This sounds very similar to the situation Nokia was in around 2007:
- Nokia was booming financial. Things had never been better for them in that respect.
- Nokia had XX times (!) the operating income of Apple's mobile business.
- Nokia was one of the world's most profitable corporations.
And, yet, the writing was on the wall. Nokia was doomed once the smartphone era came. That's where Intel is today: AMD crushes them on the high-end general purpose CPUs. ARM crushes them on I/O performance and the low-end for general purpose CPUs. GPUs crush Intel in the middle, for special-purpose (mainly single-precision floating point) computing.
Right now, large portions of new computer sales, and an even larger portion of the high-margin cpu sales, come from cloud computing. AMD and ARM are stealing huge market share from Intel on that front. I don't see that momentum changing any time soon.
There's a reason that Intel has 8x the operating income of NVidia while having a smaller market cap. It's not because of where they are currently--it's where they are going. Stock market valuations are forward-looking, and the future doesn't look so bright for Intel.
Nokia was fine - just switch flagship from Symbian to Android, continue feature phones and Maemo. After so many years and under different manufacturer brand is still alive.
Stock market valuations are forward-looking, but they aren't always predicting the right future.
Personally I won't be betting on or against Intel - it wouldn't shock me if they follow the Nokia route, it also wouldn't shock me if they come out with a new generation that puts them back on top within the next few years.
And, yet, the writing was on the wall. Nokia was doomed once the smartphone era came. That's where Intel is today: AMD crushes them on the high-end general purpose CPUs. ARM crushes them on I/O performance and the low-end for general purpose CPUs. GPUs crush Intel in the middle, for special-purpose (mainly single-precision floating point) computing.
Right now, large portions of new computer sales, and an even larger portion of the high-margin cpu sales, come from cloud computing. AMD and ARM are stealing huge market share from Intel on that front. I don't see that momentum changing any time soon.
There's a reason that Intel has 8x the operating income of NVidia while having a smaller market cap. It's not because of where they are currently--it's where they are going. Stock market valuations are forward-looking, and the future doesn't look so bright for Intel.