Insider to lead Intel out to new mobile ground

PUBLISHED : Saturday, 04 May, 2013, 12:00am
UPDATED : Saturday, 04 May, 2013, 4:31am

Intel, the world's largest chipmaker, named chief operating officer Brian Krzanich its chief executive, leaning on an insider to accelerate a shift towards mobile devices as the personal computer age wanes.

The former factory manager will become the sixth chief executive in Intel's history at the annual shareholder meeting on May 16, when Paul Otellini steps down.

In opting for Krzanich, 52, Intel hewed to a tradition of hiring for the top job from within, backing a three-decade veteran who firmly grasps the complexities of making the chips that run more than 80 per cent of the world's PCs. Yet as Intel lags behind Qualcomm in the production of semiconductors for smartphones and tablets, the decision not to appoint an executive who has expertise in mobile technology carries risks.

"A fresh set of eyes from an external candidate might have been a good move," said Cody Acree, an analyst at Williams Financial. "Intel has to be ultra-successful in another large market or in a lot of markets to reinvigorate your growth."

Krzanich's main challenge will be jump-starting Intel's efforts to gain ground in the market for chips that run mobile devices. The PC industry, Intel's stronghold, is facing its second consecutive decline in annual sales this year while tablets and smartphones continue to surge.

Intel has spent more than a decade and billions of dollars trying to gain a foothold in smartphones, yet chips made using technology from ARM still account for more than 95 per cent of that market. Qualcomm is the leader in semiconductors for handheld devices. Intel ended last year with less than 1 per cent of the market for phone microprocessors.

Krzanich said he presented his strategy for speeding up Intel's entry into mobile to the board and will make it public once it has been shown to management and staff.

"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," Krzanich said.

Krzanich's elevation to chief executive returns an engineer to the top job at Intel, which was founded by Gordon Moore and Robert Noyce in 1968. It was run by Andy Grove and then Craig Barrett, who have advanced science degrees. Otellini has degrees in economics and business.