Intel banks on wearables as the next big computing platform

Intel CEO Brian Krzanich said although the company missed the shift in the market to tablets, it will not miss the move to wearable computing, which he said will be the next phase of computing as consumers ditch PCs in favor of mobile devices.

Speaking at the Re/code Code Conference, Krzanich said Intel wants to power the technology for a wide range of wearables, saying that the chipset giant is focusing on the "eyes, ears, wrists and torso."

"What you're going to see is an explosion of sensors," Krzanich said while wearing a so-called "smart shirt" that constantly measures heart rate and other health data. However, Intel doesn't make the sensors yet and does not plan on making smart clothing.

"Intel is not the right person to be making clothing or even wristbands," he said. "We want to provide the fashion industry with the technical solutions." Research firm Juniper Research has forecasted that retail revenue from smart wearable devices, including smart watches and glasses, will reach $19 billion by 2018 compared with $1.4 billion in 2013.

Intel does make Edison, an SD-card-size computer that can be used with Internet-connected wearables and other small devices destined to play roles in the Internet of Things. Edison is designed to work with most any device--not just computers, phones, or tablets, but also objects such as chairs, coffeemakers and even coffee cups.

At the conference, Krzanich admitted that "we missed the tablet. We missed that transition." He said at first Intel figured that devices such as the iPad would be used just for content consumption and that people would move back to PCs, but that has not happened. "It took a while for us to acknowledge and accept that data," Krzanich said, according to Re/code.

Still, the Intel chief said he is "not giving up on the phone and the tablet space." Intel aims to ship its chips inside 40 million tablets by the end of 2014, the vast majority of them running Android. If Intel hits that goal it will go from about zero market share in tablet chips to 15 to 20 percent. "That's not bad growth," he said.

In the first quarter of 2014, Intel's Mobile and Communications Group, which houses its wireless chip business, had an operating loss of $929 million on revenue of just $156 million. That compares to revenue of $7.94 billion in the first quarter for Intel's PC business. The mobile unit had an operating loss of $1.78 billion in all of 2012 and $3.15 billion in all of 2013.

In contrast, Intel's Internet of Things Group reported $482 million in revenue for the first quarter, up from $365 million in the year-ago quarter. The unit had an operating profit of $123 million, up from $67 million in the year-ago period.

For more:
- see these three separate articles from Re/code
- see this WSJ article (sub. req.)

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