(Corrects spelling of surname to Otellini from Ottelini; the
error also occurred in updates 1 and 2)
* Otellini has been CEO since 2005
* Intel says CEO search could take six months
* Chipmaker promotes three executives
* Intel's dominant position has slipped as PC sales dwindle
By Noel Randewich and Liana B. Baker
SAN FRANCISCO/NEW YORK, Nov 19 Intel Corp
said on Monday that Chief Executive Officer Paul
Otellini will retire in May as the world's leading chipmaker
grapples with weak PC demand and an industry shift toward mobile
Intel's board said it would consider internal and external
candidates for the CEO position and it expected the "leadership
transition" to last six months.
Intel, whose processors are dominant in personal computers,
has been slow to expand into the fast-growing mobile industry
where Apple's iPads and iPhones, and other popular mobile
devices, are made using competing technology from Britain's ARM
"We all know that everyone is using smartphones and tablets
now. It's the era of Intel versus ARM, so it may be good to come
in with some fresh blood and a new perspective," Evercore
analyst Patrick Wang said.
The company said it would promote three executives to
executive vice presidents. They are Renee James, who is in
charge of Intel software; Brian Krzanich, who is chief operating
officer and oversees manufacturing; and Stacy Smith, the chief
financial officer and director of corporate strategy.
Smith, well-known by Wall Street, and Krzanich have in the
past been viewed as potential future CEOs.
"There a comfort level with Stacy (Smith)," said Williams
Financial analyst Cody Acree. "I think we'd get more continuity
with the current roadmap and direction than you would with
Krzanich, a three-decade Intel veteran, made a name for
himself improving the efficiency of the chipmaker's cutting-edge
factories. He was promoted to Chief Operating Officer last
March, effectively throwing him in the running for the CEO
Analysts said James' focus on software instead of hardware
made her less likely to be promoted to CEO.
END OF AN ERA
Since it was founded in 1968, Intel has had a history of
promoting CEOs from within. But the increasing belief that the
"PC era", which Intel helped create, may be drawing to a close,
could lead Intel's board to choose an external candidate with
experience in mobile, analysts said.
"Previous CEO transitions have all involved carefully
groomed internal candidates, but if Intel's Board is now looking
externally -- to bring in new skills -- that would explain the
lack of a named successor and length of time in transition,"
said Longbow Research analyst JoAnne Feeney.
Otellini, 62, was the company's fifth CEO, stepping into the
post in the second quarter of 2005. The company has an internal
rule of retiring its CEOs at age 65.
He worked at Intel for nearly 40 years -- most of its
The Santa Clara, California company has long been accustomed
to being king of the PC market, particularly through its
historic "Wintel" alliance with Microsoft Corp, which
led to breathtakingly high profit margins and an 80 percent
But it has struggled to adapt its powerful PC processors to
be used in smartphones and tablets that depend on batteries. Its
market share is less than 1 percent of smartphones, trailing
Qualcomm Inc, Samsung Electronics Co Ltd,
ARM Holdings Plc and others.
That leads some investors, who are already concerned about a
lackluster global economy, to ask if Intel's invincibility has
come to an end and whether the company's potential for profit
and revenue growth may be limited.
Intel's shares gained 0.5 percent to $20.28 in Nasdaq
(Reporting by Noel Randewich in San Francisco, Liana B. Baker
in New York; Editing by Lisa Von Ahn, Maureen Bavdek and Kenneth