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Web 2.0 Summit: Intel CEO Expects PC Sales Surge

Paul Otellini sees businesses moving to replace their aging hardware and promise in moving to a more distributed approach to healthcare.

Relief that the economy appears to be on the mend is proving to be a common sentiment at the Web 2.0 Summit this year.

Intel's strong earnings report last week is being credited with helping push the Dow past 10,000 for the first time in a year and CEO Paul Otellini sees reason for optimism.

In an interview with Web 2.0 Summit program chair John Battelle, Otellini said that PC sales are looking up.

"We're likely to see PC unit volume this year above 2008, which you wouldn't have thought a year ago," he said, crediting growth in China.

Come 2010, Otellini expects increased corporate sales, as companies move to replace aging equipment.

"In general, corporate budgets are still clamped down," he said. "I expect that to change in 2010."

The average corporate desktop, Otellini observed, is five years old and the average notebook is four years old. Many of those machines cannot run Windows 7.

"We're set up for a scenario where they have to be replaced," he said.

Otellini -- who, according to Battelle, has previously observed that the pace of netbook adoption is outpacing both the Nintendo Wii and Apple's iPhone -- is also bullish about the future of netbooks.

The first round of netbooks appealed to people as low-cost, second PCs, particularly for their kids, said Otellini. "Now they're starting to sell to first-time users in emerging markets like India," he said.

Asked what he made of Microsoft's shift from loathing to loving cloud computing, Otellini said that from a hardware perspective, cloud computing isn't much of a change. "I like [Larry] Ellison's definition of the cloud," he said. "He said there's nothing new here. You still have servers, networks, and clients. What's different is the use model."

Otellini conceded that it makes sense to serve some applications from the cloud, but not all of them. "I don't think I'd put my payroll system into the cloud," he said.

Otellini also expressed confidence in the market for healthcare IT, noting that Intel has partnered with GE to focus on home healthcare. "Let's keep people [in need of medical treatment] at home longer," he said, noting that home care represents the lowest cost to society. "We're developing a family of devices to allow that," he said, citing video conferencing and intelligent medication systems as examples.

Healthcare, he said, needs to shift from a centralized model to a distributed one.

As the subject turned to Moore's Law -- Intel co-founder Gordon Moore's observation that research tends to drive the doubling of transistor density roughly every two years -- Otellini said that Intel knows how to design the next three generations of silicon chips.

After that, in perhaps six years or so, continued chip processing advancements are less certain. But Intel seems to be ready to revise Moore's Law by moving beyond silicon.

"Moore's Law is not a law of nature," said Otellini. "It's a law that reflects human inventiveness."

Otellini said that Intel has a non-silicon prototype, in case traditional silicon chip design methods hit a wall. Asked to describe it, he said only, "It's cool."

InformationWeek and Dr. Dobb's have published an in-depth report on how Web application development is moving to online platforms. Download the report here (registration required).

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