Intel CEO Paul Otellini is getting ready to leave the company, and analysts say this could be a good change for the world's largest chip maker.
Intel announced on Monday that Otellini, 62, will retire in May after nearly four decades with the company. The company's board of directors will conduct a search for his replacement.
Intel CEO Paul Otellini gives a keynote address during the Consumer Electronics Show in Las Vegas in January 2012. (Photo: Steve Marcus / Reuters)
Whoever takes over as Intel's next CEO will face a daunting job. The company has been struggling to find its way into the burgeoning mobile market and faces tough competition from Arm Holdings, whose processors and technologies are widely used in mobile devices. The company has also been challenged by the depressed PC market.
While most industry analysts say Otellini is leaving the company of his own volition, Ken Dulaney, an analyst with Gartner, Inc., said other issues could have influenced his decision.
"Anytime this type of thing happens, it's a bit of a surprise, but he's been there a long time," Dulaney said. "And there are other factors that may be a 'slight' influence, such as the decline in PC shipments and the fact that Intel has missed the growth in mobility in categories such as smartphones."
However, Dulaney noted, Intel is a very strong company with top-of-class manufacturing and a particularly strong server business. With that strong base, new leadership could be a welcome change, he said.
Dan Olds, an analyst with The Gabriel Consulting Group, said he's waiting to see who's on Intel's short list for the CEO position before commenting on Otellini's departure.
"I don't think it's necessarily bad, or good, news," he said. "It definitely means change, and some uncertainty, which is disruptive, but, Intel is fighting on a number of fronts and could probably use the shot in the arm that a new leader can bring."
With about six months to prepare for the big leadership transition, Intel is in a good position, according to Charles King, an analyst with Pund-IT, Inc.
"Today's announcement begins an orderly preparation for his departure, with the Intel board having plenty of time to search, vet and choose a replacement," he added. "This is diametrically opposite from instances where CEOs are shown the door without warning or even a prospective replacement standing by."
It also means the company's board should have time to find a new leader who has a firm grasp of mobile technologies and the expanding mobile market.
However, a new leader, whether well-versed in mobile or not, may not change the company, or its future direction, all that much, said Patrick Moorhead, an analyst with Moor Insights & Strategy.
Intel is such a strong company with a new mobile strategy that the departure of one CEO and the entrance of another shouldn't alter its course much, Moorhead said.
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