He wrote the following: "The big question on many people’s minds is how will we respond to new computing categories where we currently have little presence, specifically tablets and smartphones."
Intel's Atom processor is bound for Windows 7 tablets next year, but they've had some problems in the past getting it aboard thin tablets. The Atom consumed more power than an ARM chip, and generated too much heat. These problems are incompatible with a form factor like that of the Apple iPad.
In the memo, Otellini also said he was "very optimistic about our opportunity in tablets and smartphones, even though we are not first to market with a solution." Intel is in for a tough challenge in a rapidly evolving field, i.e. dual-core chipsets.
Otellini compares their challenge to what they experienced with server chips. He says that while they were the tiny newcomer to the category, they went on to control 90% of the market.
source: Bloomberg via Electronista