Intel, the world's biggest computer-chip maker, said it is reorganizing into five business units from two in an effort to speed new product introductions. Products formerly managed by...
Intel, the world’s biggest computer-chip maker, said it is reorganizing into five business units from two in an effort to speed new product introductions.
Products formerly managed by two divisions will be spread across the new units: mobility, digital enterprise, digital home, digital health and channel products, Intel spokesman Tom Beermann said yesterday.
The shuffle indicates President Paul Otellini, who will become chief executive in May, plans to drive into new markets such as wireless devices and consumer electronics, said Eric Ross, an analyst at ThinkEquity Partners. Intel is trying to boost revenue growth after delays and cancellations of new chips last year.
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“The focus on marketing and branding is going to be the Otellini legacy,” said New York-based Ross, who rates the shares “accumulate” and said he doesn’t own them.
“Intel’s been fantastically unsuccessful in breaking into new markets. They’re putting labels on things they hope will be big drivers in the future,” Ross said.
Otellini hopes to replicate the success of Intel’s Centrino chips used in notebook computers by emphasizing features such as battery life and sharper graphics through more aggressive advertising and selling, Ross said.
Intel shares have fallen 30 percent in the past 12 months amid concern over product delays. U.S. markets were closed yesterday in observance of the Rev. Dr. Martin Luther King Jr. holiday.
The reorganization is the biggest since Intel in December 2003 shrank the number of business units to two from three, folding the division focused on memory chips and processors for wireless devices such as mobile phones into the money-losing communications division run by Sean Maloney.
Maloney, 48, now will have responsibility for the Centrino chips used in notebook computers. He will lead the unit with Dadi Perlmutter, 51.
The success of Centrino helped the Santa Clara, Calif., company post record revenue last year as sales of laptops surged 26 percent during the holiday-shopping season. Intel has sold more than $5 billion worth of Centrino chips since March 2003.
Anand Chandrasekher, 41, head of the mobile unit, will take over all sales and marketing along with Eric Kim, 51, who joined Intel from Samsung Electronics in September. Jason Chen, Intel’s vice president of sales and marketing, will leave the company to attend to a family health matter, Intel said.
The combination of the computing and communications product groups is an effort to boost revenue from new markets and hasten delivery of chips.
Pat Gelsinger, 43, chief technology officer, will run the enterprise group that includes Intel’s desktop microprocessor and computer-server chip business, with Abhi Talwalkar, 40.
Intel’s products had been divided between the Intel Architecture Group and the Intel Communications Group.
The communications business has yet to turn a profit, and the operating loss in the business widened in the most recent quarter to $196 million from $143 million a year earlier.
Intel delayed or canceled at least five products, including the new version of its Pentium microprocessor, in 2004 amid design and engineering problems.
Otellini shifted engineers toward an approach that puts multiple processors on a single piece of silicon, avoiding technical issues such as excessive heat that had led in part to the delays.
Otellini, 54, will take over from Craig Barrett, 65, who will remain chairman after reaching Intel’s mandatory retirement age for chief executives.