Intel's strategic inflection point
It is my opinion that Intel faces that again.
Let us see what happened the last time. Circa 1980's : Intel's main product line - memory modules - had been all but cleaned up the Japanese. It was a turning point, to invest money and Ph.D's behind its mainline memory business, or to drop everything, turn around and try making processors. In retrospective, it was the most amazing decision, because it put them ahead in a curve which was just about to rise. But if I try to think as Gordon Moore, Bob Noyce or Andy Grove would have thought, I would have been faced with the same crossroads - why abandon a perfectly good product, which we can almost win and rather turn around? The answer was in the world around them - an increase in necessity to compute, primarily by businesses, was something that was only going to grow.
Circa 2005: Computing power is commodity. A record of the fastest supercomputer is made and broken in less than half a year. It again brings us to the need to look at the world around us. There have been news of Intel first threatening to and then actually not backing down from low-end desktop markets. However, that is not what counts - the world today revolves around what I call Media Delivery Platforms. ITunes/IPod/Mac Mini is one such platform.
The Cell-Processor/PlayStation3 promises to be another, as is XBox/XBoxLive. More and more business applications run on platforms and operating systems (Linux + Xen virtualisation), that allows multiple operating system, multiple software running parallely and completely compartmentalised. It is in Media Delivery Platforms, where people can be locked in.
Is this technologically possible?
Certainly. Technologies like Palladium enforce Digital Rights Management (DRM) at the hardware level. But to ask people to buy into your products means that your products are easy available and serviceable at the corner store. Which means it would be a really bad idea to move out of the low-end desktop market. Because it is these platforms which are tried, tested, and are cheap enough to penetrate the kitchentop markets.
It is here that the war for the next inflection curve will be fought.