Published: July 28, 2004 in Knowledge@Wharton Think Intel, and you probably think of the microprocessor chips that serve as the brains of personal computers. But the company over the years quietly has been expanding its horizons well beyond chips for laptop and desktop computers. It's already developed a major business in chips for server computers – powerful machines used by corporations and governments – and also offers to sell nearly complete servers. More recently, the Santa Clara, Calif.-based company has taken steps towards a similar strategy in the arena of data storage equipment. In addition, Intel has set its sights on wireless communications and is angling to play a key role in designing products for the "digital home."

 

Indeed, Intel's Chief Technology Officer, Patrick Gelsinger, outlined a grand ambition for the company in a speech last fall. "Before I retire from Intel, I want a piece of Intel technology touching every human on earth, every minute of every day, in every aspect of their lifestyle," Gelsinger said.

 

This strategy, which might be dubbed "Intel Everywhere," has its risks. They include the prospect that consumers will chafe against computer-based products in their living rooms, and the possibility that Intel will step on partners' toes along the way. In addition, Intel may face renewed competition from longtime rival Advanced Micro Devices.

 

On the other hand, observers suggest Intel is wisely pursuing new opportunities. Strong growth rates in the traditional PC arena have slowed down, and the semiconductor industry's recent momentum has peaked, according to a report this week from investment firm Merrill Lynch. Merrill Lynch downgraded Intel and other chip stocks from "buy" to "neutral", and cut its revenue forecast for annual growth in the semiconductor sector in 2005 from 16% to 6%.

 

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