Inside Intel

Inside Intel
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Originally published in 1997 and now available as an ebook. The first book on ‘the most profitable company on earth’, by the bestselling author of Virgin King.This edition does not include illustrations.Intel has been dubbed the most powerful chip company in the world and is now universally acknowledged as the only serious rival to Microsoft. Intel’s products are at the heart of the personal computers everyone uses at home and at work, yet the company has for many years been underestimated, to a large extent as a consequence of its secretive corporate culture.In this, the first book to be written about this company, Tim Jackson exposes a fascinating story of personal rivalry, powerful emotion, technological leadership, aggressive marketing, and spectacular failure and success. A company with as much paranoia as Apple, as much will to succeed as Microsoft, as much pig-headed arrogance as IBM, and led by some formidable characters who risked $1 billion and their entire trade reputation on concealing an error in the Pentium chip, provides the basis for a Barbarians at the Gate of a book by one of our leading authors.‘Has all the elements of a successful novel – power battles among industry titans, excessive wealth, ruthless management and even sex’ – Financial Times

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Fourth Estate

An imprint of HarperCollinsPublishers Ltd.

1 London Bridge Street

London SE1 9GF

www.harpercollins.co.uk

First published in Great Britain by HarperCollinsPublishers 1997

Copyright © Tim Jackson 1997

Tim Jackson asserts the moral right to be identified as the author of this work

All rights reserved under International and Pan-American Copyright Conventions. By payment of the required fees, you have been granted the nonexclusive, nontransferable right to access and read the text of this ebook on-screen. No part of this text may be reproduced, transmitted, downloaded, decompiled, reverse-engineered, or stored in or introduced into any information storage and retrieval system, in any form or by any means, whether electronic or mechanical, now known or hereafter invented, without the express written permission of HarperCollins ebooks

HarperCollinsPublishers has made every reasonable effort to ensure that any picture content and written content in this ebook has been included or removed in accordance with the contractual and technological constraints in operation at the time of publication

Source ISBN: 9780006387977

Ebook Edition © DECEMBER 2016 ISBN: 9780008240615

Version: 2017-01-05

To Emily Marbach

A Half-Billion-Dollar Mistake

ARTHUR ROCK WAS PROBABLY standing staring out of the floor-to-ceiling windows, gazing at the evening lights of the December city skyline, when the call came in.

His office suite, on the twelfth floor of a tall tower in San Francisco’s financial district, had a group of comfortable sofas at one end dominated by a collection of bold modern pictures. But Rock, who had suffered a bout of polio as a child, liked to take calls standing up. Next to his desk stood a light-coloured wooden reading lectern, which allowed him to work on his feet – like a clerk in a nineteenth-century government office.

It was hard, though, to imagine anyone further removed from the nineteenth century. Rock was a billionaire venture capitalist, who had made his money by investing in some of the most successful technology companies in history. He saw his job as doing more than simply picking winners and then sitting back to watch them get on with it. When Arthur Rock invested money in a company, he sat on its board of directors and helped to guide its strategy. In times of crisis, when his investments might be at risk, he’d be ready if needed to step in with firm advice on how the company should recover its correct course.

The incoming phone call gave no clue that today might be one of those occasions. As Rock’s secretary put the call through to his speakerphone, he heard the soft-spoken voice of Gordon Moore, chairman of Intel Corporation, opening the proceedings with his customary calm. Ever methodical, Moore would often start Intel’s board meetings by checking that all the participants had received the appropriate papers from Jean Jones, his trusted secretary for nearly thirty years.

Rock didn’t need to be told why the Intel directors were holding today’s board meeting by conference call instead of at the company’s headquarters in Santa Clara, just over an hour’s drive south of the city. Like the other Intel directors, he had read all about the crisis in the New York Times and the Wall Street Journal.

Intel’s heavily advertised flagship product, its new Pentium microprocessor, was flawed. The company had known about the flaw for some months and kept quiet about it, believing that only a tiny fraction of the millions of users of the chip across the world would ever be inconvenienced by the problem. But the flaw had been discovered by a mathematics professor, whose data had been posted on the Internet. Intel’s attempt to play down the issue had angered customers, worried investors, and ultimately provoked a storm of criticism in the media, culminating in a damaging report on CNN.

As the problem escalated, Intel’s response had been doggedly consistent. The company had kept repeating that the flaw was unimportant, and kept insisting that it required no corrective action from most owners of computers equipped with a Pentium chip. Intel had admitted that a small number of specialized users, mostly scientists or mathematicians, might need their Pentiums replaced. But Andy Grove, the company’s combative chief executive officer, insisted that the people best equipped to decide who was in this category were Intel’s own engineers. As a result, customers who wanted to return a flawed Pentium would have to call Intel and convince the company that they really needed a replacement.



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