It took Intel’s (NASDAQ: INTC) board six months to arrive at a suitable replacement for retiring President and CEO Paul Otellini, but in the end, the chip maker opted for an insider, appointing Brian Krzanich, its current COO, to navigate what could be some rocky terrain ahead.
While the board’s lengthy deliberations lent some air of suspense to the proceedings, once Krzanich was upped to COO in January its ace card had been turned up—it was Otellini’s position when he was named to helm the company some eight years ago. Krzanich, a 31-year Intel veteran who joined the company right out of college at nearby San Jose State University, will assume the CEO post at the chip maker’s annual stockholders' meeting on May 16.
There was one noteworthy twist to Krzanich’s ascension when Intel elevated 25-year company veteran Renée James from software and service group executive vice president and general manager to president. James is credited with championing Intel’s $7.7 billion purchase of security vendor McAfee two years ago.
While Otellini held both chief executive and president titles, Krzanich and James are likely to operate in some fashion as a team running the company.
Intel’s board was under some pressure to look outside for new leadership but with James’ concentration on software and services, the company may have signaled its willingness to dig deeper in new growth areas. Nonetheless, Krzanich isn’t likely to have an easy time of it. Intel’s sales eroded by more than $650 million last year and the company’s efforts to find a foothold in the mobile market have been unimpressive.
Right away, Krzanich will have to oversee a smooth launch of Intel’s Haswell processors, power misers built to compete with ARM-based chips used in mobile devices. And, he must make certain that Intel’s manufacturing transition to using 450mm wafers--a costly, long-term investment intended ultimately to pare production costs—goes smoothly. Krzanich’s manufacturing experience will come in handy here. He is fresh off of running Intel’s manufacturing operations and handling its supply chain, human resources, and information technology operations.
Krzanich already is on record vowing that Intel will leverage its manufacturing heft and expertise to dig a deeper bunker in the mobile device market, particularly for smartphones and tablets, and perhaps smart watches, if and when, they emerge. Moreover, he is said to have sold Intel's board on a plan to muscle in on Qualcomm's (NASDAQ: QCOM) market dominance for mobile-device chips.
And, he's not giving up on PCs either. In an interview with USA Today, Krzanich said the company will not abandon the downtrodden PC market. "Our strategy is not to throw away PCs, but to continue to serve that market and mobile devices as they morph (in different shapes and uses)," he said.