Intel (News - Alert) may be best known for its “Intel Inside” role of powering the majority of the world’s PCs, but the world's largest chipmaker is staking its future on software and apps.
The company’s software group has more than 5,000 engineers worldwide, and it’s true that it has always coded software to accompany its silicon. But, a sea change is afoot as the company starts to look beyond its marriage to Windows to find new niches in the changing tech ecosystem. Looking at macro-trends, such as the move to the cloud and standardized hardware, and the rise of the Internet of Things, it has become clear to the company that a hardware-first approach has limited runway left.
For one thing, the company has begun to listen to how end users want to approach computing — and has realized that it’s the applications that define the value of the hardware platform these days, not the other way around.
"That's the thing where I find Intel changed the most," Pete Baker, vice president at Intel’s software group, told the Oregonian. "The company's really got a more outside-in perspective."
Intel is ready to have a piece of the conversation in a post-PC world where billions of new devices are expected to come online by 2020, mostly geared to a cloud-based content and services value proposition.
Intel in fact underscored the need for the transition last week when it warned that its first-quarter revenue will miss expectations by as much as $1 billion, because of flagging desktop computer sales. PCs and laptops account for nearly two-thirds of its revenue — a quandary if the company can’t pivot in its strategy.
"We have to be much closer to the market and serve the market," said Doug Fisher, Intel vice president.
Catering to consumer thirst for smart applications means creating an environment where developers can create native applications for specific new form-factors. For instance, Intel's 3D RealSense camera, which can sense depth and scale, is being touted as a development platform. Intel sees the services that run on the camera as a path to differentiation; for instance, one application creates an avatar of the user for online chats that replicates the user’s actual facial expressions, in real time.
It also has a partnership with Tag Heuer and Google (News - Alert) to create a smartwatch that can take on Apple and Samsung, two vendors that have built their businesses on walled-garden approaches. With a more open developer policy, the Swiss timepiece may be able to capture a market lead.
In addition to new gadgets, the company is particularly taking the app-led tack when it comes to more traditional mobile devices. Initially Intel had to play catch-up to ARM (News - Alert) processors, which are made for mobile form-factors. They save battery life and have a lightweight profile to cut down on manufacturing costs — but, the trade-off comes in horsepower.
Recently, Intel has made plenty of headway with its more powerful Atom chipset, after creating a version of Android (News - Alert) that supports Atom natively, and giving away subsidies to tablet-makers for using them. That costly effort has paid off with the sale of 40 million tablet chips last year, but here too, software is the lead of the story. Developers like the fact that they can code for the chipset natively, which cuts down on costs and glitches. To date, 85 percent of the most popular Android apps in the Google Play store can now run natively on Intel chips.
Intel also powers the Chromebook laptop line, having replaced ARM there last year.
It’s going after the gaming segment in a similar fashion. Earlier in the month it announced a software development initiative for its graphics platforms, to help game developers “be even more successful at creating great games using Intel platforms and technology.” The company will be providing additional training, resource portals and specialized software tools for performance evaluation and tuning, plus contests, demos, education and awards.
It’s also worth noting that Intel is taking a post-PC tack in traditional computing as well. On the open-source front, the chipmaker was the largest corporate sponsor last year of new contributions to the Linux computer operating system, according to the Linux Foundation—the first time a hardware company has held the top spot. It even beat out Linux specialist and reigning champ Red Hat (News - Alert). In all, Intel employees contributed more than 10,000 changes to the Linux kernel last year, which is 10.5 percent of the total.