Ina Fried

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Intel Chairman: “We Seemed to Have Lost Our Way”

Long a beneficiary of the falling cost of computing power, chipmaker Intel acknowledged Thursday that it was beaten at its own game.

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Moore’s law, the industry term coined by Intel co-founder Gordon Moore, suggests that computing will always get cheaper and smaller, but it was Intel’s rivals that benefitted from the most recent shifts to tablets and mobile devices.

“We’re paying a price for that right now,” Andy Bryant, a longtime Intel executive who now serves as the chipmaker’s chairman, explained Thursday.

The data was there to see the shift coming but Intel missed it, Bryant said, kicking off a day-long investor meeting at the company’s Silicon Valley headquarters.

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

In picking Brian Krzanich as CEO, Bryant said the company found someone who would look at the world as it is, not as how Intel wishes it could be. “His impact on strategies is starting to be felt.”

For his part, Krzanich said Intel still believes its technology can be at the core of all types of computing devices, from the biggest servers, through PCs and tablets, to phones and smaller devices. Also, the company touted its growing effort to let other companies use its manufacturing prowess.

“The PC market is beginning to see signs of stabilization,” Krzanich said. It’s still forecast to decline, but that decline is slowing, he said. “What we need to watch is the emerging market.”

PC prices have also been dropping to never before seen lows, including capable computers below $300. In the data center, the company is forecasting continued growth of 15 percent through 2016.

On mobile, Intel has struggled, but Krzanich pointed to a few design wins, the most notable of which is a single Samsung Galaxy tablet model.

“For us, 2013 was a year of establishing a footprint,” Krzanich said.

In the coming year, the goal is to more than quadruple Intel’s tablet business, pushing it to more than 40 million units.

“We’ve got to have that footprint,” Krzanich explained. “We’ve got to have that scale.”

The company wants to bring PC technology to Android, including enterprise support and 64-bit processing. Intel, Krzanich said, will be in tablets throughout the market, including models below $100.

Intel, he said, also allows computer and tablet makers to create a single design that can be loaded with multiple operating systems, whether Windows, Chrome OS or Android.

On the phone side, Intel is going to focus more on larger players, Krzanich said. Until now, Intel has mostly targeted smaller manufacturers willing to sell devices built largely on Intel-based reference designs.

Krzanich also talked about two upcoming chips. Broxton, due in mid-2015, is aimed at the high end of the market. Sofia, due in the second half of 2014, is aimed at the value end of the market. Sofia integrates more features, but is made outside Intel’s factories. The following year the company will aim to bring production in-house using a 14-nanometer chipmaking process.

“Three months ago this wasn’t on the roadmap,” Krzanich said of Sofia.

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I think the NSA has a job to do and we need the NSA. But as (physicist) Robert Oppenheimer said, “When you see something that is technically sweet, you go ahead and do it and argue about what to do about it only after you’ve had your technical success. That is the way it was with the atomic bomb.”

— Phil Zimmerman, PGP inventor and Silent Circle co-founder, in an interview with Om Malik