Intel CEO Otellini expects insider to replace him

SAN FRANCISCO Fri Dec 7, 2012 1:36am IST

Paul Otellini, president and CEO of Intel Corporation, holds an Intel smartphone reference design as he gives a keynote address during the 2012 International Consumer Electronics Show (CES) in Las Vegas, Nevada, January 10, 2012. REUTERS/Steve Marcus

Paul Otellini, president and CEO of Intel Corporation, holds an Intel smartphone reference design as he gives a keynote address during the 2012 International Consumer Electronics Show (CES) in Las Vegas, Nevada, January 10, 2012.

Credit: Reuters/Steve Marcus

Related Topics

Stocks

   

SAN FRANCISCO (Reuters) - Intel's (INTC.O) outgoing chief executive, Paul Otellini, said he expected to be replaced by a company insider and also signaled that the top chipmaker could open its factories to strategic customers.

Otellini's comments at a Sanford Bernstein investor conference on Wednesday stoked speculation the top chipmaker may manufacture mobile chips for Apple (AAPL.O) and pushed Intel's shares higher on Thursday morning.

"For the right types of products and not to enable my competitors, I would certainly consider it. There's a lot of stuff in the pipeline," Otellini said, according to a Thomson One transcript.

"As you know it takes a while to move your designs over, to design them under our process, for us to be able to bring them in-house and so forth and our foundry customers aren't going to announce that they've moved until they've moved because it would hurt them at their current suppliers, Otellini said.

RBC analyst Doug Freedman said Otellini's comments about the possibility of open Intel's plants to customers were more direct than previous ones.

Apple currently depends on Samsung Electronics (005930.KS) to manufacture its mobile chips but the two companies are in a war over patents and also compete in smarpthones and tablets. Apple is believed to be looking for alternative suppliers.

Intel raised eyebrows on Wall Street and in Silicon Valley in November when it said it will consider an outsider to take over after Otellini unexpectedly announced he will retire in May, potentially ending a four-decade tradition of internal succession.

Some analysts took that as a sign that Intel, which has struggled to jump from the personal computer market to mobile, might be considering a transformative hire. But Otellini he expects the board to choose from among the chipmaker's own executives.

"It's not up to me but I think that's the most likely outcome. I'm very comfortable with the internal candidates and the track record of internal versus external in our industry shows pretty clearly you want to stay inside if you can," Otellini said.

While the idea of an iconic visionary stepping in to lift Intel into the mobile market - its Achilles heel - may sound attractive, it could open the chipmaker to new risks should it waver from its traditional focus on hard-core manufacturing.

"Even if you brought in Mr. or Ms. Perfect, that person is going to take whatever it is, two years to figure out the culture and the people and how systems work and stuff like that," Otellini said.

"In this environment, why take the risk and take the time? So I think they will stay inside."

Shares of Intel rose 1.66 percent to $20.17. (Reporting By Noel Randewich; Editing by M.D. Golan)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

SONY PLAYSTATION 4

REUTERS SHOWCASE

Incorrigible Kim

Incorrigible Kim

Megaupload's Dotcom, facing legal threat, launches political party.  Full Article 

Cyber Crime

Cyber Crime

Canadian charged in 'Heartbleed' attack on tax agency.  Full Article 

Google Revenue

Google Revenue

Google Q1 revenue misses Wall Street targets.  Full Article 

High Demand

High Demand

Sony sells more than 7 million Playstation 4 consoles.  Full Article 

Mt Gox Update

Mt Gox Update

Mt Gox set to liquidate as court denies rehabilitation.  Full Article 

New Culture

New Culture

New CEO Nadella pushes data culture at Microsoft.  Full Article 

Upbeat on S5

Upbeat on S5

Samsung executive says Galaxy S5 to outsell S4, sees Q2 rollout for Tizen phone.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage