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Intel running mobile "marathon," iPhone and iPad have head start


Intel Chief Executive Paul Otellini sees the mobile race as a "marathon" that the company will ultimately take the lead in, in spite of Apple's significant head start.

Otellini expressed the views Wednesday in an email to employees, which was obtained by Bloomberg. Echoing Tuesday's earnings call comments, he referred to "the big question on many people's minds" as how Intel will make up for its minimal presence in the tablet and smartphone markets.

"Winning an architectural contest can take time," said Otellini in the email, noting that the effort will be a "marathon, not a sprint."

Despite being the world's largest chipmaker, Intel does not provide chips to any current smartphones or high-profile tablets. The Santa Clara, Calif., company is "on track to showcase [its] first production smartphones in 2011," said Otellini, but skeptics suspect that it's too little too late.

Otellini himself has said that the company's mobile Atom processor should have come 2 years earlier. The Atom chips have proved to be too power-hungry for most mobile implementations smaller than a netbook. Early rumors of an Atom-based Apple tablet or smartphone failed to materialize. The iPad and iPhone instead run a custom-built ARM A4 processor.

Citing the company's late entry into the server market, which it now dominates with over 90 percent market share, as an example of a come-from-behind success, Otellini remains undaunted.

“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.”

Intel posted record earnings this week, but Otellini admitted that the iPad and other tablets may be eating away at PC margins, especially netbooks. Otellini hinted that tablets will "probably" impact PC sales.

"We take a longer-view of the tablet opportunity," Otellini told investors Tuesday. "In the end, it will be additive to our bottom line, and not take away from it."