Intel shifts more resources toward tablets and wearables

Intel chief executive Brian Krzanich said in an analyst conference call today that the world’s biggest chip maker hopes to offset declining PC chip revenues by investing more heavily in tablets and wearables.

Krzanich said that Intel chips went into about 10 million tablets that were sold in 2013. Many of those were Microsoft Surface tablets, but they included Intel x86-based tablets from other companies as well. Krzanich touted such tablets as well as wearable technology during his keynote speech last week at the 2014 International CES, the huge tech trade show in Las Vegas.

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Krzanich said that enterprise PC chip sales fell short of expectations in the fourth quarter, but data center and cloud revenues were strong. The cloud itself was up 35 percent during the fourth quarter. Overall PC sales were flat in the year, but Krzanich said Intel is targeting 40 million tablet chip sales in 2014.

“We are better positioned as we head into 2014,” Krzanich said. “2014 will be an exciting year as we build on this new foundation.”

In the fourth quarter, Intel reported slightly better revenues than expected and earnings that were slightly below targets.

Intel is forecasting flat revenues in 2014, but the mix of products will change as the company brings new products to market more quickly. At CES, Krzanich talked about Edison, a tiny chip based on the company’s new Quark architecture, aimed at the wearable market. That chip wasn’t on the roadmap just six months ago, when Krzanich took over as CEO.

He said Intel’s emphasis is on “bringing innovation to market quickly.”

Intel is also touting 2-in-1 designs, or hybrids with both laptop and tablet functionality. By back-to-school season in 2014, Krzanich said computer makers would launch about 70 new 2-in-1 designs.

Overall, Intel’s emphasis will be on data center chips, tablets, and low-power system-on-chip products such as Edison.

“We are well on our way to reinventing the PC,” Krzanich said.

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During 2014, Intel expects to spend $11 billion on capital projects, about flat compared to last year.