Intel CEO Paul Otellini surprises board, to retire in May - Business Today

Intel CEO Paul Otellini dropped a bombshell on the company's board of directors last week, telling them in private that he plans to retire from the world's largest maker of microprocessors in May.

Otellini's move comes at a time when Intel faces a shaky economy and a mobile gadget craze that is eating away at demand for its PC chips - and it gives the company just six months to find a new leader.

Intel's board expected the 62-year-old Otellini to remain chief executive until the company's customary retirement age of 65. The company announced his impending departure on Monday.

"The decision was entirely Paul's," said Intel spokesman Paul Bergevin. "The board accepted his decision with regret."

Otellini will be ending a nearly 40-year career with Intel, including an eight-year stint as CEO by the time he leaves. He joined the California company after graduating from the nearby University of California at Berkeley and worked his way up the ranks before succeeding Craig Barrett as CEO in May 2005.

"It's time to move on and transfer Intel's helm to a new generation of leadership," Otellini said in a statement.

In another statement, Intel Chairman Andy Bryant praised Otellini for leading the company through "challenging times and market transitions ."

Intel's board plans to consider candidates inside and outside the company as it searches for Otellini's successor. Otellini will be involved in the search.

Otellini and the four other men who have been Intel's CEO during the company's 45-year history have all been promoted from within. The company's board is believed to be leaning in that direction again.

Intel identified the leading internal candidates on Monday by anointing three of Otellini's current lieutenants as executive vice presidents. They are: Renee James, head of Intel's software business; Brian Krzanich, chief operating officer and head of worldwide manufacturing; and Stacy Smith, chief financial officer and director of corporate strategy.

Although Otellini is generally well regarded, he has faced criticism for initially underestimating the impact that smartphones and tablet computers would have on the personal computer market.

It was a pivotal change that also confounded Microsoft CEO Steve Ballmer, whose software company makes the Windows operating system that runs most of the PCs relying on Intel's chips.

The fates of Intel and Microsoft have been so tightly wound for the past 30 years that computers using a combination of their chips and software are famously known as "Wintel" machines.

Now, much of the technology industry is questioning whether Intel and Microsoft can catch up in the mobile market to ensure their products remain as essential - and profitable - in the future as they have been in the past three decades.

According to Forrester Research, this year, 330 million PCs are estimated to be sold worldwide compared with 665 million smartphones and just over 100 million tablets.