The company will accomplish that by continuing to invest large amounts in research and development, CEO Craig Barrett said in a keynote address Tuesday at the gathering. The world's largest semiconductor manufacturer reported $7.5 billion in earnings last year on revenue of $34.2 billion and has cash reserves of more than $14 billion. It has used its financial strength and investments in R&D as a hammer over the years against would-be competitors.
"You have two choices with R&D: lead or be led," Barrett said. "R&D drives the next level of innovation. You can have the best business model in the world, but if it's creating last year's technology, it will not be successful."
The R&D investment is focused on moving Intel beyond being a provider of processors to a creator of platforms, Barrett said. Centrino, which combines a Pentium M processor on a chipset with an integrated wireless LAN, was Intel's first platform product. It has been an unqualified success, raking in more than $5 billion in revenue in less than two years.
Intel plans a Centrino upgrade next year with its Napa platform, which will integrate the company's first dual-core Pentium M processor, code-named Yonah; enhanced graphics functions, code-named Calistoga; and improved Wi-Fi technology, code-named Golan.
"We've just scratched the surface with Centrino," says Rama Shukla, co-director of the mobile-products group. "Our platforms are designed to make sure we are providing the best possible end-user value."
Intel also is a major backer of WiMax, the next generation of Wi-Fi technology. WiMax will support speeds of more than 2 Mbps over distances of two to three miles. Products complying with the WiMax standards are expected to begin appearing later this year.
Platforms aren't what all computer makers are looking for, says Bahr Mahony, division marketing manager of the mobile business unit for Intel rival Advanced Micro Devices Inc. Many computer makers want the freedom to select the best wireless technology on the market and not be forced to utilize an integrated system. "They want choice and the ability to differentiate," Mahony says.
Customers are always free to pick and choose components, Shukla says. But Intel believes that combining technology such as processors, interconnects, and other bits of "embedded IT" such as virtualization and self-managing capabilities to create chipsets and related platforms is the wave of the future.
Some of those upcoming platforms will include Anchor Creek, a home desktop product; Bensley, a two-socket Xeon offering; and Montvale, a two-socket Itanium product.
While the company has been successful in many markets, it has stumbled in others. Despite spending large sums over the past six years, Intel has failed to achieve major gains in two areas: Itanium, Intel's 64-bit architecture that's designed to replace traditional RISC-based server architectures, and its cellular-phone processor initiative. Two top server makers, IBM and Dell, have said that Itanium isn't playing a major role in their future plans, and Barrett has acknowledged that Intel's cell-phone initiative has been a disappointment.
Pat Gelsinger, senior VP of Intel's Digital Enterprise Group, said IBM has never been a strong supporter of Itanium and that the chip wasn't a particularly good fit for the Dell portfolio. Still, strong demand by other server makers such as Fujitsu, Hewlett-Packard, NEC, Silicon Graphics, and Unisys will help secure Itanium's place as the choice for RISC replacement in the years ahead, he says.
In the cell-phone market, despite an investment of between $4 billion and $5 billion since 1999, the company's batting average today "is somewhere around 0.000%," says Will Strauss, an analyst with Forward Concepts.
Intel, however, remains attracted by the potential volumes in the market. Around 700 million cell phones shipped in 2004, and the market is expected to grow to 1 billion by 2009. Sean Maloney, executive VP and general manager of Intel's mobility group, says the cell-phone effort has made significant progress in the past two years, including eight consecutive quarters of unit growth.
Texas Instruments Inc., whose digital signal processors are the leading technology used by cell-phone makers, struggled for seven years before its effort turned a profit, Strauss says. "Intel has got the pockets that can keep them plugging along."