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2012-11-20 07:26:56
Nov 19th 2012, 20:45 by M.G.| SAN FRANCISCO
HUNTING for a new leader in the midst of a brutal battle for market leadership
is hardly ideal. But that is the predicament in which Intel now finds itself.
On November 19th Paul Otellini, the firm s chief executive (pictured),
surprised the industry and investors by announcing that he would retire from
the semiconductor behemoth next May several years before he had been expected
to stand down. The company s board said in a statement that it will consider
both internal and external candidates to fill Mr Otellini s shoes.
Whoever steps into them will have a tough act to follow. Under Mr Otellini s
eight years at Intel s helm, annual revenue rose from $39 billion to $54
billion and earnings-per-share grew from $1.40 to $2.39. But the computing
landscape is changing rapidly, and in ways that threaten Intel s dominant
position in the semiconductor business. The company flourished as part of the
Wintel alliance shorthand for Microsoft s Windows operating system and Intel s
chips, which still power the majority of personal computers. But PC sales have
come under pressure as people have embraced mobile computing devices such as
smartphones and tablet computers.
Both Microsoft and Intel pooh-pooh talk of a post-PC world . But there is
little doubt that the centre of gravity in computing is shifting towards mobile
devices, many of which use power-efficient chips designed by ARM Holdings, a
British firm. It licenses its processor designs to firms such as Qualcomm and
Nvidia, who get the chips made by contract manufacturers such as
GlobalFoundries and TSMC. Qualcomm, which is a good proxy for the ARM
ecosystem, recently saw its market capitalisation exceed that of Intel (which
has three times the revenues of Qualcomm).
Intel still has some impressive strengths, including its prowess in
manufacturing and its formidable track record in research and development. But
it has struggled to get its chips adopted by mobile-device makers. And its
efforts to promote PC sales through new devices, such as super-slim Ultrabooks
that use its chips, have been disappointing. All this may explain why Mr
Otellini is leaving now.
In the past, the company has dipped inside its ranks to find new bosses and it
has some talented executives in its upper echelons, including Stacy Smith, its
finance chief, and Brian Krzanich, its chief operating officer. However, the
fact that the firm s board has said it will consider external candidates
suggests Intel s directors may be looking for someone from the ARM universe to
help guide the firm rather than for a chip off the old Intel block.