Break up Intel.
Put Krzanich in charge of the fabs. Split manufacturing from design and marketing. Open up all of Intel's design resources to customization by customers. Go directly after the big fabless competitors -- like Qualcomm (QCOM) and Broadcom (BRCM) in communications, Nvidia (NVDA) in graphics, ARM Holdings (ARMH) in low-power design.
If Intel's fabs were separate from its design and marketing, the company could go after Apple's iPad chip business with a clear conscience. Apple is looking to get away from Samsung, with which it's fighting a long war over patents and a life-or-death one over device share. Intel's fabs could grab that contract and, at a stroke, that would more than pay for the whole deal.
Intel's problem is that it's too integrated. Its marketing team is devoted to selling only Intel designs, and are divorced from the real world of what customers do with its chips. Its designers are producing on a single road map for the foundry, and give customers a take-it-or-leave-it choice. Device makers of all types, facing such a choice, would just as soon leave it.But what if that weren't the choice? What if customers were free to customize Intel designs, with Intel's help, and make them their own? What if Intel's hiring were aimed at finding people who could drive that software train, instead of just hardware guys? Moore's Law is a roadmap, but it's just one road. What the chip business has shown, in this century, is that there are many different roads that can be taken. Intel has missed so many of them. I don't see what, save a break-up, can get it onto those multiple paths of profit. At the time of publication, the author was long INTC but not nearly as long as he was a month ago. This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV