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Intel's Otellini plots little growth path

Bigs bucks from small stuff

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The current state of Intel’s business is “a little better than we expected” according to its chief executive and president, whose promised to keep things moving by thinking small - Atom small to be specific.

Speaking at Intel's Investor Meeting 2009, in Santa Clara, California, Paul Otellini described what he called the company's growth areas as netbooks, handhelds, consumer electronics (CE), and embedded applications.

Otellini forecasts that by 2011, the silicon market - not the final-product market - for each of these four areas will be around $10bn (£6.5bn).

And Otellini plans to get a hefty chunk of that action.

Not that Intel will abandon its traditional markets of high-end computing, where its Intanium and Xeon processors play, or what Otellini called the "classic PC business", where the Core microarchitecture holds sway.

In fact, he referred to the PC market as "a pretty good business" that will - after the current meltdown-infused sales slump - grow by about a 100 million units during the next three years to 400 million units.

And although "the old, boring, beige desktop that we all grew up with is about dead", there's still money to be made in what he referred to as "microsegments". That's things like enthusiast machines from Voodoo and Alienware, small remotely manageable business desktops, consumer desktops such as the HP Touch for what he described as "lifestyle, kitchen applications," and nettops, which Otellini called "the under-recognized cousin of the netbook."

But Otellini was clear that Intel's passport into the growth markets is the company's Atom architecture.

Netbooks "will bring the next billion people into the world of computing," Otellini said, and cited that market's extreme growth during 2008, dwarfing the rates of rise for both the Wii and the iPhone.

Calling handhelds the evolution of the smartphone, he also said that by 2011 the total number of smartphones will be between 200 to 250 million - a market Intel will be targeting while leaving the lower end to other silicon suppliers.

Otellini says Intel plans to "go after somebody else's share" in the embedded applications arena by moving the Atom into the system-on-chip (SoC) market. That's a direction telegraphed by the company's recent partnership with Taiwan's megafoundry, TSMC, a move that gave Intel access to the third-party IP (intellectual property) necessary for success in the SoC area. He specifically called out the MIPS, Power, and ARM architectures as new competitors in the lower end of the embedded market, and said that two-thirds of the customers that the company is dealing with in this space are new to Intel.

The fourth growth area, CE, "is moving towards us in many ways" according to Otellini, because it's moving toward the internet as its source of content.

Finally, putting some firm numbers on why Intel plans to move into these four markets in a big way, Otellini said the number of units sold in these areas plus PCs today is about one billion units. He projects that that number will double by 2012.

"This is a big market," he (under)stated, adding that "today we serve only about a third of this business. As we move our architecture into these new segments, everything [in those areas] is now an addressable market for Intel Corporation.

"That's what we're aiming at. This is where we think the growth opportunity is for us." ®

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