Intel CEO to step down
Intel chief executive officer Paul Otellini will retire in May, in a surprise move three years before mandatory retirement, after failing to equip the world's largest semiconductor maker for a shift toward mobile devices and away from the personal computers it long dominated.
The board will consider internal and external candidates to replace him, Intel said today in a statement. The company has never chosen an outside CEO.
Under Mr Otellini (62) Intel has stumbled in the transition to mobile computing, managing to garner less than 1 per cent of the market for chips for smartphones and tablets.
Though the company extended its lead over Advanced Micro Devices in PC chips, the industry is shrinking as people do more computing on iPads and Android phones. The PC market this year will post its first annual decline in more than a decade.
"He's been challenged by a tough PC market," Richard Schafer, an analyst at Oppenheimer and Co., said in an interview.
"You've got a company that's heavily dependent on PCs, which is a vertical that's in structural decline. Intel has yet to really establish a beachhead in mobile computing." When Mr Otellini began his tenure as CEO in 2005, desktop and laptop machines powered by Intel's chips set the standard for personal computing.
More recently, smartphones and tablets have eclipsed the number of PCs being sold, crimping Intel's revenue.
Under Intel bylaws, Mr Otellini could have continued to serve as CEO until May 2016, when he would have reached the company's mandatory retirement age.
Intel's shares rose less than 1 per cent to $20.25 at the close in New York, leaving the stock down 16 per cent this year.
"The board accepted Paul's decision with regret," Paul Bergevin, vice president of communications at the Santa Clara, California-based company, said in an interview.
The company today promoted three senior leaders to the position of executive vice president: Stacy Smith, chief financial officer and director of corporate strategy; Brian Krzanich, chief operating officer; and Renee James, head of Intel's software business. In past successions, Intel has elevated the current COO to the top job.
Both Mr Otellini and his predecessor, Craig Barrett, stepped up from that position. Mr Otellini, having served as technical assistant to former CEO Andy Grove, is also the product of Intel's internal development program to groom future leaders.