Intel’s Disruption is Now Complete
“Look, Clayton, I’m a busy man and I don’t have time to read drivel from academics but someone you told me you had this…
Apple’s initial foray into chips didn’t produce anything that special in terms of silicon. But it didn’t need to — people were happy to just have a computer that they could keep in their pocket. Apple has gone on to sell a lot of iPhones, and all those sales have funded a lot of R&D. The silicon inside them has kept improving, and improving, and improving.
As Allworth highlights, there are actually two fascinating parts of Apple upending Intel’s business. First, Intel (under Andy Grove) actually sought out the godfather of disruption, Clayton Christensen, to ensure Intel wouldn’t fall victim to such forces. Second, Intel (under Paul Otellini) flatly refused to work with Apple on low-power chips for the device that would become the iPhone. “I couldn’t see it.” Otellini would famously later recall.¹
That decision led directly to yesterday’s M1 announcement. Intel spurning Apple put them on the ARM path, which led to bringing a team in house to build chips based off of the architecture. Which led to this.²
¹ Bonus points for the fact that it was Otellini who was also CEO when Apple finally — a legit finally — switched the Mac over to Intel chips. A move which set them up perfectly for Apple’s truly disruptive future business, the iPhone. But again, he couldn’t see it. Wild.
² Now, would Apple have eventually still made their own chips even if they had partnered with Intel on the iPhone? Probably. But it would undoubtedly happened much more slowly, for the reasons Allworth outlined above.