Intel by the numbers
September 4, 1997, 12:00 p.m. PT
special report Since releasing its first microprocessor in 1971, Intel (INTC) has become one of the largest and most profitable corporations
in the world. Like oil companies, telecommuncations giants, and other
megacorporations, its success has pretty much depended on one product.
Intel by the numbers, 1996
Revenue: $20.85 billion
Earnings: $5.157 billion ($5.81 per share)
Revenue by sector (estimate)
Sources: Intel; Dataquest
Since releasing its first microprocessor on November 15, 1971, Intel has
produced 18 generations. Its first chip was the 4004.
Intel accounted for $14.9 of $18.8 billion in worldwide microprocessor
sales in 1996. This translates to a 79.4 percent market share by revenue
and 28 percent share by unit sales.
Within the computing field (microprocessors are used in servers, desktops,
laptops, and workstations), Intel accounted for $14.6 out of $16.6 billion
in total sales in 1996. Intel earned 88 percent of the market by revenue
and 77 percent by units shipped. Within the X86 market, Intel held a 95
percent market share. (source: Nathan Brookwood, Dataquest)
Approximately 10 to 12 million units shipped in 1996, accounting for $1.2
more in revenue, Brookwood estimated. Mario Morales, director of
semiconductor research at International Data
Corporation, puts the total closer to $2 billion. In conjunction
with board facilities, Intel also manufactures limited numbers of computers
that incorporate Intel boards, said other sources. Intel partners have
often questioned whether this is Intel's springboard into desktop computing.
Intel recently announced the 440LX chipset, which will be the basis for 3D
desktop computing. Although other manufacturers were operating in the
field, Intel's entry effectively chased them out, said several sources.
Intel chipsets now have 100 percent "attach rate" with sales of
microprocessors, according to Southcoast Capital, giving it a market share
equal to that of the processors.
However, Advanced Micro Devices has
released its own
Intel entered this market in 1997 with the purchase of Chips and Technologies. For fiscal 1997,
Chips reported $168 million in revenue and $36.2 million in earnings. The
company accounted for approximately 47 percent of notebook
graphics chips and 9 percent of the desktop market.
"With graphics, [Intel] could hit a 50 percent attach rate in a
couple of years," said Ashok Kumar, Southcoast Capital.
Intel pulled in approximately 33 percent of market in 1996, according to
Jim Handy, memory analyst at Dataquest. Revenue came to $950 million.
"Where Intel is selling a good bit of memory is in cell phones and auto
engine controllers. The stuff that sells into a PC they shy away from,"
Intel ranks fifth in this market with a seven percent share, according to
Tom Starnes, principal analyst, embedded products, at Dataquest. "In the
embedded market, there is a world of different processors and different
needs," he said. Besides coming in wider varieties, embedded processors,
which act as the brain center in navigation devices, appliances, and other
non-PC appliances, aren't nearly as profitable as microprocessors.
The chips sell for between $2 and $25 and carry relatively low margins.
Overall, the market accounts for around $15 billion in sales. Motorola ranks first here with a 17 percent
share. AMD is another active participant.
Although Intel will encourage hardware vendors to make devices that use
embedded processors, don't look for the company to become a driving force
in this area, added Starnes. Intel will not likely try to become the market
leader in this area, he said.
Intel entered the market in 1979 as part of team to develop a 10-mbps
Ethernet specification. Since then, the company has released a series of
interface cards, hubs, and switches. Router technology will likely follow
through the purchase of Case Technology earlier this year.
While representing a relatively small market share, "They are obviously
well recognized," said Esmerelda Silva, an analyst at IDC.
Intel is in a neck-and-neck race for share with Picturetel in this still-small market.
In 1995, Intel shipped 22,500 desktop videoconferencing units, more than
Picturetel, but was second behind Picturetel in terms of video conferencing
revenue, with $33.2 million, said Sujata
Ramnarayan, multimedia analyst at Dataquest. Figures for 1996, which are not
yet in, are expected to be similar.
Competition in the market should increase in the future, she added. Sony and other vendors are expected to enter
the field, creating pricing pressures. While Intel has primarily marketed
only desktop systems, the company this past May released its first group
videoconferencing system, a market segment that PictureTel currently
Intel is an investor in CNET: The Computer Network.