Alan,
re:b) to die trying is not acceptable to majority of shareholders, when there are so many a lot more attractive options.
It is certainly a high risk strategy, but one that was required to hold onto the bulk of the CPU market. I do not see any other viable business plan for them...
Intel is still, even under very pessimistic scenario going to hold onto the bulk of the CPU market. It may be 70% rather than 85%. The gap between 2nd and 3rd is nearly as wide as between 1st and 2nd, an there are no new entrants on the horizon, so this could be a very comfy market.
Majority of industries and markets exist just fine with number of profitable participants. It seems somehow ingrained in Intel's DNA that Intel needs to crush everyone, many times, regardless of whether it provides any benefits to the shareholders.
Take Intel's entry into the NIC market, which hastened demise of 3com. There was no benefit to Intel from the entire episode. The NIC market was going to go away anyway, since the integration process is inevitable. The networking and telecom equipment business seems to need a total, undivided attention of participants, and intel's entry into it as a side business was destined to fail.
In general, Intel's the theory was that Intel can produce the highest performing silicon, therefore, it should be easy to just apply this silicon at markets that need high performance semiconductor devices. This has not worked. The fact that it was not working was known for a while, but it was swept under the rug of high CPU profits. Nothing changed about these side businesses of Intel, except that their losses are harder to sweep under the rug, as CPU profits diminish.
Anyway, my take is that Intel management should be looking after the shareholders. The current course of action of reckless price cuts is bad management.
OTOH, divestiture from money losing markets is a great idea, so not all is lost.
Joe
