Intel CEO Ottelini to step down in May

Intel Corp said on Monday that Chief Executive Officer Paul Ottelini will retire in May, stepping down from the world's leading chipmaker at time when it is grappling with weak PC demand as the industry shifts toward mobile computing.

Intel's board said it would consider internal and external candidates for the CEO position and it expected the "leadership transition" to last six months.

Intel, whose processors are dominant in personal computers, has been slow expand into the fast-growing mobile industry where Apple's iPads and iPhones, and other popular devices, are made using competing technology from Britain's ARM Holdings.

"We all know that everyone is using smartphones and tablets now. It's the era of Intel versus ARM, so it may be good to come in with some fresh blood and a new perspective," Evercore analyst Patrick Wang said.

The company said it would promote three executives to executive vice presidents. They are Renee James, who is in charge of Intel software; Brian Krzanich, who is chief operating officer and oversees manufacturing; and Stacy Smith, the chief financial officer and director of corporate strategy.

Smith, well-known by Wall Street, and Krzanich have in the past been viewed as potential future CEOs.

"There a comfort level with Stacy (Smith)," said Williams Financial analyst Cody Acree. "I think we'd get more continuity with the current roadmap and direction than you would with anybody else."

Ottelini, 62, was the company's fifth CEO, stepping into the post in the second quarter of 2005. The company has an internal rule of retiring its CEOs at age 65.

Intel was accustomed to being king of the PC market, particularly through its historic "Wintel" alliance with Microsoft Corp, which led to breathtakingly high profit margins and an 80 percent market share.

But in the cut-throat mobile world, Intel is struggling. Its market share is less than 1 percent of smartphones, trailing Qualcomm Inc, Samsung Electronics Co Ltd, ARM Holdings Plc and others.

That leads some investors, who are already concerned about a lackluster global economy, to ask if Intel's invincibility has come to an end and whether the company's potential for profit and revenue growth may come back down to earth.

Intel's shares gained about 5 cents to $20.24 in early Nasdaq trading.

(Reporting by Noel Randewich in San Francisco, Liana B. Baker in New York; Editing by Lisa Von Ahn and Maureen Bavdek)