Intel CEO Envisions IoT, Data Centers, 5G Wireless As Antidote For Sagging PC Sales

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One week ago, Intel took the drastic step of laying off 12,000 employees, representing 11 percent of the company’s workforce by mid-2017. While we are always saddened to hear about such wide-scale layoffs in the tech industry, the writing has been on the wall as PC sales have been on a downward trajectory for years.

At the time, CEO Brian Krzanich hinted at his plans to transform Intel “from a PC company to a company that powers the cloud and billions of smart, connected computing devices… As we drive this transformation, there is an extraordinary opportunity ahead. We will emerge as a more productive company with broader reach, and sharper execution.”

Today, Krzanich is outlining his strategy for putting Intel in the position to remain at the forefront of hot new market segments while at the same time strengthening its position in existing markets where it shows dominance.

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Intel CEO Brian Krzanich

Intel’s first area of focus will be in the cloud and data center markets, which Krzanich says leverages the company’s existing strengths. “There is much more value to unlock from the cloud and data center, and analytics is the key to that,” Krzanich explains. “We’ll accelerate the power and value of analytics by continuing to innovate in high-performance computing, big data and machine learning capabilities.”

The second area of concentration is on the Internet of Things (IoT) market, which seems to be quite the buzzword these days in tech circles. Intel is working on power-sipping SoCs to power a new generation of IoT devices and sees huge growth potential in the sector. In fact, ABI Research predicts that the number of business-to-business (B2) IoT connections will quadruple to 5.4 billion by the year 2020. IoT is already a $2 billion business for Intel and there’s plenty of room for growth.

On the downside to the IoT push, Intel recently lost Doug Davis, who left the company after over three decades of service. Davis led the IoT Group and helped turn it into a booming revenue generator. While Davis has said that he will stay onboard while a successor is found, and Intel likely has a deep bench pull from, losing someone with some much experience is definitely a blow to Intel’s IoT aspirations.

3D Xpoint Benefits And Applications

Thirdly, Intel is tackling memory and programmable solutions, namely Rack Scale Architecture, silicon photonics and 3D XPoint. 3D XPoint has been especially interesting to our audience, as the technology — which was development in conjunction with Micron — promises to be 1000 times faster and 1000 times more reliable than your garden variety NAND. Intel’s upcoming Optane SSDs, which are built using 3D XPoint technology, are showing great promise as witnessed by an on-stage demo at IDF China earlier this month (the demo showed Optane SSDs transferring a 25GB video in just 15 seconds).

The fourth driving force will be in wireless connectivity -- an area in which Intel already has a large presence. Back in February, Intel announced that it is partnering with Ericsson, Korea Telecom, Nokia, SK Telecom and Verizon to push 5G mobile networks for business and residential customers. The company is already in the prototyping stages for 5G hardware and will begin 5G wireless trials with Korean Telecom in 2018.

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“In this way, connectivity is fundamental to every one of the cloud-to-thing segments we will drive,” states Krzanich. “As the world moves to 5G, Intel will lead because of our technological strength to deliver end-to-end 5G systems, from modems to base stations to all the various forms of connectivity that exist today and will exist tomorrow.”

Finally, Krzanich says that Intel will continue to follow Moore’s Law to make further breakthroughs in chip technology in the future. “In my 34 years in the semiconductor industry, I have witnessed the advertised death of Moore’s Law no less than four times,” Krzanich adds. “As we progress from 14 nanometer technology to 10 nanometer and plan for 7 nanometer and 5 nanometer and even beyond, our plans are proof that Moore’s Law is alive and well.”

These business outlined above generated over 40 percent of Intel’s revenue and the majority of its operating profit during 2015. And going forward, Krzanich hopes that they will continue to be profit generators.

“Intel is uniquely positioned to power the cloud and drive the increasingly smart, connected world,” Krzanich concludes. “We see tremendous opportunity in the growth of this virtuous cycle – the cloud and data center, the Internet of Things, memory and FPGAs all bound together by connectivity and enhanced by the economics of Moore’s Law – which will provide a strong and dynamic future for Intel.”