Intel’s Selection of New CEO Sticks to Familiar Formula

Posted by on May 4th, 2013

Intel selected Brian Krzanich as its next CEO. It indicated that the technology giant is sticking to a familiar formula despite the changing shift in computing that has caused some worries about the future of the company. Intel

Ever since Intel co-founders Robert Noyce and Gordon Moore relinquished their positions as the first two CEOS, the company promoted the second in-command to take the position. It started in 1987 with Andy Grove, who served as top lieutenant under Noyce and Moore.

Then Craig Barrett became CEO in 1998 after he learned the ropes under Grove. He then conceded the position to his second in command, Paul Otellini, in 2005. Krzanich is currently the company’s chief operating officer. He will be the sixth CEO, who will start in two weeks.

The formula has worked welled in the computing market that has been dominated by laptop and desktop machines that ran on Intel’s chips and Microsoft’s Windows operating system. But at present, Intel has been facing a threat from tablet computers and smartphones that demand lower energy processors. This is a field that Intel was late to master.

PC sales have been on decline as consumers and businesses shift towards mobile computers. Most of these mobile devices don’t utilize Intel’s chips. Microsoft developed a lightweight version of Windows OS that isn’t compatible with Intel’s processors. This led to a 15 percent drop in the company’s profit in 2012.

Intel has been working hard to develop power-sipping chips that are suited for mobile devices. But even if it manages to come up with a successful product, the company’s profit margin could contract. This is because mobile chips are priced cheaper than regular PC chips.

Analysts believe that Otellini decided to retire early because of the challenges the company is facing. The board expected him to remain the CEO if Intel until 2015, when he turns 65.