Bloomberg News

Intel CEO Krzanich Prioritizing Atom Chip in Mobile Push (2)

June 28, 2013

Intel Corp. (INTC:US) Chief Executive Officer Brian Krzanich is devoting more resources to processors for smartphones and tablets as he works to speed the transition to mobile chips amid a global personal-computer slump.

The company will use the same advanced manufacturing for the Atom line of low-power, cheaper chips for smartphones and tablets that had previously been set aside for the more robust Core processors for desktops and laptops, Krzanich told reporters in San Francisco today. Intel had resisted the shift in consumer tastes to mobile gadgets in an attempt to maintain its dominance in the PC market, he said.

“As companies get bigger and more and more successful, accepting big changes gets harder,” he said.

Krzanich is working to reverse declining sales at the world’s largest chipmaker with faster, more energy-efficient processors for handheld machines. As people increasingly turn to mobile devices to surf the Web, send e-mail and watch video, the PC business is set to contract for a second straight year.

To hasten the shift to mobile, Krzanich said Intel is holding weekly meetings on Atom to speed development of new versions. Intel has gone years between major updates for Atom in the past.

“We haven’t been as clear about Atom’s position prior to this,” Krzanich said.

New Business

Intel also is open to manufacturing chips designed by other companies as a way to lure new business, Krzanich said. Those sorts of deals will be considered on a case by case basis.

“It depends on how strategic they are,” he said.

Krzanich is continuing to evaluate Intel’s role in the television business. The company has said it plans to begin selling a set-top box offering Internet-based TV this year. Negotiations with media companies are ongoing, and Krzanich said he hasn’t determined what the business model should be.

“We are not experts in the content industry and we’re being careful,” he said. “From a technical standpoint we’ve built a game-changing device.”

Shares of Intel increased less than 1 percent to $24.23 in New York. They have advanced 18 percent this year, compared with a 13 percent gain for the Standard & Poor’s 500 Index.

Intel’s sales won’t start growing again until next year, according to the average of analysts’s estimates (INTC:US) compiled by Bloomberg. This year, they will be little changed at $53.6 billion, analysts project. By contrast, revenue for Qualcomm Inc (QCOM:US), the biggest maker of mobile chips, will surge 28 percent in 2013.

Management Changes

Krzanich, a former factory manager, was promoted (INTC:US) to the top job at the Santa Clara, California-based chipmaker in May, succeeding Paul Otellini, who retired. To keep tabs on the latest technology, Krzanich said he’s using a different smartphone or computer almost every month. He’s also testing out Google Inc.’s wearable computing device, called Glass. Such gadgets for the wrist, eyes and ears will be increasingly common, he said, creating an opportunity for Intel.

On May 21 Krzanich made his first public personnel moves when he took direct control of the Intel Architecture Group. Under Otellini, the unit was run by David Perlmutter, who will now lead a “management transition effort.” When Krzanich was made CEO, Renee James was promoted to president, making her the number two executive in the company.

Intel said yesterday that Justin Rattner is stepping down as chief technology officer and director of Intel Labs.

Global tablet shipments are expected to eclipse PCs by 2015 as consumers flock to smaller, more affordable machines, according to researcher IDC. Intel ended 2012 with less than 1 percent market share in tablets and phones, according to Sanford C. Bernstein & Co. research.

To contact the reporter on this story: Adam Satariano in San Francisco at asatariano1@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net


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  • INTC
    (Intel Corp)
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  • QCOM
    (QUALCOMM Inc)
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