New Intel CEO Krzanich promises renewed focus on mobile

Incoming Intel CEO Brian Krzanich said he has already sold the company's board on a strategy to accelerate Intel's push into mobile chipsets. The success of that transition--away from PCs and toward smartphones, tablets and other gadgets--will likely define whether Krzanich can keep Intel relevant in the rapidly changing world of computing.

Intel CEO Brian Krzanich

Krzanich

"You'll see actions over the next couple of months that will start to unfold what that strategy is," Krzanich told Bloomberg. Krzanich will take the helm as Intel's sixth CEO on May 16, succeeding Paul Otellini. He said he'll disclose his plans internally soon, and with the public after that. Otellini has been criticized by investors and analysts for not pushing Intel more quickly into mobile.

"We see that the world is becoming more mobile," Krzanich, an Intel veteran seen as a safe choice for the CEO spot, said. "We see that the growth is moving towards those areas, and we believe we have the right assets, right product capabilities to go into those at a much, much faster rate."

In addition to naming Krzanich as CEO, Intel's board named Renée James, Intel's software head, as president--the highest ranking job ever held by a woman at Intel, according to the Wall Street Journal. Even though James has had some high-profile flops during her tenure--she was a driving force behind Intel's failed MeeGo alliance with Nokia (NYSE:NOK), for example--she received praise from the company's board.

Intel's board was mainly convinced by a new strategy--produced between Krzanich and James--to help take Intel chips into new categories of devices. "That is absolutely what won them the job," Intel Chairman Andy Bryant, who led the search, told the Journal. "Brian and Renée delivered a strategy for Intel that is pretty dramatic."

The new strategy is designed help move Intel chips beyond computers and mobile devices and into new fields, including wearable technology. The strategy "went from the very low end of computing to the very top end of computing," Bryant said.

One other path Intel could take is to push deeper into its foundry business of creating custom chips for other companies. Intel and Apple (NASDAQ:AAPL) have reportedly discussed the possibility of Apple moving its chip production efforts from Samsung Electronics to Intel.

"The question [the board members] asked themselves was, as we look at the next five to eight years, what direction do we want to take the company and what do we want to leverage?" Evercore analyst Patrick Wang told CNET. "When you ask that question, it makes sense that you stick with your guns here and flex your manufacturing muscle."

In mobile, Intel is trying to catch up to Qualcomm (NASDAQ:QCOM) both in terms of the baseband market and the applications processor market. According to Strategy Analytics' latest report, Qualcomm led the cellular baseband market with 52 percent revenue share in 2012, followed by MediaTek with 12.5 percent and Intel with 12.3 percent.

However, Intel has struggled to improve sales of its Atom-based application processors.  ZTE, Google's (NASDAQ:GOOG) Motorola Mobility, Lenovo and others have agreed to use Intel chips, but the company still trails its peers in mobile design wins.

"Job No. 1 is to break into mobility," Moor Insights & Strategy analyst Pat Moorhead told CNET. "They have to do that."

For more:
- see this WSJ article (sub. req.)
- see this Bloomberg article
- see this CNET article
- see ReadWrite article

Related Articles:
Apple could ditch Samsung for Intel in chip production
Tizen generating early momentum among developers
Intel sees Tizen as mobile growth opportunity
Broadcom to take on Qualcomm with LTE chips next year
Intel CEO Otellini to retire in May, with mobile chipsets still a source of weakness

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