This month marks a milestone for chip juggernaut Intel (INTC +2.35%). 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 currently has five operating segments: PC client group, data center group, other Intel architecture, software and services, and all other.
|
Segment |
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'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 (GOOG 1.00%) Glass. The high-tech spectacles strangely use a Texas Instruments OMAP processor, even after TI famously ditched mobile last year.
Still, Google has expressed openness toward using Intel'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 is relatively agnostic and just wants to broaden its reach by whatever means necessary.
Apple (AAPL 1.68%) is also expected to get into wearable devices soon with an iWatch. Rumors surfaced late last year that Intel and Apple were collaborating on a smart watch. The odd part about that rumor is that Apple has also allegedly explored moving Macs away from Intel chips in favor of its own designs. An Intel-powered iWatch is a possibility, even if a remote one.
Will Krzanich's mark on Intel be broadening the company's horizons to new product categories?
