Grove will have continued involvement at Intel in his new role as senior advisor, according to Craig Barrett, who yesterday became chairman, but the prospect of an Intel without Grove made some shareholders wince.
Grove, who was Intel’s chief executive from 1987 to 1998, had the reputation as a brilliant technologist and authoritarian leader, who was instrumental in building Intel’s brand and market position.
He was a driving force, said a former long-time employee, shaking his head.
While yesterday’s two-hour meeting marked a rare changing of the guard at Intel, the focus was squarely on Grove, whose characteristic humor was on show as he poked fun at topics ranging from his accent to his legacy. After a photo tribute and speech in his honor from Barrett, the crowd applauded on its feet for nearly a full minute.
Part of shareholders’ mixed reaction yesterday was the appointment of former president Paul Otellini, a 31-year Intel veteran, who became Intel’s fifth CEO.
It’s always a question and a concern to have a non-technical chief at a technology company, said a shareholder of more than 20 years, Roger Baird, of Otellini’s appointment.
Others shareholders, such as Rand Potter, who worked for more than two decades at Intel, said Otellini’s sales and marketing background will serve it well. Now is the time for sales and marketing, he said.
The stock market seems to smiling on the appointment, pushing shares in Intel up nearly 5% during the past week to close at $25.93 yesterday.
During yesterday’s meeting, held near Intel’s California headquarters, the new chief outlined how the company will retain its leadership position by continuing its push into markets outside the US and capitalizing on a strong PC market.
Otellini said more than 200 million PCs will be shipped this year, with notebook computers creating most growth. He pointed to Intel’s Centrino, which bundles a microprocessor and chipset as a package for wireless computer makers, driving notebook sales.
In 1999, notebooks represented 17% of total PC sales; during this year’s first quarter notebooks were 30% — thanks largely to Centrino, he said. Intel’s Centrino is a chip packet designed for wireless PC markets, including a microprocessor and chipset bundle with a Wi-Fi chip.
Packaging products for a specific application, in what Otellini calls platforms, is how Intel will grow in the future, Otellini said. After all, Centrino added $5bn to Intel’s gross margin.
Indeed, Intel hopes to duplicate its success with the Centrino bundle with its 2005 Professional Business Platform, slated for release later this month.
The platform will be Intel’s high-volume offering for business desktops for the next 12 months, said Intel spokesperson Scott Smith.
Unlike previous volume platforms, it will boast new tech features, including Intel’s active management technology, which allows IT managers to remotely access any machine on their network at any time, whether or not its hard drive has crashed or operating system is compromised, Smith said.
The platform, which has an Intel Pentium 4 processor with hyperthreading technology and a 945G chipset, does not have dual core processors, but next years’ version will, according to Smith. Pricing and availability will be announced at the product’s official launch in late May.
At yesterday’s meeting, Otellini also outlined Intel’s strategy to try to continue to find growth in international markets, which drives more than 75% of Intel’s business. The company’s fastest-growing markets are emerging countries, which a decade ago consumed 15% of PCs and today consume 38%.
To capitalize on the growing tech consumption of emerging countries, Intel is working to develop new products that are more rugged, much more sensitive to dirt, much more sensitive to power interruption or which can be shared by several family members, he said.
Otellini’s CEO predecessor Barrett pointed out that by looking outside the US for growth, Intel’s success is not tied to the sluggish US economy.
Separately, Barrett also noted the retirement of senior VP Sunlin Chou, who spent 35 years at Intel and pioneered its copy exactly manufacturing strategy, making processing in each Intel fab identical.
