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Intel CEO looks outside with PC peripherals

Craig Barrett says the best way to boost PC sales is to sell peripherals such as digital cameras and audio players.

LAS VEGAS--The best way to sell more PCs, according to Intel CEO Craig Barrett, is to sell a lot of stuff besides PCs.

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Craig Barrett focuses on electronics
Craig Barrett, CEO, Intel
That was the message the leader of the chip giant delivered in his opening keynote address at the Consumer Electronics Show here and during an interview with CNET News.com before his speech.

Formally unveiling a new portable digital audio player and showing prototypes of several other electronics devices, including a wireless Web tablet and a wireless chat device, Barrett said the common denominator is that they enhance and expand the PC.

"It's really a big, digital universe," Barrett said in his address, "and if you look at the center of that universe, it's the PC."

For example, Intel's new Pocket Concert audio player, first reported by News.com, comes with 128MB of non-removable flash memory, requiring a fairly well-equipped PC to manage music files. "The PC is there for encoding the music tracks...and for uploading and organizing and storing the content for these devices," Barrett said.

And Intel's Pocket PC Camera, introduced late last year, promotes the use of hardware-intensive video and photo-editing software--precisely the kind of capabilities built into the chip giant's new Pentium 4 line of processors.

"The Pentium 4 was not created to run (Microsoft) Word faster or do Excel spreadsheets...it was created to run rich, multimedia content faster," Barrett told News.com. "Whether that comes over the Internet, through editing digital video, through interaction with a peripheral device like this...you want to...have a high-performance processor to handle those kind of demands.

"Obviously our intent is to move the whole computer business forward. All of these things translate into processing power."

The low-resolution Intel camera and the audio player are not cutting-edge products, but Barrett said the company has no desire to have a range of devices in such categories. Instead, the chip giant will offer solid, middle-of-the-road approaches to PC add-ons that, combined with Intel's name recognition, could attract masses of new consumers for activities such as digital imaging.

"I look more at the concept of new uses, new users in bulk," he told News.com. "You're really interested in the markets that are tens of millions of users. You're not going to target the professional user--you're going to be targeting the hobbyist, the home marketplace."

Along with the camera and audio player, Barrett showed prototypes of several Internet appliances that connect wirelessly with a PC. The small Chatpad runs instant messaging software, while an as-yet unnamed Web tablet uses a larger screen to display Web content and access PC functions such as printing. Both differ from the current crop of Internet appliances--none of which have gained significant market acceptance--by relying on an existing PC's Internet connection rather than requiring a separate hook-up.

Read more breaking CES news here While the Web devices appeared to be fairly far along in the development cycle, Barrett also showed a more experimental prototype of a home "media center" appliance that would juggle digital photos, DVD and downloaded movies, digital audio files and other content for display through various devices connected to a home network.

"The message we're trying to get across here is that the personal computer is really at the center of all these advances," Barrett said. "We're really trying to put more processing power into these PCs for a purpose."

"The value of the PC increases exponentially as we have more functionality attached to it."

It's not entirely coincidence, either, that these PC-promoting devices are coming out at a time when domestic PC sales have hit a lull.

"Clearly the U.S. rate of growth (in PC sales) is lower," Paul Otellini, general manager of the Intel Architecture Group, said in an interview with News.com. "I happen to think that's partly because we haven't offered the compelling set of features and functions that's going to drive the next wave of buying activity."

Barrett said forays beyond the chip business are nothing new for Intel--they've been selling home networking kits and cameras for several years--but acknowledged his first-ever appearance at CES shows a deeper interest in the market.

As did the normally reserved CEO's on-stage antics with experimental theater outfit the Blue Man Group. Barrett, never known as the high-tech equivalent of the "Crododile Hunter," allowed the painted performers to shove a digital camera down his throat, smear a Jell-O-like substance on his head and shove him into a small, wooden box.

"The only thing that got me inside that box is that they told me the last person in the U.S. who wanted to buy a PC was in there," he quipped.