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Krzanich: Intel was slow to adapt to the ultra-mobile device market

Intel has reported a small sequential gain in revenue for the second quarter but saw quarterly sales decline for two of its main business units from the same period a year ago.

The chip giant promised a faster go-to-market schedule for its Atom-branded products for mobile devices in an effort to improve its standing in the smartphone and tablet markets, even as new CEO Brian Krzanich also pledged to remain committed to its flagship product lines for PCs.

Intel reported second-quarter revenue of $12.8 billion (£8.4 billion), up two per cent from the second quarter of 2013, while net income fell by the same percentage sequentially to $2 billion (£1.3 billion). Intel's PC Client Group had sales amounting to $8.1 billion (£5.3 billion), down 7.5 per cent from the year-ago quarter, while the Data Center Group ($2.7 billion (£1.8 billion)) was flat year-over-year and the Other Intel Architecture Group ($942 million (£621 million)) was down 15 per cent.

Krzanich, in his first earnings call with investors as CEO since taking over for Paul Otellini earlier this year, said he understood that "we've not always lived up to the standard we set for ourselves," specifically saying, "Intel was slow to adapt to the ultra-mobile device market."

He said Intel was moving to address this issue and offered some general thoughts about a major strategy overhaul he instituted upon taking over as CEO.

"We're moving into a new era with an updated list of priorities. Intel has unmatched assets in manufacturing and processor architecture and a great brand. There will always be another next big thing and it's our job to continuously scan for new trends," he said.

Krzanich said a major part of Intel's ongoing restructuring would be a "greater emphasis on Atom-based products."

"We will move Atom even faster to our leading-edge process technology," he said, adding, "This does not mean we will lessen the value of our core product lines."

Krzanich told investors that Intel's commitment to releasing products faster and pushing the envelope with cutting-edge technology, like its perceptual computing initiative, would be focused more on deeds than words.

"In general, you will likely see us making transformations in the market before we talk about them," he said.

In the second quarter, Intel lifted the curtain on a next-generation Core processor architecture for PCs and servers, code-named Haswell, as well as its new Silvermont architecture for the Atom product line.

The chip giant also confirmed this week that it has reached a deal to acquire gesture-recognition software developer Omek Interactive as part of its perceptual computing push, and several media outlets have reported that Intel is planning to roll out a major new over-the-top TV and multimedia service.

"Looking ahead, the market will continue buying a wide range of computing products," Krzanich said. "Intel Atom and Core processors and increased SOC integration will be Intel's future. We will leave no computing opportunity untapped. To embrace these opportunities, I've made it Intel's highest priority to create the best products for the fast growing ultra-mobile market segment."