“The lesson I took away from that was, while we like to speak with data around here, so many times in my career I’ve ended up making decisions with my gut, and I should have followed my gut. My gut told me to say yes.”

— Paul Otellini, former CEO of Intel, on saying no to putting the company’s chips in the iPhone before the smartphone was introduced. He told the Atlantic he couldn’t accept Apple’s financial terms: “It wasn’t one of these things you can make up on volume. And in hindsight, the forecasted cost was wrong and the volume was 100x what anyone thought.” Intel competitor ARM then became the dominant chipmaker in smartphones. Intel’s missed opportunity is seen as the reason the nearly 40-year veteran of the company  stepped aside three years  before he reached the mandatory age of 65, although the Atlantic points out that he is perceived to have kept the world’s largest chipmaker a powerhouse during his eight years at the helm. (Intel announced in November that there would be an early passing of the torch, and named a new chief executive earlier this month.) Brian Krzanich, who officially became CEO at the Santa Clara company’s annual shareholder meeting Thursday, acknowledged the position Intel finds itself in amid a PC slowdown and mobile’s rise: “Yes, we missed it, we were slow to tablets and some of the mobile computing. We do believe we have a good base.”

Photo of Paul Otellini from Mercury News archives

As Intel prepares for a passing of the torch in a couple of weeks — it announced today that COO Brian Krzanich will take over for Paul Otellini on May 16 — there is plenty of speculation about what the move means for the world’s largest chipmaker.

A couple of key questions:

Paul Otellini (Reuters)

Is it more of the same?  Otellini, who had been CEO since 2005, has been with Intel for about 40 years. In November, he announced that he would step down from the chief executive position three years earlier than the mandatory retirement age of 65. He said then that it was time to “transfer Intel’s helm to a new generation of leadership.” How did that work out? Well, Krzanich is 52, and has been at Intel since 1982. As the Merc’s Steve Johnson reports this morning, some analysts don’t think the change in leadership will mean a major shift in strategy at the Santa Clara company. Johnson previously reported that Intel was doubling down on manufacturing, which is the new CEO’s strength. But…

What about mobile? With Otellini at the helm, Intel largely missed the beginning of the mobile revolution, and is playing catch-up as sales of smartphones and tablets eat into growth of traditional PCs. Early last year, the Silicon Valley giant was seen to have finally gotten it. (See ARM Wrestling: Intel Finally Putting Up A Fight In Mobile.) Although as recently as last summer, Otellini was playing down talk of the mobile revolution that has thrown Intel for a loop. He did allow that the rise of Apple’s iPhone, and the subsequent smartphone explosion, was “a great leap forward.”

In the company’s statement, Krzanich specifically mentioned mobile’s importance: “I look forward to working with our leadership team and employees worldwide to continue our proud legacy, while moving even faster into ultra-mobility, to lead Intel into the next era.” He disclosed few details but told the Wall Street Journal that his strategy for Intel, co-developed with new company President Renee James (who has been the company’s software chief), involves getting Intel chips in smartphones, tablets and the growing field of wearable computing.

Speaking of legacy, the Merc’s Mike Cassidy wrote about the company’s proud history when Otellini announced plans to step down, and reminds us that Intel has managed to roll with the punches and changes in the computing industry. Still, he concluded that the sixth CEO of the company where Silicon Valley’s “godfathers” came from will have his work cut out for him. Krzanich’s statement seems to show he’s mindful of Intel’s storied past as he deals with the company’s many challenges of the future.

Intel shares are up about 0.3 percent to $24.08 as of this post.

Photo of Brian Krzanich from Associated Press archives

“I think what we did was we created an open standard that everybody can benefit. What I am happy to see is that everybody participates in this ecosystem and they are all making money.”

— Ajay Bhatt, co-inventor of the USB, which remains the standard for moving data from one digital device to another amid the rapid changes in the computing industry. “Somebody interviewed me once and they said, I don’t know, I don’t know, if I made a penny per USB point and Intel made a penny per USB point then we would have made a lot of money,” he told CNN, which says that today, almost 20 years after the invention of USB, an estimated 10 billion USB devices are being used around the world. About 2 billion USB devices are shipped every year, Bhatt says. The Intel Fellow and chief platform architect says it took six years and plenty of convincing — of his Santa Clara chip giant employer and other tech companies and gadget makers — before they got on board. (Bhatt and others at Intel did the work on the standard’; other companies credited for its development are Compaq, DEC, IBM, Intel, Microsoft, NEC and Nortel.) Bhatt was immortalized as a “rock star” inventor in an Intel TV commercial a few years ago, although he was portrayed by an actor. Still, he scored cool points with his daughter: “When I first found out my dad was going to get a commercial … I screamed, actually,” Priya Bhatt reportedly said at the time. Nowadays, as the PC industry goes through a transformation prompted by the rise of mobile, Bhatt is working on “a computer that will last all day long,” he told Intel Free Press, an in-house publication, in an interview published Thursday. “We’re in the midst of reinventing the PC once again.”

Photo of USB drive from Associated Press archives

Microsoft is again in trouble for failing to give consumers a choice in Web browsers, with the European Union fining the company 561 million euros, or $733 million, for non-compliance with a 2009 settlement. It is the first fine imposed by the EU for non-compliance with a voluntary agreement.

This fine is meant to send a signal to other big companies that fail to hold up their end of whatever bargains they strike with the EU.

“I hope this decision will make companies think twice before they ever think of internationally breaching their obligations or even neglecting their duty to ensure strict compliance,” said Joaquín Almunia, EU competition chief, according to the Wall Street Journal.

Big companies under scrutiny in Europe, of course, include Google. The search giant is talking with Almunia’s office over allegations by its competitors — including Microsoft — that it has abused its dominance in search and advertising, and it has already been asked to change some practices.

Google earlier this year secured a settlement in the United States, avoiding an antitrust lawsuit over accusations that it was favoring its own products and services in search results. (See Google must be feeling lucky: It ducks U.S. antitrust suit with FTC settlement.) While its deal with the Federal Trade Commission includes making changes to its practices, its rivals think Google got off easy, and as GMSV has mentioned before, were looking to Europe to be tougher on the company. (See The Google-FTC deal the day after.)

The EU can fine a company as much as 10 percent of its annual revenue, which for Google could mean about $5 billion because it hit $50 billion in sales for the first time last year. However, the EU has not imposed a fine that large; the New York Times says the biggest fine the EU has imposed was about $1.4 billion against Intel in 2009, over allegations the Santa Clara chip maker strong-armed computer makers and steered them away from rival AMD’s chips. (See Europe gets medieval on Intel’s assets.) Intel is appealing that fine.

But back to Microsoft, which reportedly says it failed to live up to its deal with the EU because of a technical error that involved about 15 million installations of Windows 7  in Europe over about a year, ending in 2012. The company has reportedly apologized for that super-expensive error. The deal called for Microsoft to provide a browser-choice screen, but a third party noticed it stopped doing so in 2011. (One issue that brings up: whether the EU can effectively monitor its antitrust agreements, according to an analyst quoted by the BBC.) Over the past decade of EU investigations of Microsoft, the U.S. company has been fined more than 2 billion euros.

In 1998, the United States brought an antitrust lawsuit against Microsoft over its bundling of Internet Explorer with Windows. A settlement was reached in 2001, and U.S. antitrust oversight of the company ended in 2011. (See Quoted: For Microsoft, the end is near.)

Microsoft shares are down about 1.5 percent to $27.95 as of this post, while Google shares are down about 1 percent to $830.59.

Silicon Valley giants and other tech companies have been bitten by the love bug — or at least a marketing version of it.

The companies have taken to Twitter to wish all a happy Valentine’s Day.

EBay posted a picture of a couple standing in a heart shaped by rocks that says, “Happy Valentine’s Day!”

Lenovo gives a love-out to #nerds with “Lenovo Love.”

Intel spreads robot love to @Alienware: “We like you a bot. Happy Valentine’s Day!”

Microsoft’s Bing search engine is looking for love — for itself with “Love Bing.” 

And PayPal remembers those who won’t have a valentine to snuggle up with today: “Date of one still equals fun.”

Intel on Tuesday confirmed year-old rumors (see GMSV post) that it is jumping into Internet TV with its own streaming set-top boxes, raising questions about whether the Santa Clara chip maker can succeed in an increasingly crowded market and whether another foray into consumer products will pay off this time.

All the cool kids are hanging out on Streaming Video Way, because people like 1. to be entertained, and 2. instant gratification. It seems simple enough, but as Netflix and Apple and Google can tell you, it isn’t. The service that Intel seems to be aiming for — providing hardware as well as bundles of “premium” content — could be expensive and tough to pull off.

According to various reports, Erik Huggers, vice president and general manager of newly created Intel Media, said Tuesday that he’s still in talks with content providers. (A Wall Street Journal report last month said there seemed to be trouble on that front.) But also, Huggers said he hoped to launch a product (no name, no price) this year. It seems optimistic, considering the well-known challenges Apple and Google and even Netflix — which is a video-streaming pioneer — have faced when it comes to securing movies and TV shows for their respective products and services. There’s cable and networks and studios to contend with, and they all want to make sure they get what they feel is their fair share of revenue. Intel should have learned that lesson because its chips were inside Google TV products, which have largely been a flop.

On the hardware-only side, the competition is just as fierce, with set-top makers Roku, Boxee and many smart-television manufacturers already established in the market.

As for Intel’s track record with consumer products, it’s not very good. It’s been to the living room before, with Viiv in 2006. (See That’s pronounced Viiv, as in “need to survive.”) And other past efforts, such as USB microphones and modems, have been forgettable. “It’s hard for component suppliers to have traction in the consumer market,” Nathan Brookwood, principal analyst at Insight 64, reportedly says. That’s something another Silicon Valley giant, Cisco, has found out. It is moving away from consumer products.

“The question you have to ask with Intel is, is anything they do big enough to move the needle?” Stacy Rasgon, analyst at Sanford Bernstein, said, according to Reuters.

“My advice is to take a look at our patent portfolio before you make a final decision here.”

— Steve Jobs, in a 2007 email to then-Palm CEO Ed Colligan, as the two discussed the Apple CEO’s accusation that Palm was trying to actively lure away his employees. Colligan said Jobs threatened the smartphone company with a patent lawsuit if the company did not agree to a no-poaching policy, according to Reuters, citing a court filing made public Tuesday. (The Jobs-Colligan communications were first brought to light in 2009, by the way. See Apple and Palm and poaching intrigue, oh my.) A lawsuit brought by five tech workers against Apple, Google, Intel and others accuse them of a conspiracy not to hire one another’s employees and keep wages down. The tech companies, which also included Adobe Systems, Intuit and Pixar, reached a settlement with the Justice Department in 2010. Besides the emails between Jobs and Colligan, the Verge points out other examples that show the extent of the no-poaching practice, including an explicit no-hire list at Adobe and an email from Intel CEO Paul Otellini acknowledging that he and then-Google CEO Eric Schmidt had a “handshake ‘no-recruit.’ “

We’re talking numbers today:

• Facebook shares are down about 2 percent to $29.50 as of this post, a few days after it unveiled a new way to search the massive social network. Graph Search has received mixed reviews and sparked cautious expectations, as the Merc’s Brandon Bailey reported. We’ve included this item not to talk about search again, though, but about California’s budget. Gov. Jerry Brown’s aides have cut their estimate by nearly one-third of the revenue the state expects to bring in from Facebook’s initial public offering, according to the Wall Street Journal. The state now expects $1.3 billion instead of $1.9 billion by June 2014, from stock sales by early investors, vesting of restricted stock and the exercise of some stock options.

Shares of the Menlo Park company began trading on the public markets in May at $38, about 20 percent higher than their current trading price.

• Speaking of Facebook, Instagram — which seemed to face a user revolt after it recently changed its terms of service (but quickly backtracked) — has released user numbers. The Facebook-owned photo-sharing service said Thursday that it has 90 million monthly users, and that it has seen growth from December to January. In late December, the New York Post reported that by one measure, Instagram had lost 25 percent of its daily users after the TOS changes appeared to indicate the service would sell user photos to third parties. Instagram and others immediately disputed those numbers, as the Merc’s Biz Break wrote. AllThingsD writes that third-party analytics doesn’t take into account, among other things, the users who don’t connect their Instagram accounts to Facebook. 

• And finally, Intel shares are down more than 7 percent to about $21.10 as of this post, the day after the Santa Clara chip maker, dealing with a slowing PC market, posted a big (revised) dip in profit (end revised) for the fourth quarter (down 27 percent year over year) and for the year (down 15 percent from 2011) but said things are looking up. As the Merc’s Steve Johnson reported, Intel CEO Paul Otellini predicted “renewed growth” from the introduction of new smartphones and tablets with Intel inside this year. The company’s 2013 spending plans as it makes its mobile push seems to be worrying investors.

And remember, Intel’s mobile push has been a long time coming. It was a year ago that GMSV wrote ARM wrestling: Intel finally putting up a fight in mobile, after Intel showed off ultrabooks and mobile products at last year’s Consumer Electronics Show. Today, Intel appears not to have made much progress in mobile, something Bloomberg Businessweek’s Ashlee Vance writes tarnishes Otellini’s otherwise impressive legacy at the company. Otellini is stepping down as CEO in May, the company announced in November. (See Intel surprise: Yet another CEO change at a valley giant.)

A couple of reports about PCs and the challenges they face:

• Woe for the holidays: Worldwide shipments of personal computers fell in the fourth quarter  for the first time in five years, IDC said Thursday. Its analysts blamed demand for tablets and smartphones. The research firm also said the 352 million PCs shipped in 2012 represented a 3.2 percent drop from 2011, the first year-over-year decline since 2001.

Still, “some leading brands managed do to well relative to the market. HP, Lenovo, Asus, and Samsung were among the top performers, taking advantage of some consumer interest in Windows 8, and a push to build up their presence ahead of 2013,” said David Daoud of IDC in in its press release.

IDC’s numbers showed that Hewlett-Packard remained the world’s top PC maker in the fourth quarter, with 16.7 percent market share. No. 2 Lenovo had 15.7 percent and No. 3 Dell had 10.6 percent.

On a mixed day for tech stocks, shares of HP are down more than 1.75 percent to $15.98 as of this post. Dell shares are down more than 1.5 percent to $10.86.

• Also, research firm Canalys predicted the continued decline of Windows PCs and Intel chips amid the rise of smartphones and tablets.  Its numbers: Wintel machines’ market share will drop to 65 percent in 2013, from 72 percent in 2012. It predicts that tablets will reach 59 percent of the market by 2016.

By the way, the Merc’s Troy Wolverton this week wrote about Intel’s mobile efforts. An Intel executive told him that there are now six smartphones and 10 tablets shipping that have Intel chips inside — compared with zero phones last year, Wolverton points out.

“They will say that I have to do household work and look after children, so I don’t need [the] Internet.”

— a respondent from India to Intel‘s survey, Women and the Web, on why her family would oppose her getting on the Internet. The survey commissioned by Intel, which is being released today, interviewed 2,200 women in four developing countries — Egypt, India, Mexico and Uganda — and found that on average, 23 percent fewer women than men go online, although the gap is wider in some places. Among the findings: In India and Egypt, 1 in 5 women believe the Internet is not “appropriate” for them — some said their families thought they would be exposed to pornography. (And a respondent from Mexico said her husband opposed her Internet use “because he thinks I am online looking of men.”) In addition, lack of access and education are probably reasons why 40 percent of women who don’t use the Internet cite being uncomfortable with technology, according to the survey. “For women, the basic problems are the problems that are much larger than technology. They are the gender equality, the patriarchy, the violence against women who dare to use the technologies because men are suspicious. The forces that keep women and girls from going to school,”  said Nancy Hafkin, senior associate at Women in Global Science and Technology, who was interviewed as part of the survey. The report issues a collective call to action to increase the access of women and girls to the Internet in order to empower them  and increase their economic opportunities.