Intel’s chips have become even more dominant in the PC computer market during Otellini’s tenure, helping to boost the company’s annual revenue from $39 billion in 2005 to $54 billion last year. Besides supplying Windows-powered PCs, Otellini also scored a coup in 2006 when he convinced Apple to start using Intel chips in Mac computers instead of IBM Corp.’s microprocessors.
But Apple’s pioneering work in smartphones and tablet computers also muddled Intel’s future. Both the iPhone and iPad inspired a wave of sophisticated handheld devices that are undercutting demand for desktop and laptop machines that house Intel processors.
Most tablets rely on a technology licensed from British chip designer ARM Holdings Plc. Even Microsoft has tweaked the latest version of the Windows operating system so it works on ARM chips.
Other chip makers such as Qualcomm Inc. have developed less expensive microprocessors that have eclipsed Intel in the smartphone market. Qualcomm’s inroads in the mobile market are a key reason why its stock has soared by more than 70 percent while Otellini was running Intel.
The contrasting performances of the two companies’ stocks enabled Qualcomm to surpass Intel as the world’s most valuable chip maker. Qualcomm’s market value now stands at about $106 billion versus $100 billion for Intel.
Even though its stock under Otellini has lagged the rest of the market, Intel’s ongoing prosperity has enabled the company to reward shareholders in other ways. Intel has paid stock dividends totaling $23.5 billion under Otellini as its quarterly payments rose 8 cents per share in 2005 to 22.5 cents per share currently.