Intel picks insider as CEO, dashing investor hopes for shakeup of firm
By Noel Randewich and Sinead Carew ,Reuters
May 4, 2013, 12:16 am TWN
SAN FRANCISCO/NEW YORK -- Intel Corp. chose veteran insider Brian Krzanich as chief executive, disappointing some investors who hoped an outsider would push for aggressive changes to help the world's largest chip-maker catch up in the mobile revolution.
The company also announced on Thursday that software honcho Renee James, 48, had been elevated to the post of president. Her appointment signaled to some that Intel, while likely intending to stick with its formula of intense investment to keep it ahead in the microchip technology game, is willing to explore new growth areas.
The company said last November that it might go external for its next CEO, raising hopes that it might find someone to shake it out of recent doldrums.
Seen as a frontrunner for the job since November, Krzanich inherits a company with margins of almost 60 percent that has all but extinguished rival Advanced Micro Devices Inc. in the past few years, and is now the dominant maker of microprocessors for computers and servers.
But the company is in danger of finding itself sidelined as mobile devices such as tablets and ever more powerful smartphones accelerate a contraction of the personal computer market. The majority of gadgets today run processors based on rival ARM Holdings PLC's power-saving chip architecture.
“An external candidate might have been a better choice — with no negative reflection on Brian — simply because of the juncture Intel is at with what's happening in the PC market and the need to take major action outside of PCs,” said Cody Acree, an analyst at Williams Financial Group.
“Brian may very well come in and make those same very difficult dramatic choices, but it's less likely.”
He will take on the top job at the company's annual shareholder meeting on May 16, replacing Paul Otellini.
A relative unknown outside the tight-knit semiconductor industry, Krzanich has worked at Intel since 1982, rising to chief operating officer just over a year ago.
The 52-year-old has earned a reputation for being a decisive leader who liked to keep a low profile. Intel on Thursday stressed that he will have a strong partner in James, who in 2011 spearheaded Intel's US$7.7 billion acquisition of No. 2 security software firm McAfee Inc.
She ran software product and service sales as well as a team of engineers focused on improving the performance of Microsoft Corp.'s Windows 8 and Google Inc.'s Android software when run on the company's microchips.
Her elevation “puts emphasis on the many businesses Intel is in beyond just chips. This is an important promotion, and it clearly signals the board wants to make Intel a much broader company,” said Jack Gold, who runs research outfit Jack Gold Associates.
Intel shares closed 0.5-percent higher at US$24.11 on the Nasdaq on Thursday.