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With Intel's Otellini out next month, no CEO replacement yet

New chief executive will need to tackle the mobile market, and face sluggish PC sales

April 16, 2013 06:23 PM ET

Computerworld - Just a month before Paul Otellini steps down as CEO of Intel, the company does not yet have a replacement.

One of the biggest pieces of news out of Intel's first-quarter earnings call late on Tuesday was that there was no new information about who will take over the CEO seat once Otellini steps down.

"The selection process is on track," Mark Henninger, director of Investor Relations for Intel, said during the call. "The board's goal is to name a successor by the time Paul retires."

Henninger then made it clear that would not happen on the earnings call.

"As you know, I have a month left at Intel and this will be my last call with you," Otellini said on Tuesday, noting that he has been on about 80 earnings calls in his time with the company. "I came to Intel nearly 40 years ago, eager to join a team of smart, creative engineers... some of the greatest minds in technology... Over the past few months, I've been visiting Intel sites in the U.S. and around the world. That creativity and drive has never been higher."

Otellini praised the company's manufacturing breakthroughs, the creation of its low-power Atom processor, it's tick-tock model and its work in materials science.

Last November, Intel announced that Otellini will retire in May. At the time, Intel's board of directors said it was looking both inside and outside the company for Otellini's replacement.

However, Intel, which has had just five CEOs in its 45-year history, has always promoted from within.

"At this point, they should have their short list whittled down to just a few names," said Dan Olds, an analyst with The Gabriel Consulting Group. "I don't necessarily think that not naming Otellini's successor today should make Intel fans, or the rest of the industry, nervous. But time is getting short, and it's important for Intel to settle the succession issue."

The high-tech industry, as well as Wall Street, both are looking to get a take on the new CEO.

Whoever gets the job is looking at a lot of work ahead.

Intel may be the biggest chip maker in the world with a strong financial standing, but it's also dealing with heady competition from ARM, a PC industry in decline, and a need to move much faster than it has into the mobile industry.

Talk among industry analysts has at least three Intel insiders on the list of potential CEOs: Renee James, head of Intel's software business; Brian Krzanich, chief operating officer and head of worldwide manufacturing; and Stacy Smith, chief financial officer and director of corporate strategy

Just as the company announced Otellini's retirement plans, it also reported that all three had been promoted to the position of executive vice president.

David Perlmutter, a general manager with the Intel Architecture Group and Chief Product Officer, and Justin Rattner, Intel's CTO and head of Intel Labs, also are considered to be among the running.

"The choice of a new CEO is always critical, but maybe even more so for Intel right now," said Olds. "They're facing major competitive challenges in every segment of their business, so the new CEO will have his or her hands full charting the right course for the company."

covers the Internet and Web 2.0, emerging technologies, and desktop and laptop chips for Computerworld. Follow Sharon on Twitter at Twitter @sgaudin, on or subscribe to Sharon's RSS feed Gaudin RSS. Her email address is sgaudin@computerworld.com.

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