As it navigates the personal computer industry's move to mobile, Intel
has selected a new CEO to lead the way. The company announced Thursday that Chief Operating Officer Brian Krzanich will take the helm, following an Intel tradition of picking an insider for the top job.
Krzanich will move into the CEO's office on May 16, replacing the 62-year-old Paul Otellini, who issued a surprise announcement last November that he would step down. Otellini has been CEO for eight of the 40 years he's been with the company. Krzanich, 52, has spent his entire work career at Intel since he joined the company as an engineer at age 22.
Krzanich will actually become one half of the top executive office, since Otellini's title of president will go to head of software Renee James. The 48-year-old James had also been a CEO prospect.
'Shooting Behind the Duck'
Central to the new leadership's challenges is the diminishing PC market, where Intel has become a household name with its "Intel Inside" campaign and large market share. According to research firm IDC, PC demand declined over 13 percent in the first quarter, while worldwide tablet shipments increased 142 percent and smartphone shipments 41 percent.
Krzanich is projecting a view that goes beyond tablets and smartphones.
"If you're just talking phones," he told The New York Times on Thursday, "you're shooting behind the duck." He said the company is looking at "all kinds of devices," including wearables and new home-based gadgets.
Nearly two-thirds of Intel's revenue in the past year came from making chips for the PC market, with most of the rest from servers. Krzanich acknowledged to The Times that the PC market is "not growing, let's be honest."
'Fraction of PC Sales'
Charles King, an analyst with Pund-IT, said there had been "a certain expectation" that the Intel board might choose an outsider to provide "new blood and leadership" in addressing the market challenges. Krzanich's selection, he said, indicates that the company's board "believes its basic strategy is sound," although some corporate tweaking is expected.
King said it was important to keep in mind that, while Intel needs to shift gears, the sky isn't exactly falling. He pointed out that there were about 60 million tablets sold worldwide last year, and about 330 million PCs. Although tablet's growth rate is "much more robust than PCs," he said, the total tablet sales is "still a fraction of PC sales."
What the company needs to do, King said, and what Krzanich indicated by his "shooting behind the duck" comment, is to be ready for what people will be needing three or four years from now. King added that Intel's coming Haswell processors, which he said could offer a "once-in-a-decade performance enhancement" for new levels of voice, gesture or facial interaction, could be a key to the company's success.