The tagline from <i>Innovator's Dilemma</i> is that <i>well-managed</i> companies can get into trouble when they are being disrupted. The reason is that it's normally good business to get rid of low-margin products and focus your resources on the ones that make the most money. And then someone takes over the low end and expands into the high end.<p>But Intel is not falling for that one. They have made the Atom, a slow, cheap, low-power chip that competes directly with ARM. That's likely a wise move, but Intel now has the problem that low-margin chips are still bad business. They have to have their expensive best-in-industry fabs make low-margin Atoms, when they would much, much rather have them make expensive Xeons.<p>At one point they made a deal to have Atoms manufactured at TSMC, which would have helped a lot with this problem, but apparently that deal didn't work out. Even if it <i>had</i> worked out, the Atom would no longer have the process advantage, and then backwards compatibility would be the <i>only</i> advantage for x86. With Windows becoming less and less relevant, that's a big problem, considering the technical advantages ARM has over x86.<p>So fundamentally, Intel has a problem that CPUs are becoming commoditized, which means they will either have to take much lower margins or retreat to the high end. Both scenarios are unpleasant for them.