CIOs continue to slowly upgrade client PCs to Windows 7, Otellini said. Sandy Bridge processors could provide a spark to the refresh cycle in the first calendar quarter of next year, Otellini said. The chip is highly integrated and brings better application, security and graphics performance to PCs, he said.
However, the overall PC market will continue to grow at a steady rate of about 12 percent to 18 percent next year, Otellini said. Demand for netbooks has softened, but the company is looking for a revenue boost by focusing on new areas such as tablets.
In fact, tablet shipments are already biting into PC shipments by a few million units per quarter, Otellini said. IDC has projected PC sales to reach 355 million units this year. Users will see more Intel-based tablets with Windows, Meego and Android operating systems in the coming quarters, Otellini said.
"We think tablets are exciting and we fully welcome their arrival. Apple has done a great job reinventing the category," Otellini said.
The company is developing low-power Atom chips for tablets, including a chip code-named Oak Trail, which was announced in June. Beyond strong performance, Oak Trail will offer full Windows compatibility, which is important for enterprises, Otellini said. Vendors such as Hewlett-Packard and Cisco have already announced Atom-based tablets.
Intel also said it wanted to integrate 3G (third-generation) and 4G mobile data modems inside Atom chips in order to establish a presence in the smartphone space. The technology will come from Infineon, which agreed to sell its wireless unit to Intel this quarter.