primarily due to this shift in market demand toward the company's more advanced microprocessors (Intel Corporation, 1997).
The market size of the microprocessor industry exceeded $25 billion in 1996. Of this total, microprocessors for PCs (the type of microprocessors produced by Intel), as opposed microprocessors for Apple Computers or Unix systems, accounted for approximately $22 billion. The degree of vertical integration in the industry is relatively low because of Intel's dominant position in the industry. Apple Computers, Digital Equipment, AMD, and Sun Microsystems all are highly integrated vertically. Together, however, these companies command somewhat less than a 20 percent market share, while Intel with a market share of 80 percent plus is not a vertically integrated company (Haber, 1997; Slater, 1996).
The microprocessor industry is driven by continual technological innovation ("Intel servers," 1997; Cohen, 1997). Technological innovation, in turn, is driven by continually increasing demands from PC users.
The threat of new entrants into the microprocessor industry is exceptionally low. The major barriers to entry into the industry are the enormous capital required to establish an industry position, and the economies of scale already attained by the current participants in the industry. Rivalry among largest firms competing in the integrated petroleum industry is high. The rivals of Intel, however, do not have the market position or the productive capacity to meet most competitive challenges posed by Intel (Upbin & Reifman, 1996).
Intel's competitors fall into four groups. First, there are the microprocessor manufacturers who produce processors for Unix platforms. Sun Microsys
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