Intel is preparing a new reorganisation to meet " business realities", Intel CEO Paul Otellini said at a financial analyst conference this morning.

These things always sound so much better after they are polished up by public relations. But the reality is that Intel failed to anticipate AMD's competition as well as several market trends.

Demand for PCs is starting to level off, and Intel's premium brand positioning makes it a second tier supplier for price conscious markets that show the most growth.

The chipmaker meanwhile is using its platforms to ignite demand for its forthcoming processors. The Viiv platform for instance will entice consumers to put a PC in their living room where there was none before, allowing Intel to sell additional processors. Meanwhile the vPro platform promises to reduce desktop maintenance costs. Those cost savings, Intel hopes, will persuade businesses to purchase systems with the latest Intel chips instead of opting for an older (and therefore cheaper) model.

But it will take several months because those efforts will provide any pay-off. In the mean time Intel will have to see how AMD continues its march forward, and rubs in the Intel's past mistakes.

As Intel is shaking up things, perhaps its time to reconsider the "Leap ahead" new corporate tagline as well.

Mr. Otellini on Monday, facing a leap backwards in the comapny's financial succes.

Tags: intel, AMD, corporate restructuring, paul otellini

27 Apr 2006