Intel CEO Steps Down

on Nov 21, 2012

Paul Otellini, the Chief Executive Officer of microchip manufacturer Intel announced on Monday his plans to retire from the company in May 2013, The Times reported. The departure of Otellini, who has served as Intel’s CEO for the past 8 years comes as a surprise to the industry and represents yet another problem for the company which has been struggling to retain its dominant position in a shifting market.

**An early retirement**
According to The Times Otellini’s retirement comes earlier than expected, as it was believed that Intel’s boss, currently 62, would remain with the company until his 65th birthday. Otllini’s decision caught the microchip manufacturer unprepared to appoint a successor. The hardware giant admitted that it would need six months to evaluate internal and external candidates for the position.

Mr. Otellini’s statement on the subject says: “After almost four decades with the company and eight years as CEO, it’s time to move on and transfer Intel’s helm to a new generation of leadership.”
**Is Wintel collapsing?**
News of Ottelini’ departure comes as the microchip manufacturer shows signs of starting to lose its grip on the computing market. The strategic alliance between Microsoft (NASDAQ:MSFT) and Intel (NASDAQ:INTC), dubbed ‘Wintel’, has dominated the market for decades, but the rise of mobile devices has drastically changed the status quo. The situation is particularly difficult for Intel, which has been struggling to adapt to the changing landscape. The company holds less than a 1% share of the mobile computing market, far behind ARM Holdings (LON:ARM), currently the biggest player in this space.

!m[Paul Otellini Will Leave The Company Next May After 40 Years Of Service](/uploads/story/863/thumbs/pic1_inline.png)The British company has been often ridiculed for manufacturing low-energy chips in an era when the race for computing power between Intel and AMD was the main focus. But this has proven to be a strength in the market for mobile devices, allowing the British manufacturer to become the dominant force in the sector.

Meanwhile, Microsoft, the Redmond-based software behemoth, has made efforts to respond to the shifting market by releasing its own Windows 8 based smartphone and tablet. The tablet, the Surface, has been perceived by some industry analysts as a slap to the company’s OEMs (original equipment manufacturers), including Intel. The Surface comes in two models, Surface RT and Surface Pro, with the former using a processor from Intel’s main competitor. It has to be noted, however that the more powerful Pro version (which aims to breach the gap between tablets and conventional laptops) still uses an x86 architecture chip supplied by Intel.

**Possible successors**
Intel has plenty of problems to cope with at the moment, and Otellini’s departure creates a less than welcome addition to that list. No candidates have been announced yet, but the company, which has a tendency of promoting it chief executives from within, gave some indication of who might be in the running, promoting on Monday Renee James, the head of Intel’s software division, Brian Krzanich, the chief operating officer, and Stacy Smith, the chief financial officer, the Times Reported.
The new CEO will have the difficult task of making Intel’s transition to the shifting market as smooth as possible, overcoming the setbacks that the hardware giant is currently experiencing. Intel reported a 14 percent drop in profits to $3 billion in Q3 and its production facilities are operating at less than 50 per cent capacity.
Intel shares rose 5 cents to $20.25 in New York on Monday.