Intel targets the tiny PC
Top salesman Sean Maloney on the next (wireless) phase of PCs, competing with AMD and selling to 14-year-olds.
NEW YORK (Fortune) -- The first thing Sean Maloney did in our conversation was acknowledge that the press has a narrow view of Intel.
"There's only one story at the moment, and it's that we've got competition," said Maloney, the company's high-energy chief sales and marketing officer. He's one of only two executive vice presidents right underneath Intel (Charts) CEO Paul Otellini.
But as we continued, it became apparent that he is almost obsessed with another story - the emerging development of a whole new type of super-mini-PC he expects will be key to Intel's growth over the next five years. This is partly because of the growing importance of emerging markets like Brazil, China and India.
Prior to this job, which Maloney took on in July, he spent five years running Intel's ill-fated communications business. The fact that it hasn't taken off (in fact Intel recently sold off much of its cell phone technology) hasn't hurt Maloney's career. But it did instill in him what seems - evidenced by his passion on the subject - a profound confidence that wireless is a - if not the - key technology on which Intel's growth will be founded. "It's a fundamental shift," he says, "Once the device is mobile it gets used even more."
"Getting competent at making radios has been a huge deal for us and a big adventure. We had errors. But the net result is that we're the largest manufacturer of radios for computers." All of that is Wi-Fi now, but Maloney says that in selling off the cellular technology Intel "doubled down on Wi-Max," which is the next generation Wi-Fi that will cover territories measured in miles rather than, as today, in feet.
"We're basically making a bet that if you can shrink the PC small enough you can reach a whole new group of people. The only question is the screen size - is it three inches or five or seven? We don't want to get trapped into deciding what the device will be. Let's let the whole consumer electronics industry play with it. We're working with a myriad of designs from every consumer electronics company you can think of.
"I have two targets. An Asian woman 18-20 - how will we get her to carry it in her handbag? And the other is a 14-year-old kid. We need to get kids using notebook computers all over the world."
He notes that LG and Samsung already sell mini-PCs that don't look like PCs. Once Sprint (Charts) starts to roll out its Wi-Max networks nationwide by the end of 2007, Maloney believes devices like that will begin to become popular in the U.S.
Though it is endlessly said that Intel is in a battle with Qualcomm (Charts), with Wi-Max pitted against Qualcomm's broadband CDMA technology for the next generation of broadband wireless devices, Maloney insists that is not the way he thinks about it. "Qualcomm's technology will be in a trillion cellphones. That's just not a business we're in."
The difference, he says, is that one technology is fundamentally designed for voice and the other for data. "I don't see them competing," he claims. (Many others, including Qualcomm do.)
"Wi-Max has won as the global standard for new-type devices that need a ton of data," he continues, noting that Motorola (Charts), Nokia (Charts), Samsung, and - for infrastructure - Nortel, have all made big bets on Wi-Max. "All the big guns but Qualcomm," he adds smugly.
What struck me was how resolutely focused Maloney is on the inevitability of this diminutive device he sees coming for all of us, even though almost none of us now use such a thing. He doesn't see the PC converging with the cellphone. He thinks cellphones and these mobile mini-notebooks will coexist in equally large numbers.
"Even though this industry is intricate and difficult," Maloney goes on, "in some ways it's really very simple - we base ourselves on Moore's law [the notion that the capability of computer chips roughly doubles every 18 months as cost and size stay constant]. We've got an 11-nanometer transistor working in the lab. That's five generations out, so we can see what's coming."
The coming super-mini, portable, in-your-pocket PC, in the Intel view, will just be the way that such enormously powerful chips get put to use. As for that competition with AMD, it just seems to have put a fire under Intel to try to make it all happen even sooner.