The only way to emerge stronger from a recessionary period, Intel's <B>Craig Barrett</B> says, is by having new products, technologies, and capabilities.

InformationWeek Staff, Contributor

January 23, 2003

4 Min Read

I don't think I'm alone in observing that 2002 was, on the whole, a pretty difficult year for the computing and communications sectors. And as much as I'd like to profess exuberance for the year ahead, I'm taking a very cautious look at 2003 at this stage.

Don't get me wrong--there's plenty of technology to get excited about, particularly in the area of wireless communications. It's just that customers are more skeptical given the economic environment. And who can blame them?

Intel hasn't been shielded from the high-tech slowdown. Our revenue is running about 20% below where it was in the 2000 time frame and has been relatively flat for the last eight quarters. Companies have learned from the '90s how to better spend and invest their money and what technology they should pursue. Ultimately, that benefits Intel's goal to deliver innovative products in high volume at lower prices than proprietary efforts, but short term, the entire industry is feeling the effects of this.

The only way you emerge stronger from a recessionary period is by having new products, new technologies, and new capabilities. It's an absolute must to continue to invest in good times and in bad. For us, this has meant developing new manufacturing technology for this year that uses 90 nanometer advanced-logic wafer fabrication and 300 millimeter silicon-wafer manufacturing. It also means delivering new innovations, such as Intel hyper-threading technology in the Pentium 4 processor. If you don't invest for the future, you have no future.

The convergence of the computing and communications sectors will have a big influence on Intel's strategy this year. The tech sector will probably recover earlier than the communications sector, but the two sectors will become more interrelated as time goes on. If I were to look at one major inflection point in the high-tech industry, it's probably going to be this love affair with 802.11 from a broadband, wireless, local area network capability. All the talk about Wireless Fidelity, or 802.11, indicates that we're going to see a major push in that space this year. Broadband wireless capability is really one of the things driving the convergence of computing and communications. That will let users quickly get high volumes of data to computing devices and let handhelds become both communication and computing devices.

And if we continue to see worldwide 3G wide area network wireless capability at a relatively higher bandwidth, then we'll have the possibility of a wireless WAN/LAN infrastructure that can start to be established around the world. That could be quite a shot in the arm for the high-tech industry everywhere, from the communications people to the computing people to the infrastructure and semiconductor types.

Customers want performance, security, and a reasonable cost of ownership, so their investment dollars go to technology that can provide these things. IT managers are looking for stable yet modern platforms for their employees. What I hear from customers is, "How do I have one database, one set of applications, one Internet that's got scalable content, regardless of the client I'm using?" Intel-based server adoption and our Itanium processor family address these needs.

I can take a laptop computer anywhere in our Intel building, hit "Enter," and download a big file faster than with a wired PC. It works. You go to the airport, it works. You go to Starbucks, it works. So wireless connectivity is there, but it's being positioned as a complementary technology rather than "this is going to replace everything." It will bring more capability to people and hasten the magic conversion between computing and communication that people are talking about, because it really does allow any computer to be a communication device.

Our next generation of mobile architecture for the PC, Centrino mobile technology, will be introduced with built-in 802.11 wireless capability with the processor and chipset. The market is clearly ready for this technology, but let's hope that it's not over-hyped. Let's hope that the industry remembers what we all collectively said about E-business and the New Economy and all of those other terms that we coined back in the late '90s.

Craig Barrett is CEO of Intel.

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