Intel CES Las Vegas - January 7, 2008

[Beginning of recorded material]

Male Voice:

Ladies and gentlemen, please welcome Paul Otellini.

Paul Otellini:

Good afternoon. Let me start by extending my welcome to all of you
here at CES. The song you just heard was an update to the classic
music video by a group called the Buggles. It was called "Video Killed
the Radio Star," and it was the first music video ever shown on MTV,and it debuted in 1981. After that debut, the music industry was never
the same. Recorded music, which was previously an audio experience,
now became the visual experience via television, and the music video
became as important as the song itself. MTV changed the musicindustry forever.

Our updated song lyrics highlight another disruptive force that I thinkis going to change the consumer electronics and entertainment industry.
And that's the Internet. Now, the Internet isn't really new news
anymore. It's been part of our lives for many, many years. There's 2
billion videos viewed every day. There's 100,000 blogs created daily.
E-commerce has grown from the first CD sold in 1994 to threequarters of a trillion dollars in 2007.

Paul Otellini:

The Internet will create an opportunity for those who embrace it.
Today we live in the era of the go-to Internet. If you want to find apiece of information, you first go to your PC, then you go to a placethat has Internet access, then you go to a search engine, then you go
yet to another site, and hopefully you finally find what you wanted in
the first place. In this model, the Internet reacts to our requests rather

Intel CES Las Vegas - January 7, 2008
Page 2than anticipating them. The next evolution of the Internet changes thatmodel. Rather than us going to the Internet, the Internet's going tocome to us. It will bring us the information and the tools we need at
any given time [in] any given personal situation.

You may think you've heard this before, but what I'm talking about issomething that's far beyond the concept of push media or RSS news
feeds or personal alerts. I'm talking about bringing a new level ofcapability and usefulness to the Internet. Think about a more personalInternet, one that is proactive, predictive, and context aware. It serves
you by delivering what you want, when you want, how you want it,
and wherever you are. And rather than talk about this, I thought I'dshow you what I mean here. And via the power of staging in Las
Vegas, I'd like to have Craig join us now from Beijing for theupcoming Olympics in Beijing next summer. Hello, Craig.

Craig:

Paul, welcome to China.

Paul Otellini:

Welcome to China. It's nice to be here. Thanks for having me.

Craig:

So what we really wanted to show today, and we love all this Las
Vegas magic as we roll out our sets here, but as I'm a travelingstranger in a strange land, as this demo comes up we want to show
some really amazing things. As a business traveler, like myself andyourself, and how we're going to get around in motherland China.

Paul Otellini:

Okay.

Intel CES Las Vegas - January 7, 2008
Page 3

Craig:

How's your mandarin?

Paul Otellini:

Poor.

Craig:

Okay. Unfortunately, I'm in the same boat. So wouldn't it be cool if I
could have a mobile device, something like this, that would allow me
to do something like this?

Paul Otellini:

Wow, that's pretty cool. How did you do that?

Craig:[So plug this in here], guys, so we can share this with the audience
here, but it's really amazing. So with a mobile Internet device like this,the second I get off the plane into China, GPS and my mobile
broadband knows exactly what I'm going to need on my exact trip. So,
GPS -- I get all of my navigation as well as I get all of my translation
software, so I'll be able to use augmented reality to identify some signs
like this.

Paul Otellini:

That's very cool. Can you show us something else it does?

Craig:

Absolutely. Let's take a look over here. So it looks like we have whatlooks to be like a restaurant here. Let me go ahead and point this guyout. All right, what have we got there? It says good, good, home-stylecooking. Sounds delicious. So why don't we see if we can get a little
bit more info? And there, now, I'm using an actual technology fromTotal Immersion*, and what I'm seeing here is I can actually get a full
information download from the restaurant as well as look at video andsee some of the great pictures of the dishes.

Intel CES Las Vegas - January 7, 2008
Page 4[Video.]Craig:

Well, apparently this is the place to get Phoenix claws all the way
across China, but –Paul Otellini:

Phoenix claw?

Craig:Exactly my question as well. So if I take a look at the menu here. Oh,
looks like it's our number one pick at the top, fairly inexpensively
priced, and, oh, is that looking familiar?

Paul Otellini:

Yeah. You know, I had chicken feet last night in Vegas, so I think wemay want to stay away from that today.

Craig:

You're good, you're good, okay.

Paul Otellini:

But, you know, it's a great use of how this technology would be usefulin a foreign land.

Craig:

Absolutely.

Paul Otellini:

So why don't we go ahead and jump into something else?

Female Voice:[Speaking Mandarin.]

Craig:

No problem. Here's where my little friend here comes in to play. So
let's go ahead and bring this guy up to the screen. And what I'm goingIntel CES Las Vegas - January 7, 2008
Page 5to do is actually use this as my interpreter. We're going to do somereal-time speech-to-speech translation. So, looking good there, andwith the processing power of my MID, let's see if we can make thisconversation maybe just a little bit smoother. So go ahead and bringthis guy up. Can you tell me the way to workers stadium?

Translation:[Speaking Mandarin.]

Female Voice:[Speaking Mandarin.]

Translation:

Wow, cool.

Female Voice:[Speaking Mandarin.]

Translation:

Workers stadium is about 7,000 kilometers due west of here.

Craig:

You're very funny. Thank you so much.

Female Voice:[Speaking Mandarin.]

Craig:All right. So that's going to be one heck of a long walk. All right, so,
anyway, let's go ahead and go back here, and I want to show you one
more thing that's going to be my amazing friend on my trip through
China. We're going to go ahead and bring up here the web application.
So I have access to all my broadband, and what I have here is a web
application called Everyscape*. And the best part about Everyscape is
we're actually going to be taking a full-on walking tour of Beijing, fullpanoramic views, all at the eye level. So the real gist is we're inIntel CES Las Vegas - January 7, 2008
Page 6

Beijing and I want to get to the Intel office. Now, they told me it's
within the Kerry Center.

Paul Otellini:

It's in the Kerry Center.

Craig:

Yep. So unfortunately it's not quite that easy – left, right. However,with this type of software, I can go ahead and access where I need to
go and not only be able to get turn-by-turn directions, but actually see
where I'm going before I even put my feet to the street.

Paul Otellini:

That will be useful.

Craig:So let's go ahead as I'm actually coming out of the Kerry Center righthere. I just absolutely love this program. And now I remember, you
had to go through the mall, and we're actually outside of the Intelbuilding right here. So let's go ahead and take a peek inside the lobby.
All this augmented reality can be used to identify other leaseholders inthe same building, but I have to take it over here to the directory. And
there we are. And let's go ahead and take the elevator up. There we are.
This is our actual office inside Beijing. So, talk about something reallyamazing. And by this time, I haven't even left my hotel room yet.

Paul Otellini:

You know, Craig, I think this would be a great business tool, but I
suspect it would also be even better for vacations and personal use.

Craig:

We're not all about work here at Intel, Paul, obviously. So, when we'retalking about some great vacations, you can't say vacation, in Beijing,at least, without going to the wall.

Intel CES Las Vegas - January 7, 2008
Page 7

Paul Otellini:

Go to the Great Wall.

Craig:

Let's go and take a look. So you know what I'm a big fan of is when
you go to the museums and tours and see all those sort of things, you
can get the little headphones and audio, and it's important to have thatkind of information ready at your fingertips. Well, we have a little
broadband, my private MID device that's right for me, and maybe we
can go ahead and get some information on the fly from our virtual
terracotta warrior here. Let's see what he has to say.

[Audio plays.]

Craig:

Pretty amazing, right? So not only do I have this whole access at myfingertips, I get points of interest, what exactly I'm looking at in the
distance, and maybe some of the most pertinent information when
you're stranded on the wall.

[Audio plays.]

Craig:

So in case you're in a real race, I'm going to go ahead and take a lookat something like my real scenery. Now isn't that cool? And just incase I need to pull an actual sprint to get where I'm going, I'll have full
directions on how to get there.

Paul Otellini:

That's just awesome.

Craig:Yeah.

Intel CES Las Vegas - January 7, 2008
Page 8Paul Otellini:

What we just saw is an example of the Internet seamlessly bringing
information we need based on our requirements at this point in time
independent of the activity and the type of device. We didn't have to
be connected to a particular search engine. It was all context-aware. It
knew the information and it had access to the databases to understandthe context to give me the information. We had what we needed when
we needed it. Even better, what you saw was real. What we were able
to do here was simultaneous translation, search, and download real
data from an Internet visual database. However, there was one minor
problem, right, Craig?

Craig:

There is one catch. So, while we're using all these usage models andthe applications are very, very real on the mobile Internet device, we
are using a couple of cycles from two Intel® Core™2 Duo processorbased machines. However, working at Intel, it's not going to be morethan a blink before we make that future a reality.

Paul Otellini:

I would hope so.

Craig:

Thank you very much, Paul.

Paul Otellini:Thanks very much.

Craig:

Appreciate it.

Paul Otellini:Thanks, Craig. Craig's last point was really the point of this demo.
Doing things like real-time translation, augmented reality, making

Intel CES Las Vegas - January 7, 2008
Page 9real-time use of these huge visual databases will require exponentiallymore powerful processors that also are exponentially using less andless power. When that happens, we can then shrink the devices to beable to have things that you carry around that have the kind of
capability you just saw replicated backstage on a much more powerfulcomputer. And that's exactly what Intel plans to deliver in the next
three to five years. That was one example of how a more personal
proactive Internet is going to benefit us. And while the demonstration
was about travel, the same technology will also have applications on
the factory floor or even when you go shopping. Though what you saw
in the demo will be possible in the not-too-distant future, there aresome obstacles standing in our way.

The first obstacle to delivering this experience we just saw is silicon.
We need more powerful, more energy-efficient microprocessors. The
second obstacle is that we need a ubiquitous, wireless broadband
infrastructure. The third obstacle is that the Internet today lacks thecontext about what we need. And, lastly, we need much more naturaluser interfaces.

Each obstacle in and of itself is a challenge. Together, they're very,
very daunting. At Intel, though, we like challenges. And we're working
hard to deliver the solutions. Silicon building blocks, wirelessconnectivity, and other enabling technologies like visualization andgesture computing that make this vision a reality. But we can't do italone, nor are we trying to. Development of the personal Internet
requires an ecosystem. We need the smartest minds from multiple
industries working together to create new business models. The

Intel CES Las Vegas - January 7, 2008
Page 10

opportunity for those in this room, in the CE industry, lies in creating
this next generation of devices and services that go with them. But first
we need to overcome the obstacles I've just listed. Silicon is thefoundation of all things that connect to the Internet. Let's start by
discussing the progress being made in silicon technology today.

Silicon chips today are really just collections of structures called
transistors that do the work of computing. Big things happen when weshrink transistors, and shrinking the transistor is the answer toaddressing the silicon needs of tomorrow's personal Internet.

The silicon industry has been shrinking transistors since its founding.
The idea framing this progression is called Moore's Law, anobservation made about 40 years ago by Gordon Moore, Intel's cofounder. Essentially, Gordon saw that silicon technology was
progressing at a very predictable rate. Every 18 to 24 months, wereduced the size of the transistors enough to double the number oftransistors on any given chip. Now, let me put this in perspective.

Our first microprocessor was introduced in 1971 and it was called the4004. It contained 2,250 transistors, each of which was ten microns in
size. Our latest quad-core microprocessor has 820 million transistors.
If we had used the same size transistor in the original 4004 to build
this 820 million transistor quad core machine, the die would be 9 feetby 6 feet, or the actual size of the plot standing behind me. It would
consume the energy of 200 U.S. households. But thanks to Moore's
Law and our ability to continually shrink the size of the transistors –Intel CES Las Vegas - January 7, 2008
Page 11

the real chip is actually 93,000 times smaller, about the size of yourthumbnail, and consumes 2,000 times less energy.

If shrinking is the key to solving our problem, you might wonder how
small is small.

As Intel's CEO, I'm proud to say that Intel has led the silicon industry
into the nano-world. Our latest manufacturing process builds
transistors 45 nanometers in size. So how big is a nanometer? Well, ananometer is one billionth of a meter. That's really small. To put this inperspective, a nanometer is to a meter as this marble is to the planet
Earth – the real Earth, not the image behind me.

Working in this incredibly small world presents extremely difficult
problems. Ten years ago, our scientists identified a major problem inshrinking transistors. As we made the transistors smaller, we foundthat they leaked more current. They created heat and power
consumption problems at the die level and at the device level.

Moore's Law might have come to an end by now. However, ourengineers found new techniques, a new recipe for making transistors
using what we call a high-k metal gate structure. To this structure we
added the element Hafnium to our transistor recipe for the first time.
This combination gives us a technology that has a very wide range ofoptions. We can deliver 38 percent more performance at the transistor
level for the same power as the prior generation, or we can cut thepower in half and have the same performance as the prior generation,

Intel CES Las Vegas - January 7, 2008
Page 12

giving us the ability to scale our devices for a wide variety ofcomputer and communication needs.

The discovery also allowed us to keep shrinking the transistors and tocontinue putting more and more die onto a chip. Intel now cranks outtransistors at the rate of 2 billion transistors a second. In fact, we haveshipped more than 2.4 trillion transistors since I walked out on thestage.

We currently have a roadmap that takes us out five more generationsof silicon process technology -- that's ten more years. The path will bemarked by numerous other scientific breakthroughs. I can't describe
them to you today because we haven't invented them yet. But I haveno doubt that we'll make all the breakthroughs necessary to make those
five generations happen. Moore's Law will continue to describe thefuture of silicon technology. Shrinking silicon though, throughMoore's law brings another advantage worth discussing. We can use
all these transistors to integrate new functions onto the same chip. In
the industry that's called system-on-chip technology, or SOC. For the
consumer electronics industry, we've designed a specialized SOC chip.

To do this we begin with a dedicated audio and video decode systemthat allows the chip to play 1080p video and 7.1 surround sound. We
added to that chip a high-performance Intel architecture
microprocessor core. We added to that a 3-D graphics unit for cooluser interfaces and on-line games. And we added to that technologies
to enable broadcast and multi-cast television.

Intel CES Las Vegas - January 7, 2008
Page 13

We call this chip Canmore. Canmore is our first SOC for consumer
electronics devices. Think of this as one single chip that is both a CE
system and an Internet computer on a single chip. We have our first
Canmore chips out of our fab and they're running here today in thisdevelopment system.

I'd like to show you what this chip enables. The chip is outputting
video to the screen behind me and to the speakers in the room. It's justa very simple demonstration of very, very high-def video withsurround sound capability. Remember, this chip is also an Internet
computer. So it allows us to be able to access the Internet with devices
that many of you in the CE industry are looking at designing – HD
TVs, set-top boxes, HD players, stereos and so forth. Anything thatneeds this kind of capability has a chip -- integrated, full system on achip, capability.

Thanks for turning the music off. Similarly, we can take those sametransistors and use Moore's law and the power of integration todevelop solutions for mobile Internet devices as well. Now what's amobile Internet device? I think a mobile Internet device is something
you carry around in your pocket that allows you to deliver the fullInternet. No compromises. To do this, we've created a new platform
that's called Menlow. Menlow will deliver the same Internet
experiences that the consumers have known so well and come to
expect – streaming video, flash, Java applications and a whole lot
more.

Intel CES Las Vegas - January 7, 2008
Page 14

All this happens while drawing less than one watt of power – all in aform factor today that is not much larger than a cell phone and over the
next year and two year time frame will shrink down in size by half,
and then by half again. I believe this new category of devices creates aprime opportunity for the CE companies in this room. I'd like to show
you a Menlow device.

This is one that's not yet been introduced. It's from Toshiba. This
happens to be a full Vista* machine using Menlow in a very, very
convenient form factor. One of the environments we like withmachines like this is Adobe's Air*. Intel's been working with Adobe toport Air to our platform for the next generation of ultra low power,
very high performance silicon that we've developed, and it can run on
devices like I've shown here.

You'll see again – Air has a wonderful run-time environment thatallows developers to develop powerful applications that are rich andengaging, and when it's paired with Intel silicon, Air is a complete
platform and OS independent environment. It means that I can get thesame experience on my desktop machine or on any mobile device.

The Internet is all that's required and the same high performancesilicon underneath it. So silicon was the first challenge standing
between us and the personal Internet. I think that wireless broadband
connectivity is the second challenge. The good news is that thatchallenge is being met. Eventually we will blanket the globe withwireless Broadband connectivity.

Intel CES Las Vegas - January 7, 2008
Page 15

There're many wireless technologies being evolved and developers arecompeting to do this – from WiMAX to 3G to 4G. Each technology
has its unique set of advantages and business models. Over the next 5
to 10 years, we at Intel believe that WiMAX provides a significant
advantage to bring about the personal Internet. Why? Because wethink it has the flexibility and coverage of cellular networks. It's
combined with that and with the upload and download speed ofbroadband, making it the best solution for video over the wirelessInternet. And it's expanding quickly, with commercial networks,
planned deployments and trials now covering 70 countries around theworld -- shown in green on the screen behind me.

Once we have silicon and ubiquitous Internet access from anywhere,
we still need to deal with this hit-or-miss nature of search today, which
does not yet take into account your location, your device, or thecontext.

Today we can't easily integrate context and personal preferences andrecommendations from the various social networks that we're all on.
Many companies are trying to solve this problem and technologies arebeing evolved to work on this. But essentially, we need to move fromsearching for information to a world where information finds you
proactively.

A more personal Internet, though, is a two-way street. To provide
more information to you, the Internet needs to know more about you.
And therefore the impetus is on us in the industry to make sure that we

Intel CES Las Vegas - January 7, 2008
Page 16

can provide the security and the privacy that consumers need to enable
this kind of service.

Lastly, the personal Internet needs to have much-improved userinterfaces. Intel and many other companies in the industry are looking
at things like gestures and motions, facial expressions and other ways
to interact with the Internet's vast resources. To picture the transition,
though, to a more natural interface, I'd like you to think about theNintendo Wii*. The popularity of Wii lies with the interface, and notwith the graphics. The controller wand is a very deceptively simple
innovation. It allows the player to use natural motions. You don't
expect to play a game on the Wii; you expect to engage and interact
with it.

Experience brings people together in many new ways. As humaninterfaces to computers have evolved from the keyboard to the mouseto the joystick and now to the wand, we've seen an evolution to a morenatural interface. And with each step, we see more active engagement.
And this will impact not just gaming. In fact, this will impact things
like social networking.

When you look at the social network sites today, the popularity ofthem suggests the high demand for people to connect, to share things,
to share their interests, to make friends. But on the social networksites today, you don't really get a sense of the personal interaction, asense of the person that you're interacting with. I think that thispersonal Internet I'm describing has the potential to come up with abetter sense of presence on the Internet with a few more technologies.

Intel CES Las Vegas - January 7, 2008
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The result when we do this will be things like Second Life*, and otherenvironments like that will take another step up in terms of the slice ofreality that we have in the virtual world.

You know, things like this today, though, need to be able to move
forward in terms of gestures, in terms of interactions, in terms of
involvement, to bridge the gap with the physical world. So I
challenged my team one more time to say "What might a social
experience look like as we evolve to the personal Internet?" Theparameters for this thought experiment were exactly the same as they
were in the Beijing demo earlier. We wanted to use technology thatexisted today, but that has the potential to be mainstream in just thenext few years. And once again, rather than trying to describe thistechnology, I thought we'd take a look at it.

Using the Internet to connect to friends and family and people whoshare common interests is a trend that's been growing for a couple ofyears, as I just talked about. For people interested in sharing music,
there are a lot of options, but there hasn't been a good solution formusicians who want to make music in real time over the Internet.
Until now. I'd like to bring out Alan J. Glueckman, who's co-founderof a company called eJamming* that was actually created to helpmusicians get connected live over the Internet.

Alan J. Glueckman:

It's great to be here, Paul. Thank you for inviting us. Now, theeJamming system is both a social networking portal for musicians andmusic lovers, and a downloadable software application. Musicians post
their music and their profiles at the eJamming Web site and meet otherIntel CES Las Vegas - January 7, 2008
Page 18

musicians to make music together in real time, creating, writing
together, and teaching. You can even record with musicians halfway
across the world, Beijing to Brazil to Europe, with near-zero latency.

Now, right now we should be hearing some music, but I don't hear it.
Ah, there it is! Right now you're hearing musicians playing live overeJamming peer-to-peer networks from multiple locations.

Paul Otellini:

From multiple locations?

Alan J. Glueckman:

In Las Vegas. You can even see on the interface how they’re playing
live. Now, I hear they’re looking for a singer to front the band. How
are your chops, Paul?

Paul Otellini:

They’re not good. But, I but we have a volunteer in the audience. Is
there anyone out there that would like to volunteer for this? You, sir,in the front row?

[applause]

Male Voice:Oh, we have a volunteer. How are you?

Steve Harwell:

I’m part of history.

Paul Otellini:

All right!

Steve Harwell:

Okay.

Intel CES Las Vegas - January 7, 2008
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Male Voice:How you doing, Steve?

Steve Harwell:[not audible]

Paul Otellini:

What’s your name?

Steve Harwell:

Steve Harwell, how are you?

Paul Otellini:

Hi, Steve, how are you?

Steve Harwell:

I’m doing great.

Paul Otellini:So, do you know anything about music, or can you sing or anything?

Steve Harwell:

I’ve been known to be able to sing a little bit. I’ve been around for awhile. I don't know if you’ve heard of our band. Have you heard of aband called Smashmouth before?

[applause]

Steve Harwell:Well, you –Male Voice:

You like this idea of jamming over the Internet?

Steve Harwell:Yeah, you know, I really do like the idea of being able to connect withyour band over the Internet. But the cool thing is when you’re notactually having to be in the same room, you know? I think that's reallyawesome.

Intel CES Las Vegas - January 7, 2008
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Male Voice:Well, Steve, we’ve actually made your wish come true. Right now, themembers of Smashmouth – your band – are online. And they’reconnecting over [not audible].

Steve Harwell:I didn’t know that.

Alan J. Glueckman:Oh, yeah. We have music, man. That’s okay. And they’re connecting
over eJamming’s peer-to-peer network. Now, something you’re goingto really like. The eJamming software both minimizes latency – which
is important – and yet imposes milliseconds of delay to keep you intime and in sync with the other musicians. And I know how important
it is to play in the pocket for musicians like yourself.

Steve Harwell:Oh, yeah, definitely.

Alan J. Glueckman:So, eJamming will coordinate all of those audio streams, so you heareach other really tight. So, go ahead, check it out.

Steve Harwell:

You guys want to play a little bit? Are you guys ready? Are you guys
ready out there?

[applause]

Steve Harwell:One, two, three, four . . . [music] You guys want to sing it? Ha-ha!
[sings][Applause. Music playing.]

Intel CES Las Vegas - January 7, 2008
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Paul Otellini:

I can’t believe how close in time that was, for them to be so far apart.
They are actually very far . . .

Steve Harwell:Oh, man.

Alan J. Glueckman:

Thank you, so much. You know, it's exactly why we createdeJamming. We’re all about musicians and music lovers. And weconnect all kinds of musicians – professionals like yourself, andamateurs like myself.

Steve Harwell:I heard you sing!

Alan J. Glueckman:Oh, yeah, that's it . . . Anyway, the important thing is, your friends andyour fans can also listen in to a live performance over computers, the
new mobile Internet devices, and wireless cell phones. Just think, it’sover eJamming’s new jam session technology. So, live performancesfrom anywhere in the world, 24 hours a day, anytime, right to yourears.

Paul Otellini:

Wonderful.

Steve Harwell:

You know what I like about that? You have MySpace*, you have allthese places where you’re meeting people. Myself, I meet my fans. But
now, as a musician, I see all these kids on YouTube* posting all their
jamming sessions. These kids get to meet each other. Now they get tobe able to jam together, and all of a sudden you've got bands that areIntel CES Las Vegas - January 7, 2008
Page 22

being created from all over the place, and they get to come together.
That’s just amazing.

Alan J. Glueckman:

That's what we hope to do. Thank you very much. Thank you, Paul.

Paul Otellini:Thanks for making this.

[applause]

Paul Otellini:

You know, that's a great step forward, but I think as we move towards
this visual Internet, do you think it would be helpful for you to be able
to see your band mates while you’re doing the jamming and playing
with them? I’m thinking about something like an avatar?

Steve Harwell:Yeah, that would be cool. You know, I tried some of that stuff out.
What I think would be awesome is if you would be able to create, like,a character, and to be able to jam but also have stuff that you could do
to yourself…

Paul Otellini:

Well, we may have a tool for you.

Steve Harwell:

Well I want to check that out.

Paul Otellini:

Well I'd like to bring out -- Steve, this is Jonathan Strietzel.

Jonathan Strietzel:

How are we going, Steve?

Steve Harwell:[not audible]

Intel CES Las Vegas - January 7, 2008
Page 23

Jonathan Strietzel:

Going good.

Paul Otellini:

And this is Jonathan. Jonathan is from Big Stage*. Jonathan, Steveneeds an avatar. But he wants something cool, not a cartoon.

Jonathan Strietzel:

That's not a problem. Steve, that's what we do. So Big Stage is allabout the personal Internet. The personal Internet is a place where
you're going to be able to create the digital version of you. And thatversion of you will be ported into all sorts of new and exciting
entertainment experiences.

Now all this is totally capable, using a standard digital camera righthere. We're going to create an avatar, Steve, by taking three simple
pictures. And this camera is like all the cameras I see pointing at us
right now. So Steve, you're going to look directly at me.

Steve Harwell:

Smile or a straight face?

Jonathan Strietzel:

Just straight face. And then you're going to turn, look straight ahead.
Let me take this picture. Turn a little bit right there. We're going totake the next one right here. And one more. And hold still. Right there.
All right. Cool.

So now what we're going to do is we're going to take these threepictures and we're going to bring them right over here to this PC. And
to save a little bit of time, we're going to go ahead and we're going toIntel CES Las Vegas - January 7, 2008
Page 24

use some images that we took earlier of Steve. So we'll load them upright here.

So these are the images, three simple face turns, as you guys see. And
we're going to go ahead and we're going to build a digital Steve now.
So get ready. It will be around 30 seconds to a minute or so, so let'stalk about what you guys are about to see.

In a short period of time -- you're going to have to wait. I know you
want to see this and you're smiling like crazy. You're going to see thedigital Steve fully animated. It's going to be talking. It's going to be
winking and blinking and ready for content.

Now what do you do with that avatar once all of you guys have createda digital version of yourself? The digital avatar can then be ported into
two forms of content, a still image or a video. And you can take thosestill images and videos and share them over the amazing social
networking technologies we've seen evolve in the past years. So Steve,
let's go check you out. Let's see if it's done. It looks like it's done. So
ladies and gentlemen, the debut of the digital Steve. And there he is.

[Laughter][Applause]

Jonathan Strietzel:

Oh, hair? Are you having a problem with that? Well.

Intel CES Las Vegas - January 7, 2008
Page 25

Steve Harwell:I like this thing. This is a mohawk and I had a mohawk back in the 80s.
So I'm going to have some hair -- a mohawk.

Jonathan Strietzel:

Okay. So Paul, he wants some hair. All right. So let's have some funwith some hair.

Paul Otellini:

The man wants a mohawk.

Jonathan Strietzel:

You sure? Okay. Let's give him a mohawk. Let's have some fun withthis here. So there you go. Let's continue this process a little more.
What do you think about that?

Steve Harwell:Some shades.

Jonathan Strietzel:

Some shades? Maybe some jewelry. I don't see any on your face rightnow. So we'll add some shades, provided by our friends over atOakley*. And let's have some fun with this, Paul. What should we givehim?

Paul Otellini:

I think he needs a nose ring.

Jonathan Strietzel:

A nose ring? Okay [not audible].

Steve Harwell:That's a part I don't like because I never had a nose ring.

Jonathan Strietzel:

All right. Let's move over here. I like the gold ring. What do you guys
think? Is that good?

Intel CES Las Vegas - January 7, 2008
Page 26[Laughter]

Jonathan Strietzel:

It looks good. So you come to Bigstage.com, you're going to create thedigital avatar, taking those three simple pictures. You're going to
identify yourself and then you're going to take it into different content
experiences.

Paul Otellini:

That's great, Jonathan, but what can you do with the avatar now thatyou've got it?

Jonathan Strietzel:

Right. So you're going to put it directly into a piece of content. Right?
The simplest form of content we have at Big Stage is called a Big
Stage still image. I'm going to go ahead and open one up. Steve, we
heard that you actually really like to go fast. You like fast cars. You
like cool bikes, especially choppers.

Steve Harwell:

Rock and roll.

Jonathan Strietzel:

So the team over at Big Stage has prepared a cool still image for Steve.
It's a little surprise. I don't think you've seen this yet. And we're goingto load it up here. And it's going to be the digital Steve on a cool bike.
Okay?

Steve Harwell:

Awesome.

Jonathan Strietzel:

Now it's a simple image here, but it's really powerful what this does.
So what we're going to do is let's go ahead and personalize this image.
We'll go ahead and -- we'll be nice to him [not audible].

Intel CES Las Vegas - January 7, 2008
Page 27

Steve Harwell:

My bike actually looks like that.

Jonathan Strietzel:

Oh you do?

Steve Harwell:Yeah. And that actually is scarily -- that looks so much [not audible].

Jonathan Strietzel:

Let me check. Here you go. We're going to go and we're going to benice to you. We'll give you your normal hair. And then maybe we'll
add an expression on your face. Are you surprised in this image?

[Laughter]

Jonathan Strietzel:

Right?

Steve Harwell:I look kind of angry.

Jonathan Strietzel:

Okay. We'll give you a badder look here because you're on this bike.
There you go. There you go. Now this image can be taken. And Stevecan take it to social networking pages. He can put it on a blog. He canput it in an e-mail and share it with his friends. He'll get further
commentary on this image. And this is the nature of what Big Stage
does. Now Paul, I know you have a teenage daughter.

Paul Otellini:

I do.

Jonathan Strietzel:

What do you think she's going to think about that?

Intel CES Las Vegas - January 7, 2008
Page 28

Paul Otellini:

I think she and her friends --Jonathan Strietzel:

No problem?

Paul Otellini:-- would really love this.

Jonathan Strietzel:

Yeah.

Paul Otellini:

It’s not the bike, but it’s good.

Jonathan Strietzel:

Yeah, and if you guys think that's going to be the simplest form, it's
going to be a big deal. I mean, imagine what happens when you takethis to the limit, when you extend it directly into video. Now, what
we've done at Big Stage is we've created an open platform for content
creators, directors, and writers all over the world to create a new formof technology that takes each and every one of you and immerses it
directly into the entertainment experience that you see. So, it's you, it's
your friends, it's Paul, Steve, Jonathan, together in some new, epic
Web short, shot specifically for this new medium.

So, we've got a little surprise for Mr. Otellini here. So, Paul, you’re on
stage with a rock star today.

Steve Harwell:

Yeah.

Alan J. Glueckman:

And so what we've done is we've grabbed one of your old videos,
Steve, where you're rocking out. And we've actually taken Paul'sIntel CES Las Vegas - January 7, 2008
Page 29

pictures that we took earlier, and we snuck this one in of Paul. So,
we've got a disco ball going.

Steve Harwell:This is my first video, actually.

Jonathan Strietzel:

Oh, okay, well, this is Paul's first. This is great, the two of you. All
right. So, ladies and gentlemen, Paul Otellini singing "Walking on theSun."

We've got a little audio issue here. Paul, come on, let's do it, let's do it.
Just do it on the audio side for us. He spoke, and he’s done! Oh, givehim a hand, give him a hand.

[applause]

Steve Harwell:

I was going to tell Paul -- and I’ll tell you guys this, but keep it a secret.
What goes on in this room stays in this room. During that video, Paul
had a really good time, actually. They weren’t faking it. Especiallywith that one person.

Paul Otellini:

Let’s not go there!

Jonathan Strietzel:

No, we’re not. We’re moving on.

Paul Otellini:

You know, what I saw there was pretty cool apart from the fact that I
couldn’t sing. I would, you know, maybe consider switching jobs withyou.

Intel CES Las Vegas - January 7, 2008
Page 30

Steve Harwell:

You mean, I could be the CEO?

Paul Otellini:

It has its moments.

Steve Harwell:I’ll trade you right now.

Paul Otellini:

No…

Steve Harwell:[not audible]

Paul Otellini:

Anyway, that's great. So, Jonathan, when is this launching?

Jonathan Strietzel:

Okay, so, BigStage.com is launching in Q2 of this year, thanks to all
the genius work done by the Big Stage engineers. You’re going to beable to come to BigStage.com, upload three simples pictures with yourstandard digital camera, create the digital you, and put that directly
into your entertainment experiences. And it’ll improve all of yourentertainment in the near future. That’s it. Simple.

Paul Otellini:

Right.

Jonathan Strietzel:

Thank you very much. Thanks, Steve, for your time.

[applause]

Paul Otellini:So, we’ve got your music, we’ve got your jamming, we got you anavatar. Are you ready to go?

Intel CES Las Vegas - January 7, 2008
Page 31

Steve Harwell:

I’m ready to go, you know? It’s like they say, you know, all dressed up
and nowhere to go. But I think I have somewhere to go.

Paul Otellini:

Before you go there, when you and the band used to hang out, where
did you go?

Steve Harwell:Well, you know, my dad was just sick of hearing it every day in mybedroom. So, he was like, move the Lincoln Continental out of the
garage, and that where you’re headed. So, that’s where every band -- I
think every band started in the garage. That’s where we started.

Paul Otellini:

Yeah. Maybe, if you look at the screen, maybe this will look familiar
to you.

Steve Harwell:That's my neighborhood.

Paul Otellini:

And we’ll raise the garage door here. We’ve got your garage band.

Steve Harwell:That's my guitar player. That's my band, right there. Are you guys
here?

Male Voice:How you doin’?

Paul Otellini:

Steve, Intel works with a company called Virtual Heroes. We createdthis realistic-looking, crazy practice area for you and your band. And
then we integrated the band with their own lifelike avatars, using the
Big Stage technology we just saw. So, you know, why don’t you talkto the band?

Intel CES Las Vegas - January 7, 2008
Page 32

Steve Harwell:

Paul?

Paul:

Yeah?

Steve Harwell:

Do you want to rock and roll a little bit?

Male Voice:

I certainly do.

Paul:

Greg?

Greg:

Yeah.

Steve Harwell:Hey, Mitch?

Paul Otellini:

Mitch is quiet.

Steve Harwell:

Mitch is quiet. Thank God!

Paul Otellini:

Do you think you're ready to sing, now?

Steve Harwell:That’s what I do for a living, so...

Paul Otellini:

This avatar thing, you know, usually it needs a keyboard and a lot ofcomputer controls. That requires that you put your microphone down
to do that.

Intel CES Las Vegas - January 7, 2008
Page 33

Steve Harwell:Well, you know, that's the catch, you know, that's what’s cool about
this thing, you know? To be able to create an avatar. And, you know,
to be able to move the avatar around with the keyboard and stuff likethat. So, I’m really excited about [not audible].

Paul Otellini:

But if we could make it real, so you didn’t have to do that -- you
would just stand in place.

Steve Harwell:If you made it easier, that would be better.

Paul Otellini:

Would you like to give that a try?

Steve Harwell:I would try it.

Paul Otellini:

I think we may have solved your problem. Let’s close the garage door
for a second.

Steve Harwell:Bye, guys.

Paul Otellini:

They’ll be back, don’t worry. And I’d like to bring out Andrew
Tschesnok. Andrew, come on out. Andrew's from a company called
Organic Motion*.

Andrew Tschesnok: Hi, Paul. Hi, Steve. Nice to meet you.

Steve Harwell:

How are you?

Andrew Tschesnok: Hello.

Intel CES Las Vegas - January 7, 2008
Page 34

Paul Otellini:

Andrew's company specializes in what's called computer vision. And
what they develop is a technology that allows the capture of yourmovement, to be able to put real time into the computer. Andrew, howdoes that work?

Andrew Tschesnok: Yes, Steve, I think we've got something here that you're going to like.
At Organic Motion we've worked on making it easier for computers tosee people move and understand what they're doing. You know, a lotof you might be familiar with, you know, the ping-pong ball bodysuitsthat people put up in special effects in Hollywood, like the behind-thescenes kind of the digital effects. Well, people had to wear thesecomplicated suits so that computers could track them, whereas, youknow, we've done away with the suit. We've had a breakthrough. You,
simply in plain clothing, can get the same results. Anyone can just stepin front of the cameras.

We've got a system over here set up for you, and we use about 14
cameras. We've streamed the video into our image processor. It getsprocessed and builds a 3-D model and tracks your precise 3-D
movements. We can use that kind of data for many different
applications.

Steve Harwell:That's awesome.

Andrew Tschesnok: That's very cool. Steve, do you want to give that a try?

Steve Harwell:I want to try it. I was going to have you do it, but I think I'll handle this.

Intel CES Las Vegas - January 7, 2008
Page 35

Andrew Tschesnok: I think you might do it better. Yeah. Why don't you go there?

Steve Harwell:

Okay. Thank you. Thank you, guys.

Andrew Tschesnok: We'll finish up here.

[Applause.]

Paul Otellini:

So, I understand your system now is targeted for the professional
market.

Andrew Tschesnok: That's correct. Our system is used by the entertainment industry. It's
used by athletic trainers, by physicians, you know, to generate
animations similar to what we're going to do here. Also, to evaluate
the range of motion in athletes or to, you know, check out people withinjuries and the extent the injuries. We do so because, you now,
without the bodysuit, it's natural, especially for patients: it just makes
it a lot easier process.

Today we’re using Intel quad-core processors. We have a very
processor-hungry architecture here, and we can always use more
power. If we have more power, we can reduce the number of cameras
and we can really see this in the home as an amazing homeentertainment system. Or, you know, say, at your local gym or retailstore, and you could track your golf swing or [not audible] office.

Paul Otellini:

Or Steve's garage.

Intel CES Las Vegas - January 7, 2008
Page 36

Andrew Tschesnok: Yes. Yeah.

Paul Otellini:

Well, that's great. Well, you can count on us to give you more
processing power.

Andrew Tschesnok: Thanks very much.

Paul Otellini:Thank you very much.

[Applause.]

Paul Otellini:

So, Steve, are you ready to rejoin your band?

Steve Harwell:I would love to rejoin the band.

Paul Otellini:

Okay. So what we're going to do now is take all of these technologies
that you've seen one at a time, and combine them into the first-everlive virtual jam session. Ladies and gentlemen, Virtual Smashmouth!

[Applause. Music. Applause.]

Paul Otellini:

Yeah. Thank you, guys.

[Applause.]

Steve Harwell:

Come on, you can do it louder than that. Let me hear you!

Intel CES Las Vegas - January 7, 2008
Page 37[Applause.]

Paul Otellini:

Okay. Thanks, Steve, and thanks to the guys in Smashmouth. I
appreciate it. You know, based upon the technology you saw in action
today, you can see that we're building up the basis for the personalInternet in real time, in terms of the development. Lots of companies
are working on this. I would like to go back and thank Big Stage,
Virtual Heroes, and Organic Motion – and, of course, Smashmouth –for making all that possible. That was the leading edge of what's
possible in the demo in this area, and a lot of work went into it. And I
hope you appreciated it and enjoyed it.

[Applause.]

But more importantly, what we've showed you today was just a
glimpse of what we think reality tomorrow is going to be. The
personal Internet is not just about entertainment. These same
technologies are going to be used to enable better medical care; to beable to coordinate faster disaster response activities; to facilitate
distance learning and distance medical care and those kinds of things,
for both consumers and enterprises alike.

Many years ago, the computer industry was in a similar situation to theInternet today. When computing became personal, the industry
changed. Innovation, collaboration, and standards are what drove thegrowth of the PC industry. The PC experience improved and evolved
over its 30-year history and created great business opportunities.

Intel CES Las Vegas - January 7, 2008
Page 38

I believe that the personal Internet is also following this same path.
You may argue over when this will happen, but I believe it's inevitable.
As the Internet becomes more powerful, more connected, more
context-aware, more natural, more personal, more and more industries
are going to be transformed. Why? Very simply, because people aregoing to demand a seamless experience regardless of the activity,
location, or device they're involved with.

Large portions of the CE industry have been focused on personal
content up to now, in camcorders and photography in particular. I
think that the personal Internet is going to accelerate this change.
Increasingly, the consumer will be the generator of content, with theInternet enabling the distribution. This means that new devices, newbusiness models are needed to take advantage of these changes. And
the change creates a huge opportunity. We at Intel want to work
closely with you as your silicon and computing partner to bring yourcreativity about, and bring about the personal Internet.

I'd like to leave you with a parting thought from Bob Noyce. Bob was
Gordon Moore's partner in the early days of the semiconductor
industry and cofounder of Intel Corporation. And his quote deals withembracing change. Bob said, "Don't be encumbered by history. Go out
and do something wonderful."

They're very simple words that capture the spirit of the humanpotential to drive and to invent. At Intel, we take inspiration from them,and we offer them to you in the CE industry. Now it's time to embrace

Intel CES Las Vegas - January 7, 2008
Page 39

the opportunity before us. Let's go forward and build something
wonderful together. Thank you very much.

[End of recorded material]

Copyright © 2007, Intel Corporation. All rights reserved.
Intel , Intel® Core™2 Duo, and the Intel logo are trademarks of Intel Corporation in the United States andother countries.
*Other names and brands may be claimed as the property of others.
This presentation contains forward-looking statements that involve a number of risks and uncertainties. Thesestatements do not reflect the potential impact of any mergers, acquisitions, divestitures, investments or othersimilar transactions that may be completed in the future. The information presented is accurate only as oftoday’s date and will not be updated. In addition to any factors discussed in the presentation, the importantfactors that could cause actual results to differ materially include the following: Intel operates in intenselycompetitive industries that are characterized by a high percentage of costs that are fixed or difficult to reduce inthe short term, significant pricing pressures, and product demand that is highly variable and difficult to forecast.
Additionally, Intel is in the process of transitioning to its next generation of products on 45 nm process
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programs and pricing pressures and Intel’s response to such actions; Intel’s ability to respond quickly totechnological developments and to incorporate new features into its products; and the availability of sufficientcomponents from suppliers to meet demand. Factors that could cause demand to be different from Intel's
expectations include customer acceptance of Intel’s and competitors’ products; changes in customer orderpatterns, including order cancellations; changes in the level of inventory at customers; and changes in businessand economic conditions, including conditions in the credit market that could affect consumer confidence andresult in lower than expected demand for our products. The gross margin percentage could vary significantly
from expectations based on changes in revenue levels; product mix and pricing; capacity utilization; variationsin inventory valuation, including variations related to the timing of qualifying products for sale; excess or
obsolete inventory; manufacturing yields; changes in unit costs; impairments of long-lived assets, including
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expenses, vary depending on the level of demand for Intel's products, the level of revenue and profits, andimpairments of long-lived assets. Intel is in the midst of a structure and efficiency program that is resulting inseveral actions that could have an impact on expected expense levels and gross margin. Intel’s results could be
affected by the amount, type, and valuation of share-based awards granted as well as the amount of awards
cancelled due to employee turnover and the timing of award exercises by employees. Intel's results could be
impacted by adverse economic, social, political and physical/infrastructure conditions in the countries in which
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affected by adverse effects associated with product defects and errata (deviations from published specifications),
and by litigation or regulatory matters involving intellectual property, stockholder, consumer, antitrust andIntel CES Las Vegas - January 7, 2008
Page 40other issues, such as the litigation and regulatory matters described in Intel's SEC reports. A detailed
discussion of these and other factors that could affect Intel’s results is included in Intel’s SEC filings, including
the report on Form 10-Q for the quarter ended September 29, 2007.