We had no immediate use for the silicon fabrication plant where memories were made and had to shut it down - Andy Grove - Only the Paranoid Survive
CHIPMAKER Intel admitted on Thursday that it was late to the smartphone and tablet game, and missed an opportunity by sticking with the declining PC market instead of investing in the massive popularity of the iPad and other tablets that run on chip designs from rival ARM.
Speaking at the firm's annual investor relations day on Thursday, Intel chairman Andy Bryant said Intel was "paying the price" for not recognising the market shift from PC towards tablets, which thus allowed rivals to get a foothold in the mobile sector.
"I was personally embarrassed that we seemed to have lost our way," said Bryant. "We were in denial on tablets," he added. "It put us in a hole, and we are paying the price for that right now."
This is the first time Intel has admitted it was beaten at its own game, and made mistakes that lead to flat sales amid billions of dollars in spending on new manufacturing technology.
For the most part, it seems Intel was convinced that focusing on the traditional PC, namely Microsoft software, was the right way to go. It's obvious to the company now, however, that consumers are all about mobility, as delivered by the Android and iOS mobile operating systems.
"For the last decade we've essentially been 100 percent Microsoft on the client," added PC chief Kirk Skaugen, acknowledging the growing demand in the market for Android and Apple mobile products. Skaugen then took the opportunity to announce plans to enhance Intel hardware's support for "the tier-one operating systems", which include Linux, Chrome OS, Android, and iOS as well as Windows.
It seems that the world's largest chipmaker has finally opened its eyes to mobile, but it is perhaps too little, too late.
Discussing what the firm intends to do to catch up, Intel CEO Brian Krzanich took the stage at the investor meeting, giving the industry an overview of the company's strategy. He also admitted to mistakes made and said that the firm had been "too insular" in recent years.
"We want an outside-in view, we want to be sensing. We'd become insular, we'd become focused on what was our best product versus where the market wanted to move," Krzanich said during his presentation, his first major pitch to shareholders after taking over as CEO six months ago.
Krzanich detailed some major changes in light of Intel's late realisation of mistakes made in relation to the mobile market.
"We will embrace where the market moves, that's one of the big changes that's occurring," Krzanich said, suggesting that the declining PC business will become a springboard for Intel's new technologies.
Krzanich explained the company is diversifying its portfolio for tablets and smartphones, while mentioning what the firm will change and what it won't change moving forward. According to Krzanich, Intel won't move away from its dedication to Moore's law, the industry term coined by Intel co-founder Gordon Moore, which suggests that computing will always get cheaper and smaller.
What will be different is that Intel will take on board what's going on in the market, and respond to industry trends as opposed to trying to control where the market is going.
"We're going to become more and more market driven, we are going to have an outside-in view, we are going be sensing what's going on in the ecosystem [and the] industry and getting ahead of that whether it's in the data centre, or whether it's in the farther end of the internet of things or in between what's happening between the traditional PC and tablets mobile products like the phones," he said.
As part of this Intel announced plans for new chips in its Atom range with two products set for the coming years. The first is called Sofia and will be ready for entry and entry-level products by the second half of 2014.
What's notable about Sofia is that Intel plans to have the chip developed outside its own factories, in a recognition of its need to move faster and gain traction in entry level markets.
The second is called Broxton, which is an Atom processor that is designed to be on a par with Intel's Core processors. This will be available by mid-2015 and Krzanich touted its capabilities.
"Broxton is targeted towards performance segments of phones and tablets. Think of it as the next-generation Atom," he said.
The push to bring these new processors to market is part of Intel's drive to quadruple its position in the tablet market in the next 18 months, as it hopes to have over 40 million devices using its systems.
So now that Intel has established its mobile footprint, 2014 will be about growing that and "investing to scale".
Intel doesn't believe it is too late to the mobile game that's led by ARM, but we're not so sure. µ
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