Vision - November/December 2007 - (Page 10)

visioNary CE’s Cutting-EdgE LEadErs] • [ by Cindy LoffLEr stEvEns Intel President and CEO Paul Otellini’s Vision W hile in Santa Clara, walk past the electric-blue sculpture in the courtyard and into Intel’s lobby—the adjacent museum showcases the company’s immeasurable semiconductor contributions that have changed the world. Great reputations have been made here: Gordon Moore, Robert Noyce, Andrew Grove, Craig Barrett and now Paul Otellini. What’s more, in this democratic corporate culture, the top leaders work in cubes alongside staff. It’s been two and a half years since Otellini a self-professed Intel “lifer” became the fifth executive to add president, CEO and director to his title. He has held numerous senior positions at Intel and also is on the Google board. The son of a butcher, Otellini, 57 grew up in a working-class Italian American family in San Francisco. He received a bachelor’s degree in economics from the University of San Francisco and in 1974 earned his M.B.A. at the University of California, Berkeley and then joined Intel as an analyst. During the 1980s he forged a strategic relationship between Intel and IBM, and during the 1990s he guided the development of Intel’s computer chip, the Pentium. Just as Otellini was taking over the reins, Intel hit tough times. The company had canceled a new version of Pentium 4 and had delayed several other products. Then Intel missed sales forecasts two quarters in a row, through the first quarter of 2006. In response, Otellini embarked on an effort to regain product leadership, ensure Intel was taking advantage of its technology and manufacturing superiority and set out to make the company more productive and efficient. Intel laid off ten percent of its workforce, sold off the Xscale mobile chip line and put a chip factory up for sale. To reposition the company, Otellini focused on its core business in silicon microprocessors. His vision is for the company to create chips, as well as software and meld them together into “platforms”. Developing multi-functional chips with integrated communication features and reduced exter- nal power requirements is crucial to Intel’s competitive strategy. Intel is an industry leader in building the most advanced chip circuitry. By year-end, it will produce chips with transistors measuring 45 nanometers, smaller than most human viruses. Intel wants to provide the manufacturers of everything from laptops and entertainment PCs to cell phones with complete packages of chips and software. The inspiration is the Centrino platform introduced for laptops in 2003—a more efficient, cooler running processor combined with Wi-Fi so it’s easy to connect to the Internet. As the first non-PhD to run the company, he has created teams of engineers, software developers, marketers and market specialists that work together to develop innovative products. To date he has signed on Apple and Sun Microsystems as customers, reorganized the company and announced plans for a new $2.5-billion chip plant in China. CE Vision had the opportunity to hear Otellini’s plans first-hand for the consumer technology market. 2006 was a difficult year for Intel, what changes have you made to improve the company’s competitive position? In 2006, we decided that it was time for the company to take a good hard look at our operations and structure. We reaffirmed our core competencies around communications architectures and silicon platforms focusing on worldwide markets in technology and on the benefits of Intel’s scale. We tested all of our business directions against those attributes to ensure we were leveraging the strengths of the company. In some cases where we weren’t, we decided to exit some businesses. In addition, we took a once every 20-year look at the company in terms of overall expense levels and overall investments in various areas and we benchmarked every aspect of the company top to bottom against world class standards. Our goal is to be world-class in our spending levels, drive up productivity and drive decision-making improvements. We also continue to invest in employees. Our view is that many businesses that match our capabilities are huge opportunities—one of them is consumer electronics and the other is mobile devices that have both computing and phone capability. Those are businesses where we believe we have strong opportunities but the price points for the silicon inside those devices needs to cost a lot less. These are entirely new classes of products but need price points of traditional consumer electronics. At CES I expect to talk about the progress of these various product lines. What is evolving? What are the opportunities? The timing of CES is good for us, the venue is right and the audience is right. What was new at the Intel Developer’s Forum? Can you talk about the microprocessor dubbed Penryn, based on 45-nanometer technology? There were four days worth of conference sessions at IDF so there was a lot of information sharing. Among the highlights at IDF were details we provided about a family of products called Penryn, the world’s first 45-nanometer microprocessor. We also showed the first public demonstration of the next-generation product from Intel code-named Nehalem—a significant improvement in the overall performance over Penryn. It was significant that we could demonstrate working Nehalem processors so far in advance. www.ce.org 10 November/December 2007 http://www.ce.org

Table of Contents Feed for the Digital Edition of Vision - November/December 2007

Vision - November/December 2007 Contents Shapiro's Spectrum In This Issue The Economist C4 Visionary Tech Speak Going Global Eye on Business Tech Policy Special Supplement: CES Unveiled 2008 CES Technologies to Watch Eastern Europe Embraces CE M&A Fest Displaying the Future CEA Newsline Market Insider Just the Stats

Vision - November/December 2007

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