Intel’s Extensive Makeover

While Apple talked about a couple of new products on Tuesday, Intel, with much less fanfare, talked about the transformation of a world, and itself.

Wisely, it did not guarantee the success of its own changes, but showed the steps it is taking.

“We got mired down in the here and now, with this fixation on phones and devices,” Renee James, Intel’s president, said in an exclusive interview at the annual Intel Developers Forum. “We needed to step back and say there is a broader transformation going on.”

The changes include not just products, she said, but a transformation of Intel itself, from a client-server era company to a cloud era company. It is a work in progress, she said, that has involved consultation with Google, Facebook and other cloud companies about how they work. Everything, including how employees design products and compensation, is being rethought, she said.

“This is bigger than any device,” Ms. James said. “It’s a cultural transformation. We’re trying to be thoughtful about it.”

Intel’s chief product announcement to the developers was a new small, low power line of sophisticated chips aimed at wearable computers and sensors connected to the Internet. In other words, a product for a world where Internet-based computing intelligence is deployed anywhere and everywhere. Intel is hoping it can equip this world with chips at a huge scale, remaking a market usually associated with low-priced, low-margin chips.

Called Quark, the new line of chips is initially aimed at the low-priced end of AMD’s “system on a chip” business. Intel did not provide many specifics about price and functionality, other than to say that it will be one-fifth the size and use one-tenth the power of a low-power mobile processor, code-named Silvermont, which will come out at the end of this year.

Silvermont was planned long before last April, when Brian Krzanich took over as Intel’s chief executive and Ms. James became its president. It is part of the Atom line of chips, intended for tablets and lightweight laptops. As such, it is part of that “fixation” on Intel’s historical reliance on personal computers that Ms. James mentioned.

Quark was a product line that Intel’s researchers had in prototype when she became president, Ms. James said, but because these chips are usually associated with cheap microcontrollers, “we hadn’t decided what to do with it. You could look at the business and say ‘Why do we want to be in this?’” Given the growing reach of the Internet, she said, the question became “Why do we not?’”

Quark chips will become available in significant volumes in the first quarter of 2014, Intel said. That’s when the real performance specifications will be known, and when it can start to move out into the field. What it grows into, and what it means for Intel, is what matters most.

The change was even reflected in the form of the conference: Intel is used to showing developers new chips for personal computers and computer servers, which have fairly straightforward deployments in well-understood machines. Quark is a product for a world in which fitness companies, shoe makers, hackers â€" basically, anyone â€" can become an outlet for Intel products

At Tuesday’s forum, Intel deployed more of its engineers than ever so it could talk directly with more individuals. Mr. Krzanich and Ms. James talked in turn about products, and about the hyperconnected world. The two spent 30 minutes taking questions from the audience, a first at this event.

To be sure, the old world still mattered. Mr. Krzanich showed Intel chips in phones, tablets, and laptops that doubled as tablets. The combination products would be available in 60 styles by the end of this year, he said, at prices as low as $400, adding that some Intel-powered tablets would be $100.

Ms. James talked about cities with millions of sensors monitoring every imaginable condition, and cheap genomic analysis of millions of people. Both argued that Intel’s strong design and manufacturing would give it an edge in this world to come.

In some ways, that is the same argument Intel has made for the past couple of years, even as it fixated, and lost money, on trying to preserve its PC-centered business.

Speaking after the event, though, Ms. James said there was no turning back. On Wednesday Intel is expected to make joint announcements with Google that will show a new ability to move away from its old PC model, which was dominated by a relationship with Microsoft, toward addressing a much broader world.

“Intel is redefining what its role is,” she said. “We have a new relationship with Google. There are hobbyists and hackers we’re talking to. We go to maker faires and talk with developers there.”

What remains to be seen is whether Intel can sustain the kind of profit margins it had when it worked in a duopoly with Microsoft.