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Saturday, June 29, 2013

After Fighting Mobile Trend, Intel Now Embraces It

Intel, which became a global behemoth by making the chips that drive most of the world’s desktop computers and laptops, missed the mobile revolution. In tablets and smartphones, the company is a bit player.

That’s hardly news to anyone who follows technology. But it was still a bit of shock to hear the company’s new chief executive, Brian Krzanich, acknowledge that the company actively fought what everyone else could see was an inevitable shift toward smaller, more portable computing devices.

“We stopped and we held off and we tried to keep everything” frozen at personal computers, he said Friday during a meeting with a small group of reporters in San Francisco. Mr. Krzanich was certainly in a position to know, since he has spent his entire career at Intel and was the company’s chief operating officer fro 2002 until he was given the top job in May.

The PCs-forever attitude was so pervasive that the people working on the company’s mobile-chip line, the Atom, were essentially second-class citizens, without access to Intel’s latest production technologies and the resources lavished on the Core line of PC chips and the Xeon line of server chips.

Now Intel is not just trying to catch up in mobile but also trying to leapfrog the competition. As Mr. Krzanich put it, Intel’s strategy is: “Embrace this and embrace it fast and actually move quicker and try and go ahead of this.”

Transforming Intel into a mobile leader won’t be easy. The company will continue to get the vast bulk of its revenue, which topped $53 billion last year, from PCs and servers. The mobile arena is dominated by other giant companies like Qualcomm and Samsung, which are constantly improving their own chips to make them do more while using less battery power.

But Mr. Krzanich and his No. 2, Renée James, who also ascended to her post in May, said that the Atom chip had now been elevated to the same level of importance as the other lines among the company’s priorities.

One advantage that Intel has, according to Ms. James, is the cross-platform and backward compatibility of its designs. Its x86 standard, which dates back decades in one form or another, allows businesses in particular to use the same software across generations of machines and different kinds of devices.

“We believe compatibility is a value proposition that no one else on the planet can offer,” she said.

Leveraging that notion, Intel is angling to persuade big PC makers like Lenovo, which already uses Intel chips in its computers, to use Atom cips as they move more aggressively into the mobile phone market.

Wearable computers, two-in-one tablet and laptop combinations, and the next generation of smartphone designs could also offer opportunities.

“Whatever is the leading technology today probably won’t be tomorrow. So it gives us the chance to insert ourselves,” Mr. Krzanich said.

One area in which Intel is trying to insert itself â€" Internet-based television service â€" is still rough going. Intel’s plan to offer streaming television shows through its own media box has run into opposition from established cable TV players.

“From a technical standpoint, we’ve built a game-changing device,” Mr. Krzanich said.

But the company is still evaluating the business model. Unlike Apple or Comcast or Time Warner, it has little experience in negotiating contracts for entertainment content. “We’re being cautious,” he said.

Like many in Silicon Valley, Mr. Krzanich believes that wearable computers will be the next big wave of computing. He said that in addition to chips for such devices, Intel is also working on a service that could connect all kinds of wearables.

Lately, Mr. Krzanich has been playing around with Google Glass, the Internet-connected eyeglasses being tested by the search giant. But he isn’t sure that glasses are the best form factor for computing

“I love the Google Glass,” he said. “But there are times when I just want the earpiece talking to me.”

Intelligent earbuds? Now that’s the kind of innovation that would distinguish Intel from the rest of the pack.