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From its 1970s purchase of watch company Microma to its 2010 purchase of McAfee, Intel’s sallies into M&A have been a bit of a joke.
McAfee cost $7.6 billion and went, six years later, at a valuation of $4.2 billion.
The 1999-2000 $10 billion spending spree on telecoms companies apparently delivered zilch. I once asked an Intel president if there was any measurable return for the outlay only to get a very dusty answer.
The foray into ARM cores derived from its purchase of part of DEC’s old business delivered nothing. When Marvell bought the business they put the cores onto advanced processes and did rather better.
Although Intel’s modem business has won Apple slots its technological performance is still way below Qualcomm’s despite the 2010 purchase of Infineon’s wireless business which, in 2010, had technologically competitive modems.
The $16.7 billion Altera purchase hasn’t, so far, been so bad with Altera still on the same market share (36%) as it had before the takeover. The shadow over Altera is, as with XScale, that its FPGAs won’t be migrated to the latest processes in a timely manner and that Xilinx will get to 10nm first – which, in the FPGA business, is a pretty key determinant of market success.
But the fact that Altera doesn’t seem to have got worse under Intel ownership suggests that Intel might, just might, be learning how to handle its acquisitions.
Now whether driverless cars are a good business to get into at this stage is another subject entirely.
Sadly, Jamo I’m sure you’re right. Wall St is dictating the Intel ‘growth’ strategy.
Perhaps Intel are responding to pressure from the markets. They’ve been told by analysts they need to make inroads into the next big thing and this is them responding.
Absolutely Big Softie it looks a daft move to me. Intel is desperate for growth but relying on driverless cars to get it seems barmy.
I wouldn’t bet money on this being a runaway success. Your last paragraph concerning the market potential is surely key. Time to profit in this space is going to be longer than predicted, because it always is in high-tech. In this case, the application is the most extreme example ever of an exciting expensive technology trying to lead a massive mature market which as yet declines to fully accept the proclaimed benefits.
Intel have placed a high cash value on this venture, indicating they are prepared to seriously bank roll it for the foreseeable future. Once absorbed into the fold, it represents by far the best opportunity on the table for the premier league “glass is half-full…we only look forward” bullshitters to get involved at the helm for some decent communal ego-busting leadership. That leads to over-commitment and under-delivery on timing and sales. The question then is how long Intel will be prepared to sit out a(nother) costly rising star opportunity, which depends on how their core business is doing and those quarterly numbers. Interesting!
Yes maybe so Jamo, they have $17bn cash but they have $35bn debt. And Yes I think Intel’s been a bit of a tart in the past – running after new markets, getting there too late and making a hash of them,
‘More money than sense’ as the old adage goes. I also wonder if they have people who really understand markets, as they seem to be very reactive, and it takes them so long to build up a case, then make a move, that the fad has gone.