What Does Intel Corporation (INTC) Have Up Its Sleeve?
Published on May 23, 2013 at 9:30 am by The Motley Fool in News
This month marks a milestone for chip juggernaut Intel Corporation (NASDAQ:INTC) . The largest chipmaker in the world by revenue has transitioned to new CEO Brian Krzanich, following the planned retirement of Paul Otellini. One of the most important tasks that Krzanich is faced with will be positioning Intel within the mobile market, an area that Otellini fumbled even as the outgoing exec had his fair share of accomplishments as well.
To that end, Krzanich has reportedly set up a "new devices" division in an internal reorganization. That could mean almost anything, and there's not much other detail surrounding the leaked memo. For context, Intel Corporation (NASDAQ:INTC) currently has five operating segments: PC client group, data center group, other Intel architecture, software and services, and all other.
Revenue (MRQ)
% of Total Revenue (MRQ)
PC Client Group $8 billion 64%
Data Center Group $2.6 billion 21%
Other Intel Architecture $978 million 8%
Software and Services $588 million 5%
All other $437 million 3%
Total $12.6 billion 100%
Source: 10-Q. MRQ = most recent quarter. Figures may not sum because of rounding.
The PC and data center segments tend to generate all of Intel Corporation (NASDAQ:INTC)'s operating income. The focus on getting Intel silicon into new devices is also precisely what helped Krzanich score the top position, according to The Wall Street Journal. Intel Chairman Andy Bryant was quoted as saying that the pitch "absolutely" helped Krzanich become CEO.
We're not just talking about traditional mobile devices like smartphones and tablets either. "New devices" could include entirely new product categories like wearable devices, among others. The highest-profile wearable device en route to market is Google Inc (NASDAQ:GOOG) Glass. The high-tech spectacles strangely use a Texas Instruments Incorporated (NASDAQ:TXN) OMAP processor, even after TI famously ditched mobile last year.
Still, Google Inc (NASDAQ:GOOG) has expressed openness toward using Intel Corporation (NASDAQ:INTC)'s chips, optimizing Android for the company's x86 architecture a couple of years ago. That partnership hasn't translated into meaningful smartphone wins, even though Intel has a couple of Android devices under its belt now. Like most things, Google Inc (NASDAQ:GOOG) is relatively agnostic and just wants to broaden its reach by whatever means necessary.
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