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New Intel CEO Brian Krzanich outlined a new approach at Thursday's investor day: "We'd become insular. We'd become focused on what was our best product versus where the market wanted to move."

(Intel photo)

SANTA CLARA, Calif. – Intel hung a figurative sign outside its corporate headquarters Thursday: Under new management.

The chipmaker’s new executive team admitted past failings at the company’s annual investor day and outlined a more open approach going forward, pledging a rapid plunge into tablet computing and dropping one of the former CEO’s key strategic tenets.

Intel has been dabbling in contract manufacturing, using its leading-edge factories as foundries for other companies' chips. But under prior chief executive Paul Otellini, Intel refused to make microprocessors for direct competitors. That limited Intel's potential foundry business to smaller companies that operate in market niches.

On Thursday, Intel dropped that restriction and threw the doors wide open to anyone who can make a compelling business case for using Intel’s leading-edge manufacturing technology.

“We are evolving and expanding our business model,” new Intel President Renee James told investors and analysts at the company’s annual gathering of Wall Street analysts and institutional investors at the company’s Silicon Valley corporate headquarters.

From now on, James said Intel will evaluate prospective foundry clients on a “deal-by-deal basis, not on an architecture-by-architecture basis.” That applies, James said, “even in areas where there may be some competition with businesses that we’re in.”

Unstated, but obvious to the dozens of big-ticket investors and Wall Street analysts, is that Intel is now open to manufacturing processors based on designs from rival ARM Holdings.

The philosophical overhaul is emblematic of a more open approach under new chief executive Brian Krzanich, who’s trying to overcome ebbing sales in Intel’s core personal computer market by tapping a variety of new businesses, from foundry work to mobile computing.

“It’s a refreshing change in flexibility,” said Michael McConnell, a Portland investment analyst who follows Intel for Pacific Crest Securities. “They’re not fighting the market anymore.”

Investors responded positively, pushing the stock up 2.8 percent Thursday to $25.23, near a 52-week high. Even so, Intel cautioned that it won’t be transforming the business overnight. The company forecast flat sales and profits again in 2014, the third straight year of stagnation.

“I think it’s still a company in transition for a couple of years,” McConnell said.

Though Intel’s headquarters are in California, its largest and most advanced operations are in Oregon. The company has more than 17,000 employees in Washington County and its multibillion-dollar chip factories play an outsized role in Oregon’s economic output.

Thursday's pitch to investors began with a mea culpa, both from Krzanich and from the man who promoted him to CEO last spring, Intel Chairman Andy Bryant.

“I was personally embarrassed that we seemed to have lost our way,” said Bryant, who works from Intel's Jones Farm campus in Hillsboro. He acknowledged that Intel had flat-out missed the consumer appeal of the iPad and other tablets, which now run primarily on ARM-based designs.

That “put us in a hole,” Bryant said. “We’re paying a price for that right now.”

Promoting Krzanich from chief operating officer last May, Bryant said, was the first step in digging out of that hole. He commended Intel’s new chief as someone who knows the business inside out, who knows how to remake Intel and won’t let his own ego get in the way.

Pressed by analysts Thursday on the failure of past initiatives, Krzanich said he shares the blame for not pressing ahead with technologies that could have positioned Intel better for the mobile revolution. He said Intel won’t make that mistake again.

“You need to hold me accountable,” he said, “because these got off the road map each and every time.”

On Thursday, Krzanich said Intel’s current efforts to develop its mobile processors on par with its leading-edge chips for PCs and laptops are bearing fruit. He pledged that sales of Intel-based tablets will quadruple next year, to more than 40 million.

Additionally, Krzanich and James outlined initiatives designed to branch Intel out into mobile security, working with subsidiary McAfee to link hardware and software to provide better protection against hackers and malware.

They said Intel will push new processors for the “Internet of Things,” an industry term that describes connected appliances, cars and everyday objects that are tied together online to improve performance and add features.

“We’re going to put computing capabilities that no one else has at the lower end,” Krzanich said, “at the very edge of the Internet.”

Intel’s new leadership comes across as more practical and pragmatic than its predecessors, said Patrick Wang, who follows the company for Evercore Partners. But he cautioned that investors will have to wait a year or more to see dividends from their approach.

“They laid out a lot of hope for 2015,” he said. “They’re going to reset the competitive position.”

-- Mike Rogoway; twitter: @rogoway; 503-294-7699