Intel Reorganization

In April Intel Corporation announced it will merge its Architecture Business and Microprocessor Products groups into a new division.

Pat Gelsinger, discussed the changes in an interview following his keynote address at Windows Hardware Engineering Conference (WinHEC) in New Orleans.

With the reorganization, Pat Gelsinger, vice president and general manager of Intel's desktop products group, will assume the title of chief technology officer and will oversee product implementations across all business groups. Intel said it would release further details of the reorganization later.

"We've been seeing the need for these actions for a while," he said. "We've been orienting our programs more to delivering solutions, put in place the processes to better communicate with our customers and align our roadmaps. We've been addressing those issues through incremental process and organizational improvement. I think it now became very clear that this is the way of the future."

Intel has been unable to produce sufficient supply to match the demands of its major customers, especially for the Celeron and Pentium III processors. In February, Intel said it was ramping up its production and predicted it would be able to meet supply needs by the end of the first quarter, but early in April company officials pushed back that timetable to June.

Intel has blamed the problems on a combination of unexpectedly high demand and lousy forecasting by industry analysts. Other analysts also believe Intel's efforts to become a networking powerhouse have contributed to its taking its eye off the ball.

Market Impact

Given all the apparent missteps Intel has made in the last year, we expected something like this to happen - we just expected it sooner. Intel still has 80+% of the market, to AMD's 17%, but AMD's string of successes has got to be making Intel CEO Craig Barrett a little nervous. Reorganizations typically mean that a company spends six to nine months trying to get their "ducks in a row" - getting everyone marching in the same direction - and we do not expect Intel to be any different. Advanced Micro Devices CEO Jerry Sanders must be loving this, but we do not expect him (nor AMD) to rest.

Looking at the overall market, we do not expect this move to increase market growth. Any growth in markets that occurs will be due to external-to-Intel market forces. We expect AMD to increase their market share at Intel's expense. Market consolidation is not an issue, because there are only two players left.
SPURCE:http://www.technologyevaluation.com/research/articles/intel-reorganization-15753/