Chipmaker Intel not only wants to get inside the personal computer, it now wants to be outside, too, amid slumping demand for PCs that has Intel touting new consumer devices to change the way PCs are used.
For years Intel, the world's largest maker of microchips for PCs, has built its processors faster to meet the needs of advanced spreadsheets, word processing software and the Internet, and it has used the advertising slogan "Intel Inside" to build brand recognition.
But at the International Consumer Electronics Show in Las Vegas on Friday, Intel Chief Executive Officer Craig Barrett showed off products such as a new wireless tablet that allows users to browse the Internet 150 feet from a PC as ways to extend the PCs' functionality.
While many of today's consumer-oriented software programs don't need a faster processor, these new applications do. And Intel, which launched its latest Pentium 4 chip just last November, wants to supply the microprocessing power.
"Our core business is still selling processors and chipsets," Barrett told Reuters. "Consumer products are basically an extension of that ... of what you can do to find new users and new uses for the PC. Make the PC more exciting. You sell more PCs; you sell more microprocessors."
Intel has its biggest presence ever at the Consumer Electronics Show - one of the largest gatherings of its kind for makers of audio, video and other electronic equipment - because it wants to illustrate its view of the future where a PC is the centre for many communications and media functions.
Among its list of products, Intel showed the wireless Web tablet, a portable digital assistant with a built-in cellphone that can trade files with a PC via a wireless connection, its new Pocket Concert audio player using MP3 technology to take music files off a PC and put them into a portable player.
Intel is not alone in its quest to extend PC capabilities to other products. Sony has its version of a wireless tablet, and Philips Electronics showed various home audio and portable audio equipment that used MP3 technology.
Still, some financial analysts and industry watchers are concerned that a technology company like Intel is overreaching its boundaries and losing focus on its core business in chip architecture and production.
"We've got 85,000 employees, and my attitude is if we can't walk and chew gum, we probably don't deserve to be in business," Barrett said, adding that Intel also has operations in networking and communications.
He also said that the company's ventures into consumer products made up a small fraction of the some US$6 billion in capital expenditures in 2000.
While Intel's focus on consumer products is viewed by the company as a way to boost longer term prospects, it still must contend with the threat of a slow economy in 2001 and how that would affect purchases of information technology equipment.
Barrett said he doesn't know whether recent Federal Reserve cuts to interest rates will turn around the U.S. economy, but he did note that while the US is going through a slump, overseas economies in Asia and Europe are performing solidly, which should bode well for global players like Intel.
"The Fed's made a move; they may make another. (President elect) Bush is going to come in and try to institute his tax cut. One of the primary motivators is to restore consumer confidence and get consumer spending going again. How fast that gets turned around dictates what happens in 2001," he said.
1%
4%
