There I said it.
With Intel's (INTC) self-imposed CEO search deadline (May 16th - the date of the ASM) fast approaching, investors are preparing for the (almost) inevitable announcement that one of the internal candidates has risen to the peak of the company. This will, if nothing else, resolve uncertainty. However, if the board really wants to embrace change, and signal they are ready and willing to truly reposition the company for the decades ahead, it is hard to imagine they could do better than to attempt to appoint the long time CEO of Nvidia (NVDA) Jen-Hsun Huang.
A CEO for Intel's Traditional Markets
Filling this position is not the stuff headhunter dreams are made from. On the one hand, Intel would be desirous of a candidate who is well versed in the markets served by both their critical client (basically PC) and data (server) groups. Furthermore, they might (though this could very well be a flaw in the boards thinking) want someone who is versed not only in these markets themselves, but also in how Intel approaches them (which would obviously favor the rumored internal candidates, the COO Brian Krzanich, and Dadi Perlmutte the head of the architecture group).
There are clearly a small handful of well qualified external candidates with the market knowledge to fit this profile. While Nvidia has only recently tried to drive its GPUs into servers, Jen-Hsun clearly has a wealth of experience dealing with the PC OEM community. Moreover, though his experience is primarily with managing TSMC, he is not unfamiliar with all the issues inherent in taking silicon from design to fabs to shipping product. Depending on how much the board want their new CEO to offer a fresh take on Intel's core markets, they might consider him to be anything from barely qualified to a leading candidate as far as traditional markets are concerned.
A CEO for the Post-PC World Intel Must Thrive In
Apple hyperbole aside, the iPad is selling in larger numbers than the total PC sales of any one supplier and tablet sales in aggregate are rapidly closing on total PC sales. Moreover, there are three times as many data connected phones on earth as televisions, and smartphones have begun to outsell feature phones. These statistics are the tip of the iceberg of a sea change that is washing over the traditional PC market, especially the consumer PC market. For far too long the PC was the only real option for customers who just wanted to track their investments, surf the web, video chat with their friends and family etc. PCs offered way more functionality than the average user ever needed, and Intel profited wildly as a result. However, if tablets and smartphones have done anything truly profound, it is to democratize technology. Millions of customers are discovering their core needs are actually taken care of by mobile devices. Those stuck in the past argue about "real work," high end gaming, graphic design etc., and they are correct in that certain tasks remain best addressed by the PC. But the key point is that many users, in vast vast numbers, have been freed from the PC and are now enjoying just the functionality they need in a truly mobile form factor with the added benefit of far more battery life than the mobile PC could ever offer. This is what democracy looks like in technology.
So, back to Intel, and they have almost completely missed these markets. Their historic ties to Microsoft (MSFT) have to-date been more of a hindrance than an asset as Microsoft struggles to adapt. Wintel is fragmenting and Intel has no choice but to attack the phone and tablet markets if it wants to keep its fabs full. As such, it is almost impossible for me to imagine there are not at least some voices on the Intel board pushing for a CEO who is equipped to reposition the company through this profound transition. Here Jen-Hsun surely trumps all the internal candidates. He has been remaking Nvidia around Tegra - that is as a wireless SOC company, for the last 5 years. He has relationships not only with the PC community, but also with the phone and tablet OEMs. From a relationship and visibility standpoint, he is almost uniquely qualified to manage both the old and the new sides of the business for Intel.
The rumored external candidate that broadly fits the post-PC/mobile thesis is Sanjay Jha, former CEO of Motorola Mobility. However, it's not clear to me that (even including his Qualcomm experience) he has quite the nuts and bolts chip manufacturing experience to make Intel comfortable. That might perhaps be overlooked if he had proven a visionary at Motorola, but it's hard to make that case. He might very well be the best of the available external candidates, but best of the obviously available is not necessarily the issue. Perhaps, Intel could pair him with a career manufacturing COO (just as Apple paired Jobs with Tim Cook to cover their critical operations expertise issue) but that seems like a compromise move, rather than a brave leap.
Nor is it just a question of Rolodex superiority, Jen-Hsun has been thinking about positioning for the post PC world for a long time. While Otellini was telling his shareholders ARM was no threat, that x86 was the only road Intel would tread, and that he would not consider a foundry model, Huang was aspiring to create an Intel-free future for Nvidia by merging 64-bit ARM with Nvidia graphics. He hasn't proven he can win that fight yet, but if anyone sees the issues from both sides, it is him. Put differently, Jen-Hsun is uniquely positioned to be the pragmatist Intel needs at this juncture, and is not someone who would be wed to following in Otellini's footsteps. I would also note that he has won almost every major fight in his career to-date.
A CEO to finally Fix Intel's Graphical Woes
Despite their best efforts, Intel has long struggled to produce GPUs that are anywhere near cutting edge. Larrabee was a failure (certainly as regards its original design goals), Intel's graphics drivers have been a laughing stock in the tech community for a decade, and their mobile aspirations have to-date relied upon Imagination technologies (IMG.L). This particular weakness is becoming increasingly mission critical as the relative importance of CPUs and GPUs begins to swing toward the latter for post-PC devices. In my view, the role and importance of graphics is only going to increase and true differentiation will become more and more an issue of the GPU (or the GPU side of a converged processor) as time goes by. The stark reality is Intel shows no evidence of being able to close the gap on the learning curve to Nvidia, AMD (AMD), and Imagination etc. While Jen-Hsun could not fix this issue by himself, there is likely no single individual more qualified to lead a resurgence in graphics at Intel.
A CEO Who Doesn't Want the Job?
This is likely the problem. Intel has been a (often anti-competitive) thorn in Jen-Hsun's side for a very long time. I suspect a large part of his day-to-day energies are focused on beating Intel. Certainly from some of his public comments, Intel does appear to be his personal burning platform. Plus, as the man that built Nvidia, you might imagine he would struggle with the idea of abandoning his loyal crew to captain what has increasingly become the enemy ship. Unless of course the crew came with him… And that might be the answer, with ARM (ARMH) so dominant in mobile, the anti-competitive issues oft cited as rendering an Intel-Nvidia merger impossible are perhaps not as clear cut as they used to be. Jen-Hsun might not move to Intel, but might he be willing to lead the combined entity? It would probably be too audacious for the Intel board, the post-merger integration issues (both technical, cultural, and market vision related) would likely be horrendous, but the potential synergies in combining their respective assets are undeniable. For one, the combined company would have the scale to generate internal competition between Tegra and Atom design teams. Plus, Intel's manufacturing process advantages could help finally put AMD to the sword in the GPU business, and as the only ARM SOC team with access to said manufacturing technology Qualcomm (QCOM) et al. would be in for a difficult fight against an Intel fab'd Tegra. Will it happen? Probably not. Should it? Well, it would certainly be something well north of interesting.
Additional disclosure: I may also go long INTC calls prior to the ASM.