by Jeff Dorsch
Paul Otellini – courtesy IntelWhen Paul Otellini, the president and chief executive officer of Intel, retires next May, he will have served for eight years in the giant chipmaker’s top post. Intel has had five CEOs since it was founded in 1968. That means he will step down shy of the average nine-year tenure for an Intel CEO.
The announcement of his retirement comes as Intel is making the transition to the post-PC era of computing. Mobile devices, principally smartphones and tablet computers, are increasingly becoming the choice of consumers for accessing the Internet, checking e-mail, going on social networks, and playing games and videos. Corporate enterprises are recognizing the trend in adopting “bring your own device” (BYOD) policies for their employees. Desktop PCs are dirt cheap these days and laptop computers are scarcely more expensive than desktops.
The trend to mobile electronics has hit hard at Dell and Hewlett-Packard, the one-time champions of the PC industry. These former stalwarts have been been supplanted by Lenovo Group as the king of the hill in personal computers. Much of Lenovo’s recent strength is due to its home base – China – is the only global region still experiencing growth in PC sales.
Intel has seen the writing on the wall about refocusing on smartphones and tablets. The market verdict on whether it can achieve dominance in low-power mobile processors is still out; rival ARM Holdings is aggressively addressing that market while going upmarket with 64-bit processor designs that could go into high-performance servers and supercomputers, areas that have traditionally been strong for Intel’s Itanium and Xeon processors.
Advanced Micro Devices is going through its own struggle in shifting its focus from PCs to mobile devices, microservers, and other high-growth applications.
At this point, Otellini would be graded “incomplete” on whether he has successfully guided Intel into the burgeoning era of mobile electronics. The company’s Atom processors and other chips still may prove to be widely accepted in mobile designs. Maybe they will go into Apple’s iOS-based products. Maybe not.
Otellini’s greatest triumph, in the eyes of many observers, was persuading Big Blue to use Intel’s 8088 processors in the IBM Personal Computer, a decision that dealt a crushing blow to Motorola’s Semiconductor Products Sector (now Freescale Semiconductor), National Semiconductor, and Zilog. When the IBM PC was “cloned” by other computer manufacturers, they overwhelmingly chose Intel processors for their PC models, which helped Intel become the world’s largest chipmaker, measured by annual sales. That was, howver, over three decades ago.
Intel is likely to choose an internal candidate for its next CEO. Whoever that person is will inherit a substantial competitive challenge.