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With a plea to system builder partners to not "freak out," Intel Vice President and General Manager of the Reseller Organization Steve Dallman Wednesday defended the company's decision to kill its PC motherboard operation after 20 years in the business.
Dallman told CRN in an exclusive interview that the three-year plan to shut down the PC motherboard business is part of an Intel initiative to actually step up the pace of innovation in the desktop PC market. He said the changes will ultimately result in innovative touch and voice command technology being brought to market faster on desktop systems, opening the door to new opportunities and form factors for system builders.
"Don't freak out," pleaded Dallman. "This isn't the end of anything. If you can get people to read the entire announcement, the emphasis is on the importance of the desktop. It is one of our top money-makers. We are taking resources and redeploying them. We are going to be putting a lot of money into new all-in-one [desktop] technology reducing the cost of touch [technology on desktop systems] and bringing new perceptual computing and voice commands to the desktop."
[Related: Intel PC Business Down, Data Center Up In Q4]
The PC innovation offensive is aimed at getting Intel out of the stale "gray square box" PC business, said Dallman. "At some point in time if that didn't change, if new, exciting formats weren't developed and brought to market, that part of the business would die," he said. "What we are trying to do now is take the resources that we have and use them to develop new innovative products for desktops."
Intel is using a three-year phase down of the PC motherboard business to make sure that system builder partners have time to plan and make adjustments to their business, said Dallman.
Intel will deliver PC motherboards for its next-generation Haswell chips, slated to ship later this year, he said.
"Everything is business as usual for this year," he said. "We are still going to build a board for Haswell, which will come out in the middle part of the year. That's going to be a great part. We are going to build that and support that just like we always have. There is actually a whole lot of time for everything to get adjusted and understood." Haswell-based board products will continue to be sold under existing system builder warranties with delivery continuing for the normal life of the product, which is usually 18 months, according to the company.
The first processor generation that Intel will not actually build a motherboard for will be the Broadwell chip that is slated to be shipped in 2014, said Dallman.
Intel disclosed the decision to kill the motherboard business just one week after the company reported that its earnings in the most recent quarter were down 26 percent to $2.5 billion. What's more, Intel said that its PC client business was down six percent in the quarter.
Intel’s decision to exit the PC motherboard business will not affect its server mothboard business. In fact, Intel said it will continue manufacturing of server motherboards out of its Enterprise Platforms and Services division (EPSD).