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These days, notebooks are hotter than desktops. But Intel has a plan to keep businesses interested in the bigger boxes.
The chip maker, whose executives briefed financial analysts on Thursday afternoon, aims to improve its desktop and server platforms for businesses—and its financials to boot—by rolling out technologies ranging from dual-core processors and virtualization to baked-in systems management technology.
Intel reorganized itself into five product-oriented business groups in January, allowing it to target new areas such as the digital home and health care as well as emerging markets.
But the new focus will help the company create desktops and servers that are more compelling for businesses, the executives said, therefore opening up the potential to gain greater shares of the more mature markets.
Intels Digital Enterprise Group is in charge of developing platforms for desktops and servers, while notebooks and cellular phones fall to its Mobile Group.
Thanks to Intels new strategy, Paul Otellini, its president and soon to be its CEO, predicts that the chip maker will continue to grow by double digits this year, using its multicore processors and things such as virtualization technology as jumping off points to build new product platforms. If Intel achieves the double-digit mark this year, it would mark the third consecutive year it has done so.
“For us to be successful, we need to invest and deliver products that can grow the market … grow our average selling price and grow our share of wallet of that particular computer,” Otellini said.
Intels first major platform effort was Centrino, the bundle that paired its Pentium M processor with a chip set and wireless module. Centrino proved fruitful in that it increased Intels share of wallet—or the amount of money it gets when manufacturers purchase the parts they need to build a notebook—in that market, Otellini said.
Thus, its become “the template for what we want to do in the other platform areas. You can see the future of computing if you just look at our org chart,” he said.
Next Page: The digital office platform.
Digital Office Platform
Next up is the Digital Office platform, due later this quarter, which promises greater performance and security for desktops, said Abhijit Talwalkar, general manager of Intels Digital Enterprise Group.
“Picture yourself doing instant message with video capabilities, voice capabilities and data,” Talwalkar said. “Thats going to drive significant levels of productively for organizations.”
Those features will require Intel to deliver better graphics and audio as well as higher performance processors, he said. But the company is also working on some secret sauce. Virtualization technology, for one, will allow PCs to be partitioned to run different software. For businesses, it would allow a companys software image to be separated on its own partition to help protect it.
Intel is also working on so-called active management technology—including building a management software engine, which works independently of an operating system—into its products to assist businesses IT managers. Software makers have begun working with the engine to create applications ranging from asset tracking to virus protection, the company said.
Dual-core chips also will play a major role in Intels platforms. The company, which began shipping its first dual-core chip, the Pentium Extreme Edition 840, in April, has about 15 other similar projects in the works. Its next dual-core chip, the Pentium D for so-called mainstream desktops, comes out next month, Otellini said.
Talwalkar demonstrated Intels Bensly server platform, based around a chip set that can support two dual-core Xeon chips. Intel will seed thousands of dual-core servers into the market in the second half of 2005, Talwalkar said.
While its getting its first round of dual-core chips out the door now, Intel is already developing follow-ons. Conroe, a dual-core desktop chip; the dual-core notebook chip Merom; and Woodcrest, a dual-core Xeon DP chip, all will enter the picture in the late 2006 timeframe, Otellini said.
Conroe, for example, follows Presler, the next dual-core desktop chip, which is due in early 2006. During 2007, Intel will make a nearly full transition to dual-core processors, the executive predicted.
Finally, Intel will push ahead with new ideas for notebooks. Aside from creating new Centrino bundles around a dual-core chip dubbed Yonah, it has a plan to foster better interaction between notebooks and cellular phones.
“Well be looking, during the course of 2006, to get the phone and the notebook aware of each others presence,” said Sean Maloney, executive vice president and general manager of the companys Mobility Group.
The multiyear program will involve allowing phones and notebooks to share files with contact information or pictures, as well as allowing phones to help notebooks connect to corporate networks to download e-mail.
“I think 2005 is going to look seasonal. Thats kind of the guidance weve been giving all year,” Otellini said, summing up the meeting during an ensuing question-and-answer session. “I dont think people wait for technology. The emerging markets, being the growth drivers, are not waiting for anything.”