Intel CEO looks to servers and notebooks to drive chip sales

Growth in processor and component chip sales will continue to come from server and mobile sectors, despite the arrival of Windows Vista and other perceived upgrade pressures on desktop PC users, claims Intel chief executive Paul Otellini.

The head of the microprocessor maker expects notebook computers to account for half of all PCs shipped in the next few years. He also expects to see strong growth in server sales.

"From a global perspective it's been a good year but not a great year for IT," he told attendees at the Gartner's Symposium conference in Orlando, Florida. "We came off of three very good years where the growth in the PC industry was high double digit teens. This year it's in the 8-9 per cent range."

Server sales are growing a pace, according to Otellini, as companies replace legacy systems but also "scale out" their data centres in order to handle growing data processing demands. Intel itself is bringing new machines online "5,000 or 10,000 at a clip". "The data we are all going to have to deal with in servers is going to go up by a factor of 10 in the next five years," he said.

Growth in desktop PC sales, however, is coming mostly from the emerging markets, Otellini said. "In the mature markets we see a very significant shift from desktops to notebooks. In the US notebooks are over 50 per cent of retail sales."

Developments such as better battery life and better connectivity, as well as lower price tags, are driving notebook sales. Otellini demonstrated a prototype of a low-cost laptop PC for school children with a bill of materials cost of around $250 (140). He added that businesses such as Intel had switched totally to notebooks because of the productivity gains it brings.

"The shift to mobility is inexorable. In my mind there is the no reason people wouldn't want a mobile computer, all things being equal. As the price differential continues to shrink that makes it a lot easier, as does devices getting smaller and more portable with all day batteries."

The challenge this poses for IT professionals, however, is managing all these devices. Otellini conceded that Intel's emphasis on promoting its "Core" microprocessor brand had limited resources for promoting initiatives such as vPro, which aim to make PCs and notebooks easier to manage.

"It offers remote diagnostics and repair, which people do today but vPro allows you to recover the machine when it is down in blue screen mode," said Otellini.