UPDATE: Intel Chief: Don't Expect Action On EU Appeal Soon
09 June 2009 - 3:58AM
Dow Jones News
Intel Corp. (INTC) Chief Executive Paul Otellini said not to
expect any actions soon in relation to the European Union antitrust
ruling against the company, which Intel has vowed to appeal.
Otellini said the company is still working through the 542-page
ruling, and that the appeal process will likely take many
years.
In May, the E.U. levied a record $1.44 billion fine against the
chip giant resulting from charges made by rival Advanced Micro
Devices Inc. (AMD) that Intel was competing unfairly in the way it
sold its chips.
"Don't expect any action short-term on this," Otellini said in
an interview with Fox Business.
"The appeal process will take a number of years, I would think,"
he added.
Intel shares were recently down 1.6% to $15.61.
The impending fine wouldn't cause Intel to post a loss for 2009
should the company pay it this year, Otellini said, while
reiterating his view that the chip market will return to seasonal
demand patterns in the second half of the year after the PC market
"hit bottom" in the first quarter.
"We called the bottom of the market in February," he said.
"Everything I've seen since then resonates on that point."
While consumer spending on technology has been relatively
stronger than spending by businesses, Otellini expects that
consumer confidence will fall as more people lose their jobs. The
tech sector, though, could be helped by a return of business
spending in late 2009 or early 2010.
To help spur demand for PCs this year, both Intel and AMD are
betting on "light-and-thin" notebooks. Last year, Intel ran away
with the market for cheap, Internet-focused laptops called netbooks
with its low-cost Atom chip. AMD didn't have a competing product,
but has a bit of a head start in light-and-thin notebooks with its
Yukon chip.
The notebooks, which resemble Apple Inc.'s (AAPL) skinny MacBook
Air, are fully functional computers but use low-cost, low-power
chips and are more affordable than earlier products in the
category.
"Do you really want to carry around a big, heavy notebook
anymore?" asked Otellini. "The hottest thing on the market this
year is thin and light."
Netbooks have mostly been selling for around $200 to $400,
whereas light-and-thin will likely be priced in the $500-to-$800
range. The small form-factor notebooks have traditionally cost more
than $1,000, and were targeted toward business customers.
In addition to focusing on new form factors in notebooks, Intel
wants to take its Atom chip into the market for mobile phones - a
market Otellini called "critical" to Intel's continuing growth.
The company has already announced its Atom chip will be used in
a mobile Internet device, a product falling somewhere between a
netbook and a smartphone. But the goal, Otellini said, is to make
chips that can be used in devices like Apple's iPhone and Palm
Inc.'s (PALM) Pre.
"We would love to win Apple or Palm," he said, though cautioning
that Intel's current chips aren't ready for the iPhone.
Technologically, "we'll get there next year," Otellini said.
-By Jerry A. DiColo, Dow Jones Newswires; 201-938-5670;
jerry.dicolo@dowjones.com