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November 19, 2012

Intel CEO Paul Otellini Breaks with Tradition, Retires Early

By Steve Anderson, Contributing TMCnet Writer

Intel's CEO, Paul Otellini (News - Alert), recently brought out plans that are raising some eyebrows at the chipmaker, planning to retire early. Otellini will be stepping down this May, which itself represents a marked change from the ordinary and has Intel (News - Alert) scrambling to find their next CEO.

Otellini's plans for early retirement are somewhat unusual at Intel, where chief executives commonly stay in place until their mandatory retirement age of 65. Given that Otellini is 62, this clear departure from the norm is what has more than a few hackles raised. Otellini cited a need to bring in fresh leadership for Intel, according to sources, and Intel spokesman Paul Bergevin said that the decision behind the departure "was entirely Paul Otellini's", and the Intel board itself accepted the decision only "with regret".

Image via Shutterstock

Intel plans to start looking both far and near for a replacement for Otellini, considering both internal and external candidates, but Intel seems to have some potential candidates in mind as evidenced by a bump to executive vice president rank for three such individuals. Specifically, Intel gave the nod to the head of their software business Renee James, their chief operating officer (who also heads world-wide manufacturing efforts) Brian Krzanich, and their chief financial officer Stacy Smith, who also handles corporate strategy.

Otellini's stance on having new leadership in the company makes some sense in view of Intel's recent history, dominated by desktop computers, which are now starting to see something of a decline in favor of more mobile devices like tablets and smartphones. But at the same time, analysts like Patrick Moorhead at Moor Insights & Strategy, credit Otellini as giving Intel "a fighting chance" when it comes to mobile devices.

It would make sense, therefore, for Otellini to seek a new leader to capitalize on the "fighting chance" in mobile technology; more so given the series of ups and downs that a soft economy and changing technologies have inflected on the blue chip superstar. But getting in on the growing mobile technology market is going to have to be a top priority for Intel, if for no other reason than Intel can't continue to operate on the strength of desktops and supercomputers alone. The mobile market is just too big to miss out on, and though desktops and supercomputers will likely never go away, their part of the business will, inevitably, never be what it once was. Otellini laid some exciting groundwork for same at the 2012 Mobile World Congress (News - Alert) show in Barcelona, but actually executing this concept may, indeed, require that brand of fresh leadership Otellini had some interest in bringing into play.

The end result for Intel remains to be seen, but given who they're already considering, and who they may well find from the outside, it looks like Intel will have a solid chance at success in a rapidly changing environment.

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Edited by Brooke Neuman
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