Intel Offers Mea Culpa to Analysts But Remains Confident Looking Forward

By Ed Silverstein November 25, 2013

Intel is going in a new direction that is more customer-friendly and more attune to the market, company leaders recently told analysts.

Brian Krzanich, the company’s new CEO, who took over about six months ago, admitted past mistakes to analysts earlier this month.

Sales have not increased as much as the company would have liked and Intel has been spending a lot of money on manufacturing technology, according to a report from Oregon Live. Meanwhile, ARM Holdings has done better that Intel with such popular tablets as the iPad.

Both Krzanich and chairman Andy Bryant offered the analysts a “mea culpa,” the report said.

“I was personally embarrassed that we seemed to have lost our way,” Bryant was quoted.

The lack of success with tablets “put us in a hole,” Bryant added. “We’re paying a price for that right now.”

“The future is simple, computing devices are going to be smaller,” Bryant continued in his remarks. “We were in denial of tablets.”

“We’d become insular,” Krzanich said in his own talk to analysts. “We’d become focused on what was our best product versus where the market wanted to move.”

He suggested the company now will be more focused on providing offerings for data centers, tablets and smartphones, Oregon Live reported. In particular, when it comes to data centers, the company predicts it will increase numbers by 15 percent a year through 2016 – or longer, Oregon Live said. Also, the Atom mobile chip will feature Intel’s “most advanced chip designs by the middle of 2015,” the report adds.

The remarks before analysts also touched on PCs. “The PC market is beginning to see signs of stabilization,” Krzanich said, adding declines in the market appear to be slowing – All Things D reported. “What we need to watch is the emerging market.”

Intel has been successful too with a Samsung Galaxy tablet. “For us, 2013 was a year of establishing a footprint,” Krzanich said about the mobile sector. During 2014, Intel wants to at least quadruple its tablet business, to reach more than 40 million units of production. Krzanich said, “We’ve got to have that scale.”

It is also being reported in the news media how Intel may open its fabrication operations to competitors, according to Barron’s. “We'll open the foundry to any company capable of utilizing our leading-edge silicon,” Krzanich said. In fact, Blayne Curtis of Barclays said in a recent note that Intel is showing "a greater willingness to partner with any company that might benefit from Intel's best-in-class process technology."




Edited by Cassandra Tucker

TechZone360 Contributor

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