales and marketing, and shooting the messengers isn’t a good sign that it’s anywhere near facing the reality of its situation (even if those departments deserve part of the blame).

Even if Intel is doomed buggy whip maker, wouldn’t it be cool if it went down fighting instead of scapegoating?

[Disclosure: I’m an Intel shareholder, so I have a vested interest in the company’s survival/success.]

Categories: EssaysInnovation