CNET News Video
Intel CFO: 'We're seeing a reinvention of the PC'Stacy Smith, finance chief of the world's biggest chipmaker, sits down with CNET's Ben Fox Rubin to discuss PCs, mobile and wearables.
[MUSIC] This is Ben Ruben with CNET, I'm here with Intel's chief financial officer, Stacey Smith, Stacey, thanks for being here. My pleasure. So Intel, the worlds biggest chips company is coming off with a really strong 2014. Revenue was the highest it's ever been. Stock went up 40% and the PC business which was down for a couple of years actually rebounded last year. So I wanted to start off kind of as a retrospective. What worked in 2014 in PCs, how did you guys manage the turn around. I'll just start by going a little broader. It was more then PCs. The company grew but it was broad based growth. We saw really robust growth in the data center, so that business was up 18% year end year, and that's become a very large business for us. And we saw fast growth rates in the internet [UNKNOWN] business. Specific to the pc business, what we're seeing is, we're seeing a reinvention of the personal computer. We're creating these very sleek cool devices that people want. We're seeing, you know, at least that market's stabilizing, b, based on all the innovations that's going into it. Price points coming down so all of that led to a pc market where we saw some unit growth, we saw some revenue growth. So, how do you guys keep that going this year? Our baseline forecast for 2015 is a pc market that's relatively flat [UNKNOWN], but we still expect that the company. Will grow in the mid single digits, and that's based on growth in data centering and other things. We're gonna see a lot of innovation in the marketplace. And what that means to a consumer is that they're gonna be able to get devices that have extraordinary performance, even longer battery life. There's been a lot of talk over the last couple of years about this concept of the post PC era. In Intel, do you guys buy that, and if you do where does that leave a company like yours? The post PC era has a market that's circa three hundred million units with you know more innovation happening in it then I've seen at any time in my career in the industry. Today you just have this explosion of devices, you can have an all in one with a touch screen that you use in your kitchen. You can have a, a convertible high-performance PC that, you know, maybe has a detachable screen that you use when you're on the road. You may have a tablet. You're likely to have a smartphone, as well. So you, you had these multiple devices that compute and connect. What Intel is really well-positioned to do is to be the company that provides the technology that's inside all of those different devices. You bring up the idea of diversifying with mobile. That's an area that you guys are trying to diversify in to. But so far, and I'm trying to be nice here, it's been a bit of a mess so far. In 2014, you guys lost $4.2 billion in mobile. I, is there a point where, that becomes too painful, we're not going to be doing this business anymore? Well, we, we expect that this year we'll make a substantial improvement in the profitability of that segment. We won't get it to profitable, but we'll make a substantial improvement in profitability. But if you zoom out, and our, our strategy is to participate across this wide range of de, of devices. Ranging from a, you know, high-end PC, all the way down to a phone. And, we think that we're one of the only companies that has, you know, our own factories, all of the different kinds of intellectual property blocks that go into those devices. At CES, Intel came out with a, a tiny, tiny chip called the Curie, which is for wearables. How, how big of a market do you think that's gonna be? For intel. No idea. yea, yea, I think there's probably two mega trends that have been playing out over the last five years and I think will be the, the dominate forces over the next five years. One is that technology is becoming more personal. And the second is, that technology is becoming more mobile, so it's becoming smaller with longer battery lives. I think Curie is a great proof-point of how that can evolve. And, you know, what that was, was, in essence, a fully capable computer that can connect that was in the size of a button. And so you start thinking about the kinds of applications that has. There's a lot of different places that that can play. What we see in that segment of the market, the internet of things is that it's a very chaotic segment. There's lots of innovation going on. it's, if, if anybody tells you they know what's going to be the, the, the winner three years from now, they're making it up, because nobody knows. And so, we want to be there early, we want to be there early with great technology. And then. Let this delightful chaos play out, and, kinda see what evolves from there. Great. Stacy, thanks so much for answering my questions. This is Ben Rubin with CNet, thanks very much for watching. [MUSIC]