Bull Market: Scenes From Intel's Investor Meeting

Outlook: Sunny And Bright

Intel hosted its annual Investor Meeting this week at its Santa, Clara, Calif. headquarters. Chief Executive Paul Otellini and other key Intel executives offered financial guidance, product previews and a general outlook on technology markets to investors, analysts and media at the day-long event under sunny Silicon Valley skies.

Bullish On Growth

Intel has enjoyed several strong fiscal quarters following some tough months following the Wall Street meltdown of September 2009. And the chip giant sees these brighter days picking up -- the story at the Intel Investor Meeting was bullish on overall market growth for computing products and strongly optimistic towards sales and earnings growth for the company itself in the next several years.

CRN and Everything Channel Systems Editor Damon Poeter, pictured, was on hand to report the news from the world’s largest microprocessor manufacturer. Take a stroll with us and discover what Intel had to say at Tuesday’s Investors Meeting.

Waiting For Paul

The crowd at Intel Investor Meeting 2010 awaits the start of Intel CEO Paul Otellini's opening keynote early Tuesday morning. In addition to Otellini, several key Intel executives were on hand to offer deeper dives into product categories and market segments at the Investor Meeting.

Growth In His Sights

Intel CEO Paul Otellini addresses the audience during his opening keynote at Intel's Investor Meeting. Otellini forecast double-digit growth in revenue and earnings-per-share for Intel over the next few years as the chip giant's technology leadership and expanding software and service capabilities meet a robustly growing global market for computing products and services.

Three Ways To Profitability

Intel CEO Paul Otellini informed investors of three main areas the chip giant is focusing on to maximize profits in the coming years. The company first seeks to maintain its CPU product leadership with new System-on-Chip (SoC) architectures, and through its "tick-tock" model of regular upgrades to its silicon fabrication technology and chip designs.

Intel also wants to consistently enhance its hardware platforms with better vPro-branded security and management tools, HD graphics, and WiMAX and Wireless Display (WiDi) technologies. Finally, Intel is looking to aggressively expand its user base in emerging markets like Mexico and India, particularly with its Atom-based netbook offerings.

Getting Bigger All The Time

Computer shipments are growing in every segment and across all geographies, according to Intel CEO Paul Otellini. The chip giant expects the overall market for PC computers to grow 15 to 16 percent from 2010 to 2014, and Otellini predicted Tuesday that his company will be shipping a billion units of Intel product per year within the next five years.

Expanding The Business

A major theme of the day at Intel's Investor Meeting was the company's ongoing transition from "a computer chip company to a computing solutions provider," according to Otellini. Intel is not content with being just a semiconductor manufacturer in a world where introducing new, transformative computing technologies is "not just a silicon play anymore."

Intel is already well on the path to becoming far more than a chip maker, with some 22 percent of its non-manufacturing employees working in software. "It's a big and growing part of our company and I would expect it will grow as a percentage of our headcount in the coming years," Otellini said.

Smart TV Party

Intel CEO Paul Otellini talks up the company's initiatives in developing so-called Smart TV. "The television revolution we're about to go through will be the biggest change since we moved to color," Otellini said. Intel will be right there leading the Smart TV charge, he said, with Intel WiDi technology that allows users to connect their notebooks to HDTVs and computer displays without any cables, and the Atom CE 4100 processor, which offers "best-in-class audio-video performance compared to ARM."

Video Made The Internet Star

What's everybody doing on the Internet these days? Looking at lots and lots of video, according to Intel CEO Paul Otellini. Intel is particularly interested in building best-in-class HD video technology into its current and future processors and hardware platforms, and its new Atom Z600 platform is "the only smartphone chipset capable of running 1080p video," he said.

"What do people do on the Internet? Well, today most of it is video. Tomorrow, most of it will be video," Otellini said. "Video is driving Internet traffic growth. This is important when you consider how you want to design your future products."

We Eat Cannibals

Answering a long-standing question about Intel's line of low-power Atom processors for netbooks, Otellini said there was little evidence that the cheaper mobile PCs were "cannibalizing" full-featured notebook sales. Netbooks are "playing out as 'another computer,'" added Tom Kilroy, senior vice president of Intel's Sales and Marketing Group, pictured here, in a later address to investors

Kilroy said just 5 percent of netbooks were being purchased to replace notebooks, per Intel's research. Some 7 percent of netbook purchases were by first-time computer buyers, while the remaining 88 percent were used as complementary devices to more powerful mobile PCs.

Waiting For Sandy Bridge

The Intel Investor Meeting also offered a preview of the chip giant's product roadmap for the rest of 2010 and beyond. Here, Dadi Perlmutter, executive vice president and general manager of the Intel Architecture Group, discusses the upcoming Sandy Bridge microarchitecture for the chip giant's main server and client processor families.

Sandy Bridge is the successor to 2009's Nehalem on Intel's "tock" cadence of product improvement and Perlmutter said it will be shipping to Intel's OEM, ODM and system integrator partners before the end of this year, with an official release scheduled for early 2011.

Taking On Tablets

Intel CEO Paul Otellini observes presentations from the audience at Intel Investor Meeting 2010. One hot topic that Otellini addressed head-on at the event was the growth potential for tablet PCs in the wake of Apple's initial success with its iPad. Otellini downplayed the challenge posed by tablets -- many, like the iPad, powered by ARM-based processors -- to Intel's low-power Atom chips which dominate netbooks.

He dismissed the tablet category as "relatively insignificant" in the overall market for computing products and said that tablets, like netbooks, were "additive" devices that didn't challenge full-featured PCs. At any rate, Otellini mused, the product category would "probably be good for Intel, long-term."

Pining For Pineview

A silicon wafer chockfull of Intel's Atom N400 processor cores was on display at Tuesday's Investor Meeting at the company's headquarters. These latest-generation Atom chips -- formerly code-named Pineview and part of Intel's Pinetrail netbook platform -- were released in January 2010 and feature a System-on-Chip (SoC) architecture with a single-channel DDR2 memory controller and integrated graphics core in the Atom N400 CPU package.

Intel plans to release an update to Pineview in the second half of 2010, adding DDR3 memory support to these low-voltage SoC processors. In the second half of 2011, the company will transition its Atom family to 32-nanometer process technology with the first such Atom products code named Cedar Trail.

Refresh On The Way?

Intel-powered laptops on display at the chip giant's Investor Meeting offer an illustration to a key message at the event -- replacing aging business notebook fleets is currently "top of mind" with CIOs at enterprise organizations as the economic recovery strengthens, according to Intel's Tom Kilroy.

In fact, Intel was also bullish about a surge in demand for its data center products from business customers following a recessionary period that saw upwards of a million servers delayed in their normal refresh cycle by a year. Some 76 percent of Intel's server install base is due for a refresh, according to Kilroy.

Bull By The Horns

It sounds trite, but it bears repeating -- Intel was extremely bullish at its annual Investor Meeting, and the crowd retiring outside Intel headquarters during breaks was buzzing with the chip giant's bold guidance for surges in revenue, profits and broad growth of the technology sector.

And Intel is in a better position than ever to take advantage of new opportunities, according to CEO Paul Otellini. The company's investments in technologies and service capabilities to add to its manufacturing strength have made the company "one of the fundamental computing companies in the industry" and one that was "increasingly differentiated and unique."