ARM Swaps CEO With Less Fuss Than Intel

Intel has been searching for a new CEO for six months. The leading chip designer for smartphones and other mobile devices, ARM, seemed to manage the changeover in almost no time at all.

In November, Intel’s Paul Otellini announced he would retire in June. The announcement followed a poor quarter, and kicked off a period of intense speculation about candidates from inside Intel and outside. Pat Gelsinger, CEO of EMC’s VMware, and a former longtime Intel executive has recently felt the need to issue a formal denial that his hat is in the ring.

Who’s running Intel?

Amongst the Intel vice presidents lined up for the job, we have to say we’d be genuinely thrilled if “creative vice president” Will.i.am was chosen, but we have to admit he probably had more chance of being made Pope. Intel is clearly taking this decision very seriously and with a long period of obvious but secretive deliberation.

ARM’s CEO-switch certainly looks like a big contrast, and it’s tempting to see it as an illustration of the difference between the two companies. ARM’s designs are lighter and more energy-efficient, meaning they power all the world’s smartphones and tablets. ARM CEO Warren East made a surprise announcement today that he would step down, and be replaced by current president Simon Segars (pictured above).

That looks like the action of a fast-moving decisive company, and makes Intel look cumbersome by comparison. No wonder ARM designs are beating Intel’s in mobile devices and embedded processors, and look set to do well  in low-energy servers.

Of course, that ignores the fact that ARM is about one percent the size of Intel. ARM’s turnover is about $570 million, while Intel’s is $530 billion. ARM only designs processors, while Intel has its own fab plants, and ARM is competing in specific marketplaces.

“Intel had a definitive date when Otellini was going to retire,” East told TechWeekEurope during an analyst call today. By contrast, ARM had no set announcement, so it could keep quiet about the CEO-change until it was good and ready, he said: “There is no way I’m going to do anything that makes ARM vulnerable. It looks quicker than the Intel process on the outside, but we took as long as we needed to find the best possible CEO.”

ARM’s strategy remains unchanged, but East (below) thinks it’s time for a new leader.

“We are planning for things that will drive growth in 2020 and beyond,” he said. “By that time I would have been CEO for twenty years. I think that is too long. I don’t think it is healthy for the business, no matter how much energy and stamina I have.”

It’s best to make the change when the business is healthy, and ARM chose a morning in March to make the announcement, because East and Segars will have a three month handover.

In early July, ARM’s planning cycle sets budgets for the following year, said East: “It is right to the Simon gets to lead that process the first year he is leading the business.”

Don’t expect major changes, though. Both East and Segars told analysts that ARM’s plans are going well.  It’s been reported that the firm wants to build on its tablet lead and become a major player in mobile PCs, but the pair would not bet anything on that: “We aren’t fixated on one product category compared to another,” said Segars. “The smartphone market and the server market continue to grow, and our processor tech is very compatible with the kind of servers people want to deliver.”

The whole process is being managed, so as not to “give any uncertainty to the market,” said East. That’s a contrast to Intel, which will still be in transition when East has left ARM.

Wait a minute though. East wouldn’t be drawn on his plans after leaving ARM. He couldn’t be in the running to head up Intel could he?

That would be great – though probably about as likely as Will.i.am.

Could you have run ARM? Take our quiz!