New CEO Brian Krzanich could boost Intel's hopes in tablet market

How the two new executive announcements could help Intel improve its standing in the highly competitive tablet market.

Intel just announced that insider Brian M. Krzanich will be its next CEO, on the heels of yesterday’s IDC report showing a 142.4% year-over-year growth rate for the tablet market, in which Intel does not have a significant share.

Last month, Gartner announced that world-wide PC shipments had not only stalled, but had declined 11% from prior years to 79 million. At this rate, tablet shipments could surpass PC shipments in less than a year.

Also promoted to president was Renee J. James. James, who formerly ran the software group.

Intel has had a reputation of poorly managing promising emerging businesses. When shipments and revenues were growing well but were not comparable to the microprocessor business’ enormous scale, small internal ventures often suffered.

RELATED: Intels' mobile transition struggles are Microsoft's advantage

The 'i' is for Intel in Motorola Razr i

Picking these two insiders tells much about how Intel will solve the problems it faces after missing the mobile revolution. Intel’s chip shipments to manufacturers of data center equipment are healthy and projected to grow with the economic rebound. Intel has also reached an agreement with Altera to build its FPGAs, and Intel’s Eric Huggers spoke of an over-the-top (OTT) television service it plans to rollout at the All Things D Conference. But the revenues from the Altera partnership and television technology won’t appear until 2014 or later. Right now, Intel has to produce results with what it has in its funnel.

Looking at the IDC shipment statistics, Windows 8 tablets represented less than 4% of the market. Intel’s return to growth will depend on shipping the Atom Processor Z2760 to Android tablet OEMs to meet any shortfall in demand for Windows 8 tablets and Ultrabooks. Although the Windows 8 tablet market is growing, it’s coming from a very small base. To have a meaningful impact for Intel, the Windows 8 tablet market must grow substantially, or Intel will need to substitute some of the enormous growth in the Android tablet market for any shortcomings in Windows 8 growth.

The Intel Z2760 has already been implemented in Windows 8 tablets by long-time partners Acer, ASUS, Dell, Fujitsu, HP, Lenovo, LG and Samsung. Intel could also bring Andoid tablet functionality to these OEMs.

Intel has already made the Atom mobile processor compatible with Android. The Motorola Razor i announced last September runs Android flawlessly on an Intel Atom Z2460 with good battery life.

Krzanich is an operationally oriented semiconductor engineer and manager. If Intel is to move into mobile, the nascent mobile business needs to be protected and the best talent and most valuable manufacturing assets need to be dedicated to produce a high volume of mobile processors that can compete with Qualcomm. It would be difficult for an outsider, and even more difficult for an industry insider, to lead this transition.

James, as head of the software business, has successfully improved the compatibility and performance of Intel’s microprocessors running software ranging from Google’s Android to Oracle’s database. Intel’s top two managers can make the case to their OEM customers that Intel can expand Atom’s tablet market share because of its relevant experience with software, semiconductor engineering and manufacturing.

Microsoft is left in a quandary, having to continue to develop its Qualcomm tablet version Windows RT to have a product that fits the moderate to low-cost tablet price point until the lower-cost Atom chips become available from Intel. The RT incompatibility with the Intel instruction set negates Windows’s most significant advantage over Android and iOS - its compatibility with other versions of Windows. So every application needs to be recompiled to run on RT tablets.

To comment on this article and other Network World content, visit our Facebook page or our Twitter stream.
Related:
Must read: Hidden Cause of Slow Internet and how to fix it
Notice to our Readers
We're now using social media to take your comments and feedback. Learn more about this here.