At Intel's offices in Austin, visitors are welcomed by security, then pass through yet another gauntlet of guards and buffers as they make their way past a set of stout metal doors into the facility's fourth-floor labs.
Once inside, they find a chaotic tangle of circuit boards and wires and the animated chatter of engineers huddling around computers and workbenches. At one end of the room a mysterious-looking box about the size of a refrigerator conceals a project so top-secret that the engineers won't tell you its code name at first; later, one lets it slip: Medfield.
What the team in Austin - and their bosses at Intel's headquarters in Santa Clara, Calif. - will disclose is that the microprocessor they're testing inside that black box is the culmination of a decade-long effort to push the world's leading supplier of brawny, energy-hungry chips for enterprise computers and PCs into an important new market: portable devices.
The march started with the development of Centrino, a low-power Wi-Fi-enabled chip launched in 2003 that made laptops as functional as desktop computers. Last year Intel (INTC, Fortune 500) followed up with Atom, a super-low-power processor that is fueling the nascent market for so-called netbooks, those clutch-sized, bare-bones computers such as the HP Mini 1000 and Acer's Aspire One line.
For its next act, Intel is getting ready to launch an even lower-power "system on a chip" (silicon lingo for a single circuit that contains all the components of a computer), code-named "Moorestown," that marries the low-power Atom processor with graphics processors, a memory controller, and other circuitry - a potent combination of technologies that has the potential to propel Intel into businesses that have long eluded the chipmaker: consumer electronics and wireless gadgets.
Succeeding in this new market is critical for $38-billion-a-year Intel, which, like the rest of the industry, is seeing a slowdown in PC sales. Partly as a result of sluggish revenue in its main business, the company's stock has been hit badly (down 31% in the past 12 months, underperforming Nasdaq slightly), and in the fourth quarter Intel reported its first loss in 21 years.
CEO Paul Otellini says he's confident that Intel can conquer consumer electronics, noting that such devices are increasingly becoming more like computers, something Intel knows intimately. "All consumer electronics - and I mean all - are aimed at bringing the Internet into devices," he says. Indeed, Otellini optimistically predicts that Moorestown will spawn a new category of handheld devices, much the way Atom seeded the netbook business.
Intel already pulls in $2 billion a year in revenue from "embedded" chips - processors installed in medical devices, cars, and other machines. Otellini believes the next generation of Intel chips, starting with Medfield, eventually will populate all electronics, from wireless phones to MP3 players to heart monitors and household appliances.
But the shift Otellini is gearing Intel to make is fraught with major challenges. The big dog in computers, Intel finds itself the underdog in consumer electronics and phones - a decade ago it tried to make a chip for small devices and failed miserably. And Intel's aggressive push into portable products threatens to upend its driven culture, which has focused on churning out high-performance chips, and its earnings statement. Instead of selling tens of millions of high-performance chips at, say, $100 a pop, Intel has to try to sell hundreds of millions of low-power pro
Once inside, they find a chaotic tangle of circuit boards and wires and the animated chatter of engineers huddling around computers and workbenches. At one end of the room a mysterious-looking box about the size of a refrigerator conceals a project so top-secret that the engineers won't tell you its code name at first; later, one lets it slip: Medfield.
What the team in Austin - and their bosses at Intel's headquarters in Santa Clara, Calif. - will disclose is that the microprocessor they're testing inside that black box is the culmination of a decade-long effort to push the world's leading supplier of brawny, energy-hungry chips for enterprise computers and PCs into an important new market: portable devices.
The march started with the development of Centrino, a low-power Wi-Fi-enabled chip launched in 2003 that made laptops as functional as desktop computers. Last year Intel (INTC, Fortune 500) followed up with Atom, a super-low-power processor that is fueling the nascent market for so-called netbooks, those clutch-sized, bare-bones computers such as the HP Mini 1000 and Acer's Aspire One line.
For its next act, Intel is getting ready to launch an even lower-power "system on a chip" (silicon lingo for a single circuit that contains all the components of a computer), code-named "Moorestown," that marries the low-power Atom processor with graphics processors, a memory controller, and other circuitry - a potent combination of technologies that has the potential to propel Intel into businesses that have long eluded the chipmaker: consumer electronics and wireless gadgets.
Succeeding in this new market is critical for $38-billion-a-year Intel, which, like the rest of the industry, is seeing a slowdown in PC sales. Partly as a result of sluggish revenue in its main business, the company's stock has been hit badly (down 31% in the past 12 months, underperforming Nasdaq slightly), and in the fourth quarter Intel reported its first loss in 21 years.
CEO Paul Otellini says he's confident that Intel can conquer consumer electronics, noting that such devices are increasingly becoming more like computers, something Intel knows intimately. "All consumer electronics - and I mean all - are aimed at bringing the Internet into devices," he says. Indeed, Otellini optimistically predicts that Moorestown will spawn a new category of handheld devices, much the way Atom seeded the netbook business.
Intel already pulls in $2 billion a year in revenue from "embedded" chips - processors installed in medical devices, cars, and other machines. Otellini believes the next generation of Intel chips, starting with Medfield, eventually will populate all electronics, from wireless phones to MP3 players to heart monitors and household appliances.
But the shift Otellini is gearing Intel to make is fraught with major challenges. The big dog in computers, Intel finds itself the underdog in consumer electronics and phones - a decade ago it tried to make a chip for small devices and failed miserably. And Intel's aggressive push into portable products threatens to upend its driven culture, which has focused on churning out high-performance chips, and its earnings statement. Instead of selling tens of millions of high-performance chips at, say, $100 a pop, Intel has to try to sell hundreds of millions of low-power pro
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