Intel CEO Tells Employees That Mobile Effort Will Be `Marathon'

Intel Corp. Chief Executive Officer Paul Otellini, working to get his company’s chips into tablets and mobile phones, told employees that the effort will be a “marathon, not a sprint.”

“The big question on many people’s minds is how will we respond to new computing categories where we currently have little presence, specifically tablets and smartphones,” he said yesterday in an e-mail to Intel workers obtained by Bloomberg News. “Winning an architectural contest can take time.”

The company has struggled for more than 10 years to parlay its dominance of the personal-computer market into a stake in mobile phones and other devices. Its chips aren’t used in any current smartphones, and new tablets from Apple Inc. and rivals don’t rely on Intel processors. Otellini said in the e-mail that the company is “on track to showcase our first production smartphones in 2011.”

Intel, the world’s largest chipmaker, renewed its push into mobile technology four years ago, when it introduced a scaled- down version of its processor called Atom. That effort should have started two years earlier, Otellini said at a conference this month. Still, Intel has come from behind before and thrived, he wrote in the e-mail.

When the company offered its first chip for the server- computer market in the 1990s “some in the industry laughed at us,” Otellini said. The company now ships more than 90 percent of the chips used in that market, he said.

‘Very Optimistic’

“I am also very optimistic about our opportunity in tablets and smartphones, even though we are not first to market with a solution,” Otellini said. “Ultimately, we can and will lead.”

Tom Beermann, a spokesman for the Santa Clara, California- based company, declined to comment on the memo.

Intel rose 11 cents to $19.35 at 9:44 a.m. New York time in Nasdaq Stock Market trading. The shares had declined 5.7 percent this year before today.

Even as Intel searches for new sources of growth, a recovery in PC sales has helped boost revenue and profit this year. Otellini said this week that the PC market is on course to grow 18 percent in 2010 and will likely achieve double-digit growth again next year. More than 80 percent of the world’s PCs run the company’s processors.

To contact the reporter on this story: Ian King in San Francisco at ianking@bloomberg.net;

To contact the editor responsible for this story: Tom Giles at tgiles@bloomberg.net.

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