Intel chief: Recession can't halt innovation

By Caroline McCarthy, CNET News.com
Monday, November 10, 2008 11:23 AM

There is a light at the end of the financial tunnel, Intel president and chief executive Paul Otellini said onstage at the Web 2.0 Summit on Thursday morning.

"All the smart people I've talked to in this area suggest that the U.S. is in a two- to three-quarter recession," Otellini said, although he added that the current economic slowdown is "the deepest one I've seen in my lifetime" and predicted that morale may stay low for longer because unemployment may remain high even after growth has resumed.

The point of his talk, however, was to focus on the innovation that will still be on the way regardless of how far the markets fall. "I like coming here," Otellini said of the Web 2.0 Summit. "It's a respite from...watching the stock market crash every day, and [a chance to] think about what the future is going to hold for us."

Otellini showed off two projects that Intel is working on internally.

One of them is a business-networking software product that Otellini said will make a big difference to how employees of large corporations socialize and network with one another, learn more about the company and collaborate on products.

In a demonstration of the prototype, Otellini suggested it was something that could eventually make a difference for many companies.

"There's an interesting thing about businesses and software," he said. "They pay for it. If you're looking for a business model that might be interesting, finding a way to capture the needs of enterprises...is a pretty good way of making a living."

The other demonstration was of an unnamed handheld gadget so early in its development that Otellini admitted it had to be powered by computers backstage.

Otellini showed how the always-connected device, which resembles an iPhone and which Intel has shown off a few times before, could use a "smart" camera to translate Chinese text into English almost instantly and gain product information and reviews when hovering over a toy for sale.

No release date was given for the gadget.

Intel has had its share of problems recently. Otellini admitted that the gadget would require "a really good, first-class broadband infrastructure around the world". However, critics have been skeptical of Intel's reliance on WiMax's success in its projections for the future.

Additionally, Intel supplies the chips for Apple's desktop and laptop machines, a landmark partnership that has run for several years. However, the relationship became strained recently when executives portrayed Apple's iPhone as a device that suffers from not having an Intel chip in place.

Otellini generally avoided talking about the incident, saying that he sees huge potential in the iPhone, as well as other mobile technologies in general. Beyond a few ambiguous words about the iPhone, he kept silent on the subject of Apple.

In conclusion, Web 2.0 Summit co-host John Battelle of Federated Media brought up a quotation from former Intel chairman and chief executive Andy Grove: "Only the paranoid survive." Battelle asked Otellini to reflect on the statement and what he was afraid of.

"[Grove] said that to reflect, to some extent, the risk characteristic of our business, of our industry," Otellini said. "There's always a new technology that's potentially disruptive to your entire business model. What he was worried about was something coming up to disrupt it...I try to live by that."

This article was first published as a blog on CNET News.com.


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