January 17, 2005 9:25 AM PST

Intel launches broad reorganization

Intel on Monday announced a company reorganization that will create five new divisions, including one to focus on technologies in digital health care and another on the chipmaker's distribution channels.

The reorganization will also create divisions to focus on platforms for mobility, the digital enterprise and digital home.


Paul Otellini
president and,
COO, Intel

"The new organization will help address growth opportunities by better anticipating and addressing market needs, speeding decision making, and ensuring world-class operational excellence," Paul Otellini, Intel president and COO, said in a statement. "Each operating unit has the autonomy to allocate computing and communications resources to be successful, making Intel's entire structure consistent with our platform products strategy."

The reorganization encompasses five divisions:

• The Mobility Group will develop platforms for notebook PCs and handheld computing and communications devices, and is aimed at making the growing numbers of different mobile devices work together better and easier to use.

• The Digital Enterprise Group will develop computing and communications infrastructure platforms for end-to-end solutions in businesses.

• The Digital Home Group will develop computing and communications platforms for use by consumers in the emerging digital home, with emphasis on living room entertainment applications and consumer electronics devices.

• The Digital Health Group will develop products and explore business opportunities for Intel architecture products in health care research, diagnostics and productivity, as well as personal health care.

• The Channel Products Group will seek to expand on Intel's success in global markets by combining into one organization existing groups focused on developing and selling Intel products to meet the unique needs of local markets worldwide.

Organizing the company around platforms versus products like flash memory and processors builds on the sales success the company achieved with Centrino, the bundle of chips that go into notebooks. With Centrino, Intel sells a processor, a chipset, a Wi-Fi chip and often other parts to a computer maker, which otherwise might have been inclined to buy different parts from different manufacturers.

Potentially, the reorganization around platforms will give Intel an opportunity to sell processors to the cell phone companies that currently buy its flash memory. Intel sells a lot of flash memory to cell phone makers but few processors.

Bundling chips into a platform, however, doesn't guarantee success. Intel has sold different chip bundles for cell phones for about four years but has yet to seriously challenge Texas Instruments in the market for cell phone processors.

The regrouping will also likely give Intel an opportunity to get into new markets, such as health care. Already, Intel has hired social scientists to conduct studies to determine where hospitals or health care workers could integrate PC technology. The Digital Home Group was created last year.

The reorganization introduces few new faces to the upper level of company management. Except for Eric Kim, who joined Intel from Samsung last year, all of the executives have been at Intel for years and held various positions.

Intel's statement made no mention of a possible successor to Otellini, who will be promoted to CEO in May. However, the three leading contenders to succeed Otellini as COO and president--Sean Maloney, Louis Burns and Pat Gelsinger, also all figure prominently in the reorganization.

The chipmaker also said that Jason Chen, vice president and director in the sales and marketing group, plans to leave Intel at the end of January because of a family health matter.

 

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