There have been a lot of inventions in the world that have helped the advancement of technology through the history of mankind. But there are some that have changed the world forever. One such invention is the computer. Computers are something that has become very common these days. But a couple of decades ago not many people actually had computers. They were used by big companies and scientists to do complex calculations and store data. The first-ever computer that was built was nearly as big as a room. From there they have evolved in such a way that you can carry one in your backpack. It is such a small and compact machine that stores a lot of information and power to do various things. The computer you use today is so advanced that you would probably break an old computer if you were given it as a gift.
The computers that were manufactured two decades or even a decade ago are not as fast as the ones that you are using now. Even the size of the computers drastically changed by that time the hardware that was developed was not as advanced as it is today. You might have used a computer when you were young. If you did you would know how long it would take you to perform some actions. This is because the processing speed of the computer was not as quick as you wanted it to be. But with time the processing speed of the computers changed. Today you have computers that can perform several complex activities simultaneously at lightning-fast speed. The company that made this possible is Intel. This is a company that everyone who knows about computers has heard about. It is famous for its microprocessor. But not many people know much about this global company and its business model. This article is completely about that.
You are going to learn about the business model of Intel but before that let’s know more about the company.
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What is Intel?
If you are someone who has the slightest knowledge about computers you already know what intel is. But for those who don’t know, Intel is an American technology company and multinational corporation. The main headquarters of the company is situated in the famous Silicon Valley in California. Intel was founded by Gordon E. Moore and Robert Noyce in the year 1968. Gordon E. Moore was a chemist and Robert Noyce was a physicist. Even though the first integrated circuit was invented by Jack Kilby the design made it unsuitable for mass production. After that Robert Noyce invented the first monolithic integrated circuit that can be manufactured on a large scale. Both the founders were able to start the company with help of Arthur Rock and Max Pavelsky who were venture capitalists.
In the initial years, the company was known for its semiconductor devices and logic circuits. The main aim was the semiconductor memory market as they predicted it would replace the magnetic core. The first product of the company SRAM was twice as fast as the Schottky diode which was used at that time. In the same year, it also invented the MOSFET but it was not as successful as the previous ones. The company invented DRAM in 1972. This semiconductor memory chip was the best selling memory chip at the time as it replaced the core memory in lots of applications. After this, the company started manufacturing a wide range of products. But it changed the technology industry forever when it invented the first microprocessor that is commercially available. It was a revolution as it brought down the size of a CPU. Because of this, even small machines could do complex calculations quickly which could only be done by large machines at the time. After that company went on to become one of the most valuable companies in the world.
Business model of Intel
Now that you learned the brief history of the company let’s look at the business model of Intel.
Research and development
The research and development team of Intel is one of the most important reasons behind the success of the company. Their research and development team is responsible for introducing changes and specifications to products that made them better. More than 70% of the staff at Intel are in the research and development department. This goes to show much the company puts emphasis on innovation. Maybe that’s why the company is successful in making hardware and software products that are used by top computer manufacturers.
High-performance hardware
Intel provides high-performance hardware to many of the top computer manufacturing companies. Providing high performance and high-quality hardware has been the main focus of Intel right from the beginning. Even when you see an ad about computers. You must have noticed that they would mention the type of Intel core processor they are using. That’s how much of an impact Intel has on the sales of a computer model manufactured by other companies. Apart from microprocessors, Intel manufactures other things like PC components, board-level products, networking, and communication products. Intel acts as an original equipment manufacturer for other branded and unbranded resellers.
Key partners
Intel has to rely on some of its partners to create and sell products that are world-class. One of the most important partners is technology providers. These are the entities that provide software and other services to Intel so that they can use them in their products. Authorized distributors are also very important for the company if they want to generate good revenue from the products they manufactured. These are the distributors that have the ability to sell large quantities of their products. They can do this both online and offline which cannot be done by private sellers.
The Inside program is another thing that helps the company to promote its brand as well as its products and services. If you have a laptop you might have noticed that there is an Intel sticker in the left corner of your laptop’s keyboard. This is part of Intel’s Inside program. It makes sure that the end customers know that the product they are using has components manufactured by Intel.
Customer service
This one doesn’t need any emphasis. Good customer service is very important if you want to make sure your business is a success. Intel provides good customer service to its customers. This is one of the reasons why so many customers like to buy from them. Their website provides a variety of resources to help and assist their customers. It has videos, a content library, product information, a documentation library, and a section for FAQs. They also provide support through phone and email.
How does Intel make money?
There are a lot of ways in which Intel generates revenue. Most of you might not know all of them. But just like any other big company it has multiple revenue streams. Let’s go through them one by one.
Selling products
There are lots of products that are manufactured by Intel. Most people know Intel for its microprocessors but there are a lot more products that it manufactures. It manufactures chipsets, servers, SSDs, networking products, I/O products, boards, and kits. It sells them to many companies that need these products in large quantities. Not only hardware but Intel also provides software services to the companies. If you know about computer security then you might have heard about McAfee security. This is also a product of Intel as it acquired it.
By being an OEM and ODM
OEM and ODM stand for original equipment manufacturer and original design manufacturer. Intel acts as an OEM and ODM for many computers. OEM means it manufactures products or components for other companies. Those companies sell those products or use them in their products and sell them to their customers by putting their label on them. ODM means Intel not only manufactures the products or components but also designs them. Many companies use the components manufactured by Intel in their products.
Intel Operating groups
These services include various groups of Intel that specialize in different things. The client computing group is responsible for designing platforms for smartphones, desktops, and tablets. They are also responsible for designing wireless, wired, and mobile communication products. The software and services group deals with security-related products. Datacenter group deals with storage and network platforms. They also have a group for the Internet of Things. The Intel Operating Group generates revenue of $55.4 billion. More than half of this revenue is generated by the client computing group.
Conclusion
This is the business model of Intel. Today Intel generates the most revenue by selling computer components than any other company. Not only that but top companies like Lenovo, Dell, HP, and Apple use the microprocessors manufactured by Intel. You can know more about the business models of other companies on Postling. Click here to know about the business model of Amway.
