Intel Knows It's No Longer Inside

But there's life after the PC - and maybe even after mobile. JL

Sam Byford reports in The Verge:

It's finally made peace with the fact that it may no longer be inside the technology you care about the most. Instead, it might just help give you a better experience with the parts that actually are inside — and at least in the short term, there's probably no one better placed to do so.
You don't hear "Intel Inside" too often these days.

Instead, the legend adorning the Taipei International Convention Center stage today ahead of Intel's Computex keynote was "Experience what's inside." The newer slogan has been kicking around for a while, but its deployment betrays a shift in Intel's priorities, and the acceptance of a harsh reality — Intel won't be inside the most important device in your life, and the devices it will be inside will be less relevant.
Intel recently announced a restructuring of its business along with 12,000 layoffs; CEO Brian Krzanich said the company's focus was on moving to the cloud, with data centers and the Internet of Things considered primary growth drivers. And much of the Computex keynote was devoted to laying out that vision, with sections on IoT and 5G networks bookending its plans for PC innovation.

Navin Shenoy, Intel's new general manager of client computing — replacing recently departed Computex regular Kirk Skaugen — was less than convincing on that last point. While citing figures that 2-in-1 laptops showed 40 percent growth in 2015; demonstrating devices like HP's Spectre 13 and Lenovo's BB-8-like IdeaCentre 610S; and declaring that Intel is "unwavering in its support" for the platform, the company had little of note to announce. The new 10-core Broadwell-E processors are extremely niche, the upcoming Kaby Lake generation is strictly evolutionary, and the optimistic description of the PC used in an onstage VR dem”o — declaring "It has a Core i7!" without any mention of the GPU — was a real stretch. Most VR-capable PCs will run on Intel CPUs, of course, but the CPU will hardly be the reason you buy or build a new machine.

The recent interest in high-end PC computing sparked by the advent of VR is, of course, largely about the GPU. And no one knows that more than Nvidia CEO Jen-Hsun Huang (above), who appeared supremely confident in a meeting with reporters on Monday morning. Riding a wave of hype created by the launch of the GTX 1080 GPU, Huang presented Nvidia as a company whose grasp on the graphics market will give it leadership in areas like self-driving cars and machine learning that can make use of GPU computation, as well as the straightforward, graphics-hungry VR platforms. Nvidia's mission is simple: Huang cares about cutting-edge performance and leveraging it in any area where it will be difficult for others to compete. Mobile is not one of those areas, he admitted, which is why Nvidia "isn't really interested" in the space any more.
Intel has also demonstrated an ability to admit when the game's up, as evidenced by its own recent withdrawal from the smartphone market; But next to Nvidia, the company's game plan seems more muddled, and Krzanich is taking a risk by betting heavily on the cloud. Intel's business model for decades has been based on the idea that you'd need powerful components right in front of you, and that you'd want to buy them from Intel. That's still a concept that works for Intel's data center operations, and even then PCs are still very much at the heart of Intel's business, making up more than half its revenue. The company makes billions of dollars of profit each quarter. But its gamble on the cloud is not a straightforward one, because the market for connected IoT devices is still so nascent. And as the PC market continues to slow, with additional fears over whether chip development can keep up with Moore's Law, Intel's new businesses will need to pick up the pace.
Intel believes in a "virtuous cycle of growth"
On stage today, Intel's Shenoy explained how that might play out, describing a "virtuous cycle of growth" where data centers power devices that proliferate, creating the need for more data centers, and so on. Intel's focus on the cloud, then, is a way for the company to finally gain some level of mobile relevance. Granted, you won't be carrying its CPUs around with you in your most important computer, but if Intel's vision comes to pass then that device — the smartphone — will constantly be communicating with Intel-powered data centers and ancillary devices like drones, robots, and so on.

Intel believes it can accelerate its own growth by making devices "smarter and more connected." An example of this is integrating the company's RealSense 3D camera into drones, helping them navigate obstacles with a higher degree of automation. Another is the new Xeon E3 1500 V5 server processor announced today, which is focused around video streaming and can serve two 4K or 15 1080p feeds at once.
As it did in mobile, Intel will face significant competition from ARM in the Internet of Things market; companies like Qualcomm are already shipping chips aimed at low-power and low-cost devices. ARM-based designs may also pose a threat to Intel's server business long-term. And it's far from clear that any of these initiatives will help the company maintain consumer relevance, much less return to the glory days when Intel's public-facing advancements like the Pentium range were among the most important factors in the progression of technology.
But Intel seems to be aware of all of this. It's finally made peace with the fact that it may no longer be inside the technology you care about the most. Instead, it might just help give you a better experience with the parts that actually are inside — and at least in the short term, there's probably no one better placed to do so.