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Essay on Intel Strategy
Barrett is planning a last hurrah that may have some questioning his sanity all over again. At a time when some execs would be eyeing their pensions, Intel's chief is launching the most ambitious move beyond computers in the company's 35-year history. Forget Intel Inside. Think Intel Everywhere. Under Barrett's plan, Intel's powerful lineup of chips would be the guts of nearly every type of digital device on the planet, cell phones, flat-panel TVs, portable video players, wireless home networking and even medical diagnostic gear. All told, the company is targeting 10 new product areas for its chips, primarily in the consumer-electronics and communications markets.
Management missteps caused five projects to be scrapped or delayed this year, including plans for a new Pentium processor. Intel overestimated demand and now holds a record inventory that reduced third-quarter profit growth to the slowest pace in five quarters. Intel's shares have dropped 34 percent this year, the second-biggest loss in the Dow Jones Industrial Average. Barrett said he told managers to each submit a list of five things they're doing to fix the Santa Clara, Calif.-based company's problems. At stake is Barrett's push to expand Intel beyond making chips that power personal computers, a market the company has dominated for more than 20 years.
Barrett is convinced now is the time to strike deep into new territory. Communications, content, and consumer electronics, after years of false starts, are rapidly evolving from the old analog world to one of standardized digital products, the realm of Intel's power. Gung-ho consumers, surging broadband adoption, and rapid declines in the costs of hard drives, chips, and other key technologies are driving much of the world to digital content. Once photos, music, and video take digital form, they become the bits that Intel's chips can process, store, and zap across the Web. "Everything in the world is going digital," Barrett says....
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