After eight years at the helm, Paul S. Otellini recently announced that he is leaving the world’s largest chip maker Intel in May 2013. During his tenure, Intel increased its revenue by 56 percent and operating profits surged by 46 percent. But moving forward, Intel may face tough challenges.
The worldwide sales of PCs are slowing down and sales of smartphones and tablets are increasing at an alarming rate. Unfortunately Intel chips are not in the growing smartphones and tablets. Apple produces half the world’s tablets and uses its own chips. Google’s Nexus 7 uses chips made by Nvidia and Amazon.com Kindle Fire uses chips made by Texas Instruments. In the smartphones market Intel chips are in few smaller overseas products. The world’s dominant chip maker for phones and tablets is ARM Holdings.
Intel chips in PCs cost over $100 compared to much smaller price of a smartphone and tablet chip. If PC market falters, it will be a huge blow to the Intel revenue. Critics are asking Intel to open its factories to other chips which Intel has brushed away. The main reason for declining the offer is Intel is not willing to share its X86 software that is used in its chip technology.