Intel CEO Vows to Bring New 'Pragmatism'

SANTA CLARA, Calif.--Intel Corp.'s new chief executive disclosed a series of strategy shifts to accelerate the company's long-sluggish move into mobile devices and other new markets.

Brian Krzanich, who took the top job at the big chip maker last May, told analysts that more "pragmatic" moves would bring benefits that include taking Intel processors into tablets at price points below $100.

Other new pushes include enabling hardware vendors to make personal computers in 2014 that could use multiple operating systems. PC makers would have a choice of either Google Inc.'s Android or Chrome operating systems as well as Windows software from Microsoft Corp., Intel's longtime PC partner.

Intel will also allow any company that wants to use the company's manufacturing service to do so, Mr. Krzanich said. His predecessor, Paul Otellini, had previously shied away from allowing its advanced manufacturing technology to be used by direct Intel competitors.

"We will open the foundry to any company able to utilize our leading-edge silicon," Mr. Krzanich said.

Intel, whose x86 chip design is the standard in PCs, has been passed over by many makers of mobile devices in favor of companies that license chip designs from ARM Holdings PLC. Mr. Krzanich said Intel will continue to stick to the x86 design for chips it develops internally, but resistance to making products with ARM technology for other companies in its factories has eased. It has agreed, for example, to build new chips for Altera Corp. that include ARM technology.

Mr. Krzanich, as well as Intel Chairman Andy Bryant, kicked off its analyst meeting here by blaming the lagging penetration of smartphones and tablets on an unrealistic mindset by management in the past about what hardware makers want.

Mr. Bryant said he was "personally embarrassed" by the results. "We were in denial on tablets," he said. "It put us in a hole and we are paying the price for that right now."

That position in tablets should improve dramatically in 2014, as the company delivers chips for products which are less expensive and offer greater performance and longer battery life, Mr. Krzanich said. He predicted that shipments of chips for tablets would quadruple next year, to 40 million units.

Intel has also fallen behind rivals like Qualcomm Inc. in delivering wireless chips for smartphones. In one unusual move to boost its position, Mr. Krzanich disclosed that his company will take an existing chip from an Intel unit formerly part of Infineon, which previously came along with an ARM processor, and simply replace that with Intel technology.

In addition, that chip--dubbed SoFIA--will continue to be produced by another manufacturing service, Mr. Krzanich said. Intel has rarely allowed x86-based chips to be built outside its own factories. That chip is expected in the second half of 2014.

Mr. Krzanich said the company would try to focus on winning sales from the biggest suppliers in smartphones, rather than trying to cover the entire market. "You will see our focus narrowed down on these key suppliers," he said.

While trying to penetrate new markets, Mr. Krzanich said he believes the PC-market slump is easing, driven in particular by sales to business customers. Lower pricing should help; Mr. Krzanich said he said convertible devices--which can work as a tablet or in clamshell mode--should hit the market as low as $299 soon.

In promoting the concept of mobile computers with two operating systems, Mr. Krzanich said the strategy would enable PC makers to ship PCs into sales channels without loading the software until right before it is purchases. That gives manufacturers a "cost reduction no one else can provide," he said.

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