From the Top: Intel's Philip Cronin - The future of the PC and local builders

From the Top: Intel's Philip Cronin - The future of the PC and local builders

In the third part of this in-depth interview, Intel's Philip Cronin argues the smart will survive as the local builder channel changes

The move to mobility puts question marks against the future of the desktop PC and the local builder channel. In the third part of an in-depth interview with ARN's Brian Corrigan, Intel's Philip Cronin argues change is positive and the smart will survive.

What does the move to an increasingly mobile market mean for the future of the humble PC?

All of the indicators from analysts at Gartner and IDC indicate that the Australian market is heading towards 80 per cent mobility by 2011. But even that means a fifth of the market will still be buying desktops and I think there will be a segment that stays there. High-end workstations with big screens and more power could be a piece of it, or people carrying out simple administrative tasks that don't need mobility.

But most consumers and business users will continue on this drive to notebooks. It's not a bad thing because it isn't as if the market's going to get smaller. The opportunity is huge; the challenge for everybody will be to establish where they play in this changing environment. From the logistics side, it will be easier for distributors to move product so they will get a lot of efficiencies. As a reseller, it's easier to commission, to install, to support and it adds things like physical security with locks and biometrics. Whenever a market changes and parts of it cease to be so exciting, there's a whole raft of other stuff that gets going.

Intel launched its Common Building Blocks program in an attempt to protect the local system builder communities from losing share to the multinationals as the market becomes more mobile. Has it been successful?

It's a work in progress. One of the problems we face is that people think because we put something into play that it will change things overnight. That hasn't proven to be the case but it doesn't mean we will stop. It doesn't mean we should stop; it simply means we should focus our efforts on where we can be successful.

I believe there will be many players that evolve their offerings to include their own products alongside branded systems. Over the top of that, they will also offer things like managed services and security because they understand the changing environment and the need to offer customers choice.

Mobility has emerged as a massive threat to local system builders. How can they survive?

It is a threat in some respects but I would argue it presents an opportunity to evolve and ASI Solutions is a classic example. If you ask what they were doing five or 10 years ago, and look what they are doing today, it's a very different company. They've got VoIP, storage and a security story to tell but they've still got their PC building business and make some of their own notebooks.

Anybody in that traditional [system builder] area will and should evolve. Some will choose to get out of the business as we know it; some will choose to amend their business so they become value-added reseller of a range of products; some will concentrate on software. The one thing they all have in common is they are good business people.

Where do you see whitebox bottoming out?

I don't know and I'm not overly concerned. There are enough guys still building notebooks and they will continue to do it well. There will be a natural market share that evolves and I don't want to be the guy that's trying to fight that. I want to be the guy that helps them to do whatever they need to do as they sell their own brand or resell another. There are enough brands to choose from. At the end of all this people are integrating a system, whether they are working for a major integrator such as Commander or running their own regional reseller.

Our challenge is to continue to build product - we have the 45-nanometre technology coming out at the end of the year; we have already shipped a million Quad-Core units; Core 2 Duo has established itself faster than Pentium did in the minds of consumers and business; you add vPro to manage those systems; we are doing virtualisation stuff on the server side; we have a business looking at professional solutions for datacentres of the future; we are building product that is lead-free on the manufacturing side and down to about 40 per cent of power consumption on the user side. Going across everything from A-Z is one of the beauties of our job.

What do you think about the number of vendors in the local notebook market? Is it big enough to support them all?

I would think Australia can support more. Again it comes back to the premise that the market will grow because of the kick-start we get from broadband uptake. I think the more choice people can have the better. It will be driven by segmentation so some players will place a bet and get involved in the ultra-mobiles, others will do rugged models and vertical industries will also play a role.

  • For Part 1 of this interview click here
  • For Part 2 of this interview click here
  • For Part 4 of this interview click here

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