Intel Is Following In Nokia's Footsteps against Nvidia.
The shrinking market share of Intel.
I was recently working with a company that is competing with Intel in terms of semiconductors. Intel has lost a big market share in this sector and is continuously losing this market sector. Then it crossed my mind, Intel is becoming the Nokia of our time and Nvidia is being the Apple in this scenario.
Contrary to Nokia, Intel is not really against change per se or against AI. They are faced with a competitor that is much stronger than Apple was with the smartphones or with the iPhone. They are faced with a competitor that has in a few months reached over $2 trillion of market cap.
Imagine if you are starting a new restaurant in town and you have been running it for a while and you are succeeding in it very well. But then another restaurant, another McDonald's comes right next door and starts selling. It generates hundreds of millions of sales while you are doing practically pennies. That is the state of Intel at this stage.
Nvidia's Success and Intel's Challenge
They are simply overpowered by AI and by Nvidia. It is not their fault that Nvidia is reaching where they were today. Nvidia simply bet on a market a very long time ago and decided to focus on such a sector. For that reason they boomed and became for a moment the most valuable company in the world.
If you surf through Intel's products right now, you are going to find that they have a lot of AI initiatives in all sectors. A lot of the computer chips these days in the world still have Intel inside of them. Apple chose to go in a different way and ever since then they are actually performing a lot better when it comes to computing.
Shift in Focus: PCs vs. Data Centers
But the world isn't about the PC anymore. While Nvidia were putting their AI chips in data centers and making themselves the must-go fuel for AI, Intel on the other hand was just focusing on creating more generations of their computing chips and putting them in end consumer devices.
This is a practical example of how a company was looking at the bigger picture while others were looking at selling right now at that moment. You see when Nokia started selling a lot of phones, they were doing the exact same thing. They were simply focusing on selling what they have right now in the market at that stage.
Apple's Strategy vs. Nokia's Fate
Apple on the other hand were focused on creating a device that was called the iPhone as you know it these days and that relied on the internet. It didn't sound like a good investment at that time. Nowadays Nokia practically doesn't exist compared to Apple.
Intel's Future and AI Impact
This is the stage where Intel is going to be at because of their lack of focus on AI chips at an earlier stage. They're not to blame even though everyone knows about the story of Nokia versus Apple and it's being taught in marketing schools around the world.
You'd never expect it to come in a different shape as it was with AI. No one expected that the AI would boom in such a way. No one expected that Nvidia would become the world's most valuable company in the matter of a year just because of how AI trended.
Nvidia's Success and Future Market Disruptions
Only one company did and that was Nvidia and for that reason they are rewarded at this stage. Not only that they've created an entirely new market with a lot of options so that the Nokia situation would replicate.
So yes Intel became the Nokia of the semiconductor world but not only that Amazon could become the Nokia of the e-commerce world. Netflix could become the Nokia of the video on demand world. All of these options are opened up simply because the AI market is now where it's at.