Intel chief: UK well positioned to lead Europe

Intel's chief executive Craig Barrett thinks that the high penetration of PCs in the UK and continued strong sales here should boost e-commerce ahead of mainland Europe
Written by Matthew Broersma, Contributor

The UK is well-positioned to lead Europe in the Internet sector, according to Intel chief executive Craig Barrett, speaking in London on Wednesday.

He said that strong investment in business IT and an aggressive push to introduce flat-rate Internet access and broadband connectivity meant that the UK is ahead of the rest of Europe in the Internet world. A recent study found that flat-rate Net access charges in the UK are now lower even than in California.

"The UK is positioned relatively well to be the leader of Europe [in the Internet]," Barrett said. "It has high PC penetration and good PC sales, in which it is leading Europe. Businesses here are continuing to invest in the Internet from a productivity standpoint."

PC sales are expected to show the first sequential slump this year in the US, but are expected to continue rising in Europe, a sign that while the US has pneumonia Europe just has "the sniffles", as Barrett put it.

But the single biggest obstacle to the PC market is now the lack of high-speed, or broadband, home Internet connections, Barrett said. Intel expects the next big driver of consumer and small business PC sales to be broadband applications like streaming, high-quality video, but unlike computer processors, network speed into the home is advancing at a snail's pace. "There are some really interesting things you can do with taking computing power and tying it with a big fat pipe," he said. "Everything rests on that big fat pipe."

However, while processor speeds continue to shoot ahead, broadband rollout rests in the hands of sluggish telco monopolies like British Telecommunications. It also involves much more complicated, real-world logistics, such as laying cables in city streets. In the US, where broadband technologies such as cable-modems and ADSL have been on the market for years, availability to consumers is still geographically limited, and total broadband usage represents a tiny fraction of the households connected to the Net.

Bill Gates, among others, has said that the speed of connection in to the home -- the so-called "last mile" between the high-speed Internet backbone and people's computers -- will continue to be a bottleneck for the conceivable future.

Barrett brushed such concerns aside, however. "You will see this, absolutely," he said.

He also dismissed signs that popular culture's love affair with the Internet is ending, pointing out that Europe is forecast to have more Internet users than the US by the end of the year. A survey this week found that the number of Britons citing email as their favourite means of communication has plummeted, while more people said they preferred face-to-face meetings.

The Net's real impact will increasingly be felt in business, Barrett said, calling it "the medium for revolutionising communications with vendors and suppliers".

The one technology Barrett believes will languish is third-generation wireless, the rights to which European telcos paid billions for last year. "I suspect that technology is a bit further out than people believe," he said. "If you look at GPRS, I think we will see more of that instead of this great technological leap [to 3G]."

3G gives wireless devices an always-on broadband data connection and makes possible interactive video and other applications, while GPRS (general packet radio service) is less expensive but creates an always-on data connection for standard mobile phones.

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