Intel CEO: Upgrade or Get Left Behind

By Michael Singer

May 15, 2003

Things are going to need to be replaced anyway, but Craig Barrett hopes to prime the IT spending pump now with a warning and a promise of Prescott and Dothan.

Intel CEO Craig Barrett Thursday predicted bad things will happen to those companies that don't begin to upgrade their old equipment in the near term.

"The thing we are really waiting for is an enterprise commitment to upgrade," Barrett said in a briefing before its analyst conference in New York. "The U.S., Western Europe and Japan have to invest and upgrade or they are going to see a somewhat devastating jobless recovery."

Reiterating comments made this week by IBM CEO Sam Palmisano, Barrett said short-term recovery was still uncertain. But the Santa Clara, Calif.-based chip making giant says many companies are working with office computers and servers that haven't been replaced for at least four years.

"IT is the only vehicle on which established economies will be able to compete," Barrett said.

Stats released this week from research firm Gartner seem to back up the statement. The Stamford, Conn.-based firm is predicting PC shipments alone will decline 9 percent from the first quarter of 2003, but will be up 6.4 percent from the year-ago quarter. The group is also forecasting an 8.3 percent sequential decline in revenue, with the industry pulling in $38.3 billion on worldwide shipments of 30.7 million.

To help prime the pump, Intel told analysts that it will continue to focus on chips and now software in the Mobility, Digital Home and Enterprise sectors. And despite the 4 to 6 percent recovery expected this year, Intel said it still has many opportunities to grow as devices converge.

"There are opportunities in the digital home and the digital office and there will be lots of opportunities in the PC industry as well as the enterprise," said Barrett. "The handhelds, desktops, laptops getting connected over the same networks accessing the same information."

What's Ahead
Even Intel said it knows that to induce change it had to change itself.

To that end, Intel said it would release its next-generation Pentium 4 mobile processor code-named "Prescott" later this year. The 90-nanometer process chip is expected to include Hyper-Threading, LaGrande security technology and could possibly hit the 5GHz mark.

The next generation wireless Centrino chipset -- Dothan is now scheduled for release in the second half of 2003. The 90-nanometer process chip is expected to have double the cache and higher GHz than the original. Intel said the new processor set will allow for backlight image adaptation.

Intel is also working on a combination of 802.11 a/b silicon as well as a 802.11 b/g combination in the 4th quarter of this year. The company said it will be releasing a tri-band processor sometime next year.

Intel COO Paul Otellini also pointed to opportunities in the new emerging the "white-book market."

Similar to the white box movement of the 80s and 90s, Otellini said ODMs want to participate and the channel-ready ones are looking to Intel to participate in this segment.

In related news, Intel's said Thursday that it is investing in its first Russian-based company.

The chipmaker's Capital division said it would supply Moscow-based ru-Net Holdings with an undisclosed amount of capital. Ru-Net owns a Russian language Web portal, a software outsourcing firm and a systems integration company called TopS Business Integrator.

Originally published on .

Comment and Contribute
(Maximum characters: 1200). You have
characters left.