Managing Risk and Uncertainty
RISK-TAKING IN NEW PRODUCT DEVELOPMENTS IS PART OF STAYING COMPETITIVE AT INTEL
In 2002 Intel committed some $28 billion to a new product development, including new plant construction and R&D. The company decided that notebook computers needed a boost to ensure sales growth for its own Pentium® chips. While Bluetooth technology was already available, laptops weren't yet mobile networkable device. Intel saw this as a new market opportunity, deciding to pursue a new product development called Centrino®. It combines Intel's Pentium® processor chip with its other networking systems to create a new OEM product targeting computer companies, enabling them to build the next generation of laptops, using the Centrino® wireless mobile computing platform. The result of this initiative was the first-generation Centrino®, a 130nm, 77 million-transistor chip, based on the Pentium micro architecture (code-named Banias), operating at a bus clock of 400MHz in 2004. This was just the beginning of Intel's highly successful wireless product line. In 2013 intel introduced the ninth-generation Centrino, code named “Shark Bay.” Based on Haswell microarchitecture, this Centrino uses a 22nm chip topology and 3.7 GHz clock rate, faster than existing mobile Celerons. All of this helped Intel to increase its market share in global processor market to 82 percent, a fantastic success story.
However, things did not always look that certain. When Intel decided to go ahead ...