| SANTA CLARA, California
SANTA CLARA, California May 10 Intel Chief
Executive Paul Otellini showcased the top chipmaker's
long-awaited push into smartphones and talked up ultrathin
laptops he hopes will spice up a category that seems
increasingly dull compared to tablets and other mobile devices.
With worldwide PC sales barely growing, Intel Corp
has been racing to find a foothold in smartphone and tablet
markets, where processors based on ARM Holdings Pls's
power-efficient chip designs are widely used.
Last month in India, Lava International launched the first
smartphone using Intel's new Medfield processor and the device
has received respectable reviews from benchmark testers.
Intel has also announced the Medfield chips would be used in
upcoming phones from Motorola Mobility Holdings Inc,
Lenovo Group Ltd ZTE and Orange.
"We're getting awfully good reviews for our first phones,"
Otellini told investors at an annual Intel event. "We have
ambitions; you'll see more announcements over time and very cool
capabilities built into phones."
Many investors are waiting to see how successful the new
handsets become with consumers before declaring that the
chipmaker is a serious player in the mobile market. But growing
expectations that Intel will be able to compete have fueled
gains in its shares in recent months.
Intel is also heavily promoting a PC category it has dubbed
ultrabooks, similar to Apple Inc's Macbook Air and
offering some of the technological chic the iPad and other
Some investors are concerned that the expensive components
used in them, such as solid-state drives, make them too pricey
for many consumers. They worry Intel may sacrifice profit
margins on sales of its processors to help make ultrabooks
Otellini said sales were on track and would pick up in the
second half of 2012 as more manufacturers start using Intel's
new Ivy Bridge processor.
"We're on track to meet our goal of 40 percent of consumer
notebooks this holiday season being ultrabooks," Otellini said.
Last month, Intel posted quarterly earnings that failed to
inspire gains in its recently high-flying stock and also said
costs associated with ramping up new production lines for the
Ivy Bridge chips would hurt gross margins more than expected.
Otellini said manufacturers are working on 20 tablets using
Intel processors and Microsoft's long-awaited Windows 8
platform, expected later this year.
He also forecast that Intel, with its deep pockets, would
become one of an increasingly smaller group of leading-edge chip
manufacturers as the sector moves toward larger and costlier
With the industry preparing to increase the size of the
silicon wafers it uses, letting manufacturers fit more chips on
each, future leading-edge factories will cost over $10 billion
each to build, compared with about $5 billion now, Otellini