>> rose: welcome to the broadcast. tonight, paul otellini it here. he is president and c.e.o. of intel, the technology giants, whose microprosors power about 80% of all computers. >> increasingly my competitors are asian companies and they're operating with half the taxes we do. that means they can have either twice the profits or double their investments. and it's-- it's going to happen in industry after industry. we've seen it in cars. we've seen it in cell phones. that's all manufactured outside the u.s. today. i think we're going to see it in other industries. >> rose: jenny sanford helped launch and shape her hutz's political career as his longtime campaign manager. she tells her very personal story in this memoir, "staying true". >> me always, in my respect, in my mind, governed with an

intechrity and a focus on the things he originally campaigned on, things he believed. but in that process, he somehow lost sight of some of the values we had shared. ♪ if you've had a coke in the last 20 years, ( screams ) you've had a hand in giving college scholarships... and support to thousands of our nation's... most promising students. ♪ ( coca-cola 5-note mnemonic ) captioning sponsored by rose communications

from our stud)os in new york city, this is charlie rose. >> rose: paul otellini is here. he is president and c.e.o. of intel, the technology giant whose microprocessors power about 80% of all computers. the company earned $35 billion in revenue last year, and as the global economy has stabilized the company's performance has exceeded expectations. but intel also faces a string of anti-trust lawsuits filed by regulators until the united states, europe, and asia, and like many faces a rapidly changing marketplace as consumers migrate from personal computers to mobile devices linked to the international. they're locked in global competition to make smaller and smaller chips that use less and less energy. i'm pleased to have paul otellini back on this program. welcome. >> thank you, charlie. >> rose: so tell me where you see the technology sector.

>> i think technology seems to have led want slope in, in terms of getting hit in the fourth quarter of 2008 pretty hard. and then, now seems to be snapping back. and it's not a broad-based tech recovery. i think you don't see corporations yet buying its consumer base. p.c.s actually grew in units in 2009. probably the only industry in hardware that grew. cars didn't grow. phones phones shrunk. televisions slunk. p.c.s grew. and i think that's because p.c.s are indispensable. but it wasn't corporations. it was individuals buying notebooks and less-expensive net books on a worldwide basis. >> rose: so where are we then in terms of the global recovery and the future. >> there's a good probability, baring some major economic setback this year, that tech will have a good year. i think the consumer business

will continue to be very strong, driven by asia in particular. i think corporations will start to refresh their hardware based upon security issues, based upon return on investment issues, based upon just recycling old hardware that's now four, five, six years old. the economics of keeping that harold wear running are less than buying new ones now. so you could set yourself up fair fairly optimistic view of unit growth this year. i think competition will continue to be strong. pricing will continue to be tough. but unit growth will happen. >> rose: some predict we are looking at, in terms of the u.s. economy, a kind of new normal, that unemployment will not get down to the levels it was earlier before the prices, and secondly, economic growth will not reach the level that it did before. so we may be going along at 3%, 4%, and china will be going along at nine or 10 or more. >> we saw some of that in the 90s, you know. i do think that job recovery

will lag, and i think that every time-- i've seen a number of recessions in my career. people use it as an opportunity to try to be much more productive coming out of it and try to let revenue grow and grow profitaise bit while you absorb the existing expense base the companies have. we're certainly one of those companies. we happen to have had the fortune to resiss the company prior to the recession so we were able it ride it out pretty well. others, i think, were take later action. in terms of the u.s. job market, one has to ask what jobs we're preparing our students and our children to do. and i don't think we're doing the right kind of things to make sure the jobs we'll need in the 21st century are going to be filled by people coming through our school systems. >> rose: so what should we be doing? >> math and science. much more-- much more focus on that, much more focus on the industries of the future. you know, we're not going to build everything the way we did in the 50s and 60s. the world is much more flat in

that respect nowadays. but i think that we have to figure out what we're good at. companies will have to figure out what they're good as to succeed. countries have to do that as well. we have a wonderful entrepreneurial spirit in washington in this country. one of the things we're talking about in washington is trying to revitalize capital with invest in america. that can drive start-ups. small business tend to hire 40% of engineering graduates. it's not the big companies like intel. it's the small companies that grab a lot of graduates. if we can have an environment where start-ups can do well, then i think you'll start seeing the jobs created to pull the employment--. >> rose: can we maintain a manufacturing base here? >> for some things. intel, for example, maintains a very large manufacturing base leer. 75% of our manufacturing is inside the u.s., even though 75% of our sales are outside.

and woe do that because of the scale, because of the workforce we have here and the investments we have here. but it's a knowledge-based workforce, even inside of our factories. you know, i think if it's-- if it's just assembling solar panels, that's going to get done in china. assembling-- i was in germany last week and the germans were complaining all the windmill production has shifted to china njt right. >> even in some of these green industries, you need to be able to be competitive on a global basis. >> rose: but are you encouraging companies to encourage the hiring of math and science students, even though they may not have been inclined to do as much. >> well, i started thinking about what could one company do. last year, this week last year, i went to washington and announced that intel would invest $7 billion in the u.s. in new factories for our latest generation of technologies. i was hoping that would be a vote of confidence in the economy that would resonate with other companies. a few companys did. general electric made some large

bets after that. this year, i'm coming back to washington to talk about that. and i wanted to think of what we could do. we looked at retraining exercises, and there's a lot of people working on that. there were two holes we found. one was in college graduates, particularly in math and science engineering graduates. unemployment rates are very high there. and so i said let's just take something simple. let's get a bunch of tech companies to commit to at least double their hiring in '10 versus 9. and we now have a large number of companies, and we're committing-- just-- just this group of tech companys-- to 11,000 jobs. that's a lot of college gradz. and if we can do that in technology, other companies are can as well. the other was to focus on start-ups. so we got a venture capital alliance as well, and we have now raised over $2 billion in the invest in america alliance,

for start-ups in green tech, biotech--. >> rose: seed capital for new companies. >> to 1,000 companies, right. >> rose: let me go to the other idea. you took three plants, one in oregon, one in new mexico, one in somewhere else-- >> arizona. >> rose: and basically said we are investing in america. unique advantages for doing it in the united states so you don't need as much considerations as you might expect. >> it's a bit of both. on one side-- the recession gave us less-robust demand environment so retoo long existing factories, using the resources, equipment in particular, for older factories and new factories, using the employee base that wasn't fully utilized during the recession, to move from the older factorys to new fact reas, made it a very expedient decision. on the other hand, if i was building a factory from zach, a greenfield site, it's about dwl 1 billion more expensive to put

a factory in the united states than anywhere else. >> rose: how much of that is to do with labor costs? >> virtually nothing on labor costs. on taxes and capital. >> rose: you are encouraging the united states government to use its tax incentives for the development of business in the way that most other countries do because you argue that the american state and federal tax rate it is larger than almost everybody except one. >> yes, i do. and there's really two things. i don't think the united states government ought to have an industrial policy where the government picks the wining and losing industries. i don't think that's the right thing. but i think that having a general policy around encouraging investment, particularly in r & d, the life blood of where the 21st century industries are going to be, is, i think, important. i was in france last week on this trip, and i met with christine lagard, the minister of finance. she told me if i put a factory, r & dfactory in france they'll

pay for 50% of the r & d. the prrx an dtax credit is down to 20%. that's a big difference. >> rose: 20% tax reduction on every dollar you spend. >> versus 50% in france. so it makes you think about where you want to put your next jobs. >> rose: given the difference in a 20% tax on-- for r & d, versus 50%. that's not a climb. that's a policy. that's a position. that's a number. >> and the way you create climates is to look at what the world's market for, you know, for investment is. and and that is different than deciding that we should subsidize semiconductor chips as opposed to wheat. >> rose: it seems to me what you want to see is an enlightened government that wants to create a climate and wants to take policies, encourage policies

that will increase our competitive ability. >> yes. starting with education. >> rose: right, doing what in education? >> accountability. focus on math and science. even things as simple as immigration policy. you know, when you talk to the folks in washington, they are so mired up in dealing with the holeistic immigration problem we have, that they can't see the difference between the graduate students coming out of the very best u.s. schools who can't get a visa, and so they go back to their home countries. and we lose the talent. last year, the high-tech visas ran out in april. and i understand the need to solve the bigger immigration problem--. >> rose: is that-- >> but you need--. >> rose: go ahead. >> you need to separate the two. >> rose: is that an aftermath of 9/11, or is it something else? >> no, this problem going goes back a number of years. >> rose: why? what's the argument that keeps

that kind of limitation on visas? >> i think there's a difference between-- the government has historically not been willing to differentiate between person "a" and person "b." it's a fairness deal. this graduate from m.i.t. is maybe not so different from this immigrant from greece coming in on the boat. it's hard to say this person will be more important to our future than the other person. i understand that difference. but i also understand the fact that until we can get to the point where we can fill up our graduate schools with people that have grown up here, which we can't do today, we have to be able to take the people that go through our education system and allow them to work here because they want to work here. >> rose: what does the president say to that? >> i haven't talked to him about this. i talked to the congress about this. and they're saying i cannot solve one part of the immigration problem without the other. you understand it's a political issue. and i say, "you understand it's an issue about our future. you can separate these two." >> rose: there are some

interesting numbers about competition, this country, where it stands, versus other countries. both in terms of how innovative we are, how competitive we are, and also where do we stand in terms of the top 40 looking at the base? >> a recent study that looked at a snapshot-- i think there were six, we're number six out of 40, which is not so bad. but when you look at the first derivatives, all of the things that are going on today that will affect the future competitiveness, we're ranked dead last, 40 out of 40. and it doesn't take much to change one of those. the other factoid i picked up in researching this was that the-- some economists think if the g.d.p.. -- if we just double the number of math and science graduates that we have, coming out of our schools, the g.d.p. would improve by a third. the productivity of the engineers historically is so good, in terms of driving

economic growth. >> rose: why does this issue have any political dimension to it? >> i think-- i think because it requires that you admit that there's trouble. it requires that you say what's wrong. it requires that you probably make some priority decisions, which politicians are historically loathe to make. it says i'm going to favor one group over another or one sector over another. we typically don't do this that in this society. >> rose: tax this group and not that group. >> it also says-- it also recognizes-- i think in general our politicians don't travel the world as much as our businesspeople do. and so they don't really see the competitive threat we're facing. >> rose: what else do we need to do to be more competitive? >> i think the corporate tax rate is one that needs to get looked at in terms of do wupt to intent vise companies to grow here or not? where do you put your next factory? there is a double taxation philosophy of corporate

individuals. i don't think we want to get into that today. and i'm not an expert on it. but i do think that when you look at a world-- when i look at my competitors, increasingly my competitors are asian companies and they're operating with half the taxes that we do. that means they can have either twice the profits or double their investments. and it's-- it's-- it's going to happen in industry after industry. we've seen it in cars. we've seen it in cell phones. that's all manufactured outside the u.s. today. i think we're going to see it in other industries. >> rose: but you still believe that there is-- the reservoir of skills and competence and values that can enable america to be competitive. >> absolutely. i think our workforce is by far the best in the world. the kids that are coming out of school are the best and the brightest, the most creative that i've seen anywhere in the world. they're very good at lateral thinking.

they're very good at problem solving. they're very mature, relative to the tasks at hand that we give them when we hire them. and i would rather employ them than any other workforce right now, simply because of their productivity. and yet, it's more expensive to operate here but not terribly so. our engineers at the lower levels in the united states don't make a lot more than the engineers in india today. because of the wage inflation that's happened there. >> rose: are you satisfied with the leadership that president obama is providing on this subject? >> there really hasn't been much on this topic. he gave a speech last year on competitiveness that had the right words, but i think washington's gotten caught up in the sort of health care swirl recently, and that's consumed all the energy njt the stimulus program has gotten some criticism because it said that the benefits were delayed, and what we needed was. programs that would create jobs immediately. >> completely agree.

i think the bulk of it is 50% in 2012 or something like that. yeah, i mean, i compare that to our contrast that to what i saw in china which was a less large number but spent mostly over 12-18 months. and you go to china, and they did two things that are i think quite striking. one was instant tans credit to individuals to buy consumer electronics or white good. people could buy washing machines. this is because the u.s. market dried up. they wanted to keep the factories working and they--. >> rose: they created consumer demand. >>... including p.c.. they're building 25,000 kilometers of high-speed rail. we're talking about connecting tampa to orlando, and they're connecting the whole country. >> rose: some would argue they have a different political system that enables them to do that with that kind of velocity. >> they said let's spend it early and let's spend it on things that are lasting. and our spending process pushs

it out over way too many years. >> rose: was it larry summers said let's make it timely, temporary, and targeted. >> we didn't get that. >> rose: let's take intel for a second. tell me where you see-- and you should see it because as you mentioned, all the venture capital student opportunities you see-- where is the technology world going? >> no one knows for sure. my guess is we're building out what i call a continuum of computing, piece by piece. computing is entering every spectrum of kind of our lives, both from the entertainment standpoint and work standpoint. you're just-- just like your cell phone got smart. your television's going to get smart in the next few years. your car-- i was in germany meeting with the auto manufacturers, driving a car with 3-d maps, taking internet information, overlaying it over the maps and giving you real-time feeds on what you want

and where you're driving. almost compelling enough to take your eyes off the road, perhaps. but very interesting. so i think all of these things are going to be connected, virtually everything that's electronic will be connect to the internet and have a brain. and what we can do if we do it right is have common user interfaces for people because people don't like learning a new thing for everything they do. it's going to have to be simple, intuitive, and useful and pro active, and give us the information we want. and in terms of inintel's role, i think we have the chance to power every one of those units. >> rose: and they have the kind of margins that you need and the kinds that are consistent with the margins you had in powering p.c.s? >> yes, in particular-- what we found with this new chip we introduced 18 months ago called atom, it was the first time in the company's history we used the most advanced technology we had to build the smallest microproducer we could. and the cost is very, very low.

the margins on the chip are extreme good. they're as goodas some of our mainstream p.c. products. as we go to further generations of that, cell phones and televisions and cars, the margins are going to be quite good because we'll use more to more's law--. >> rose: more's law is still in effect? >> yes. >> rose: is it the the same number, 18 months. >> for us it's deployment in two years. every two years we crank on a new generation of silicon technology. >> rose: when you talk about a smart phone. it sells for $100. how much can you afford to have the same margins in that kind of technology? >> it's the "make it up on volume" argument. >> rose: does it make it up on volume? >> yes, that's certainly true. the silicon in the high-end smart phones, the communication subsystem and the applications sprs about $35 or so, give or take $5. if you can build that for $10. that's a good business.

if you can sale 200 million or 300 million or 500 million. a billion, two phones are sold a year. they'll all eventually connect to the internet and that's why we're aiming at that business njt what's the next big idea in technology, do you think, or in terms of the internet-- >> i think recent want events have given us all a wake-up call on security. i think we need to do a much better job of protecting people's privacy, corporate assets, government assets--. >> rose: this is google and china? >> everything. the whole notion of-- everything from credit card fraud to phishing, to state-sponsored cyber-attacks, in the case of georgia last year-- or the year before last. and the latest stuff with google. all of that suggests that we need to do a hardening of our systems in a way that-- you can never stop this, but a combination, i think, of much more robust hardware and much

more robust software can minimize it and allow us to stay one step ahead of the bad guys. and i've given our company a charter to make this job one. let's go do a much better job of this in terms of making the hardware much more defensible, both in the cloud, in the server space, but also on your p.c., and ultimately, your smart phone because as the smart phone becomes your prime machine--. >> ubiquitous. >> in fact, when it starts allowing to buy things off of it using the sim card, you don't want that hacked njt how are you going to prevent that? >> you can make it just so hard that you need massive amounts of computer power to crack that. an individual in kazakhstan will have a harder time doing it. breaking some of the passwords, as was talked about in the google escapade, there were some super computer-like efforts spent on that--. >> rose: do we believe that came from the chinese government or chinese companies or criminals in china? >> i don't know. i think the jury is out on that.

>> rose: the jury is out. do you think google made the right decision? >> i'm on the board so i can't eye shouldn't comment on that. >> rose: but my understanding from google, that they are now in conversations with china and there is not some decision not to come back to china, not to stay in china and go back to where they were. >> nothing's ever final in china. and you can't really leave the world's largest market at the end of the day. >> rose: and maintain your own competitive position. >> on the other hand, you need to find a way for two very strong parties interested. parties to work together. >> rose: but it seems to me that the dimensions of it suggest that it had to be somebody with a lot of-- >> with access. >> rose: access, exactly. a long time ago, when gordon moore and andy grove were running intel, they had this idea calling win-tele. intel is in the business of

microprocessors, and windows is in the world of computers. >> the world was always biger than that njt and when they got into each other's territory, somebody would loudly scream. >> probably. but those days i think are well over. there are a lot of areas intel has to move into for strategic reasons where there is no microsoft operating system that runs on intel, like phones. and so, therefore, we have to do something like linux on our products. we're not going to miss a market. on the other hand i'm quite confident microsoft will develop a phone-based operating system for us at some point in time if we have the success we expect to have. they won't want to miss the market, either. these things tend to go in cycles, number one. number two, we've always had

software as a company. a lot of it was invisible to users. the things that make your graphics cards work and your multimedia work on your p.c., and those kinds of things. and that was probably in the range of 5,000, 8,000 people. and in the last few years, we've really beefed that up. we've made a couple of acquisitions, the largest being wind river, kind of a real-time operating system for embedded systems. and we've added some-- our own capabilities. we're well north of 10,000 people on product-related software. as a company in both operating systems and infrastructure. you won't see us doing applications, per se. that's the rest of the world's job. >> rose: right, right. does that surprise you how rapid applications have taken over the the world of phones? >> yeah, it was. it really-- it was-- it's wonderful. just when you get impatient to have the next large release of something coming out, because you're waiting for the next version of x, y, z, you start

seeing now six guys in a garage developing a wonderful aplet that helps your life that can run on your phone or net book. to me, this is the future of a lot of where the computing industry is going to go. there's some downsides to that. things may not nearly be as robust as you'd like. they don't have quite the quality. but they're not mission critical. they're fun. and i think it's important that we make computing fun and easy. >> rose: okay, but you said this is where computers are going to go. tell me what you meant by that, meant by that smart phones and thousands of applications or ipads and thousands of applications-- not only thousands but hundreds of thousands. >> and your p.c. and your car and your television. you'll be able to walk with the smart phone, and it will be the smart phone du jour. and the applications on your smart phone or net book, and you walk into your house, lob your television.

and when you walk into your car, they'll be on your car. >> rose: when will that be? >> within five years for sure, maybe sooner. in fact, there are products that do that in a rudimentary fashion introduced mid this year. >> rose: let me move to other things that interesting me, too, in terms of where we are, and it is the power of emerging markets. we look at their growth rate. we look at more people, because of china, having into the middle class in the history of civilization. >> china is already the second-largest market for computers in the world, and will pass the u.s. within three or four years. >> rose: the largest market for cars? >> the largest market for almost everything. >> exactly. that's my point. >> yeah. but who would have thought that a few years ago because computers are not cheap, in the grand scheme of a chinese average income. >> rose: explain this to meue would know the answer to this. the largest market forars and computers-- go ahead. >> what caused p.c.s to take off in china wasn't the government

and wasn't schools. we've been in china 25 years now. what caused p.c.s to take off in china was the aspirational goals that parents, particularly with one child, had for their children. and very often, it was two parentss, four grandparents, one child. so they would pool their money, even five, 10 years ago, and buy a computer for their kid. because this is the way of the future that they saw their children being able to get into engineering and into the colleges. >> and be more successful and everything else so they can go to any college they want. >> the whole aspirational quality has not left the system. >> rose: do you see any restrictions on china? sometimes people talk about china is going to have this bubble or that bubble? >> well, nothing can grow at 15% forever. >> rose: right. >> will they be the world's largest economy? yes. >> rose: clearly. earlier than 2050. >> earlier than 2050, i think you're right. will there be a bubble? probably. all large economies have

bubbles. i don't know if real estate is theirs or not. the bubble in the real estate tend-- the overbuilding in the real estate tend to be in the coastal cities for the most part. >> right. >> and there is still a tremendous desire of people to move from the suburban areas, the agricultural areas into the cities. i think at some point in time, that housing gets filled up. it may not get filled up at the prices it thought about, but it will get filled. there are a lot of people that want to live in those big cities. >> rose: you do have an idea that they understand that. they're aware of that. >> they're not in a hurry. so, yeah, i do think they understand it because they understand that their timeline is much different than a four-year cycle of a politician, for example. >> turning to some of your own issues at intel, other than developing the right products

for the future. anti-trust questions. where do they stand? >> process-wise, we are apealing-- we responded to the european commission. we paid our fine, or respond--. >> rose: is that the largest fine in the. history of the european commission. >> it was. a billion you're oz. the largest single fine. the cumulative fines on others have been larger. >> rose: one single fine. >> by the way, europe when i was there last week, i find out, under nellie crow's regime, 70% of the fines, the dollars were you're organization were levyed on european firms. we have this view they picked on their own firms as well. but-- so we have to appeal that. >> rose: they have a different mindset about anti-trust than the united states or the justice department does here? >> maybe. the d.o.j. has had a view of anti-trust competition for 60 years that's been very clean and very consistent. and it is what is in the best interest of the consumer? the ultimate test of the abuse of market power is, is the

consumer harmed? and i think in microprocessors there's no chance anyone could argue consumers got harmed. micro roprocesss have dropped faster than any other product tracked over the last 25 years in terms of price and bang for the buck. europe has a different philosophy, which is what's in the best interest of the competitor. on the theory that ultimately, it's more competition that will be better consumer results. so they get to the same point but they look at it differently. that works, i think, in some industries, like commoditys, or steel. it doesn't work in technology. technology works in reinforcing cycles, on standards, and when you have a standard-- whether windows standard or oracle standard-- the ability to exploit that is the key to intellectual property and how the country-- the companies are going to perform. so they have a different view, and we have to appeal that one. the interesting thing with the

f.t.c. action in the u.s. against intel, is they said, in the first paragraph, that they don't like the way the judges in the united states have been interpreting the law in the last couple of decades. and they want to use a different part of the f.t.c. charter, section 5, to go after a firm like intel. so it's a litmus test. and they want to try to move the u.s. view of anti-trust towards the european view, which is pro competition versus pro consumer. and i think-- i think we'll have to go talk to them about that ultimately. we settled our big suit with a.m.d. and a lot of their complaint had to do with a.m.d., so you're wondering why-- why-- why you're doing this, given that it's been settled. >> rose: are the europeans receptive to-- do they listen? >> no. >> rose: they do not? >> no. and in fact, the economists this week has a wonderful editorial on the lack of transparency in a

system where the commission is judge, jury, and executioner. we don't have that here as a process. in all the stuff in europe, we've never yet been before anyone except the team that brought complaint. never had a judge. never had a fair hearing. it's not a trial the way we think about in the united states. and you get to that point at some point, but it takes many, many years. >> rose: to make your case. >> yeah, to even have the chance to make your case. >> rose: that's what i mean, the chance to make your case. >> they certainly did not listen. >> is it your impression they win in the end? >> well bi don't know. i hope not. you know, at some point, you have to decide, you know, is it worth it? >> rose: is the market worth it? is injurying the market worth it? >> you can't withdraw from europe. >> rose: so you need to be in the market so, therefore, is it worth it to do what? >> then it gets down to the

remedies, and so far the remedys are-- we're complying, and they're manageable, but i like my billion euros back. i'd like a clean slate. >> rose: you came to this job without-- not being an engineer, correct? >> correct. >> rose: andy grove was an engineer. everybody had been an engineer, all the guys that preceded you, all the people that preceded you. has it been a hinderence to you? >> no. i've been managing engineers since the-- since 1980 at intel. large groups of engineers. first of all, i think that you can learn the technology by osmosis. you're not going to ask me to design a circuit. that would be a dangerous thing. >> rose: or to write code. >> i think very often, it allows you to ask the dumb questions, like so why-- who's going to buy this feature? why do we need to add this feature to our silicon?

it adds cost. how does this work? how does a real person use this? and those kinds of questions can-- can really change things. i can remember in 20-- late 2002 before we introduced sen treen oh, i had this view that a new laptop without. wireless would not be very interesting. this was before wifi was popular. i made the decision to hold up our new chip for laptops until the wifi chip was ready and we created sen torino. >> rose: right, right. >> and the engineers thought i was nut. >> rose: this is a classic case. i know about this. >> but the market exploded. the laptop--. >> rose: so the nonengineer was right? >> it's not a nonengineer. it's listening to the markets, listening to where your customer-- what's the useage model. i like to think that everyone every c.e.o. of intel has brought a little bit of something to the stew. bob was this wonderful entrepreneur. gordon was. law.

andy was actually--. >> rose: a great manager. >> he was a management guru. >> rose: when you came they said you were the product guy. >> and i was the product and marketing guy. >> rose: you understood what the consumers wanted. >> or we tried to. >> rose: or tried to. >> and i think that's helped us, and it's helped us move out of the high-end and into these new, affordable high-volume markets. >> rose: i ask this often. "fortune" magazine said steve jobs was the best c.e.o. of the last 10 years. when you look at apexpel what he has done there, what are the two most important reasons they have been successful in the way that they have? or one or three? >> i think it's a maniacal attention to who he thinks his market is. he defines his market very carefully in terms of the people that would like products that he builds for himself. you know, i asked him once, you

know-- i described to him the focus group process we use at intel for customer testing. and i said, "what do you use for a focus group?" and he started laughing. he said,, it's us. if we don't like it, none of our customers are going to like it." and i think that's a--. >> rose: he has a golden gut, in part. >> not just him--. >> rose: the people around him. >> the apple team. and i think that's a good litmus test for where the company has been. the other thing he's done is he's not been afraid to challenge other people's industry. what he did with music i think is a classic example of that njt and television. >> and we'll see what happens with print. television, too. >> and tv. >> rose: so looking at the future in terms of the convergence of everything, everything is going to be on everyone device. that's where we are. >> yup. >> rose: you can access everything in your car, in your phone, in your p.c. what's going to become obsolete?

>> ignorance. >> rose: time. >> ignorance. you'll know everything you need to know on a pro active basis. >> rose: you plac a speech at brook necessary which you lay out some of the arguments about competitors, with respect to the united states, and with respect to policies that you believe would make this country more competitive. if they don't happen, where does that leave us? >> as a country? >> rose: uh-huh. if we're not prepared-- >> it leaves us in suspended animation until we wake up and fix it. you know, we're on a kind of secular decline. in terms of virtually every standard. household income, lifestyle, qaults of life. until-- i'm quite convinced we have the capacity to fix it. until we do, you're not going to change that curve. >> rose: we have the capacity but perhaps not the will?

>> well, will, and organization and--. >> rose: prescription? we know the prescription, too. >> well, a lot of it you do know. you know what other countries have done and i think we know in our heart what we need to do to fix the education system here. we haven't had the will to do it. and it may take the bankruptcy of a state like california to have us stare into the abyss enough to do some fundamental fixing. i'm watching-- i'm a californian lifelong californian, watching what happens there. this was the richest, best state in the union. and it's been driven into basically insolvency in the last 30 years. >> rose: do you think this president listens to these arguments and listens to business and listens to people like you? >> i can-- i can say that i've had more conversations with his people in the last year than i had with the prior. administration in eight years. so far, the concerns and the

ideas haven't broken through. >> rose: meaning they haven't done anything. >> but i think they are acutely aware active, and they have their sense of prioritys, or game plan. it's almost like watching a super bowl. and they want to do this, this, and this in a certain order, and sometimes you need to i don't know, do an audible. >> rose: thank you. >> you're welcome. >> rose: paul otellini, he is the c.e.o. of intel. >> rose: the story of south carolina governor mark sanford captured the nation's attention last june when he admitted to an extramarital affair after disappearing to argentina for five days. >> i've been unfaithful to my wife. i developed a relationship with a. -- it started as a dear, dear friend from argentina.

it began very innocently, as i suspect many of these things do. in just a casual e-mail back and forth, in advice on. there. recently over this last year it developed into something much more than that. and as a consequence, i hurt her i hurt you all. i hurt my wife. i hurt my boys. i hurt friends like tom davis. i hurt a lot of different folks. and all i can say is that i apologize. >> rose: sanford had been married for 20 year to his wife, jenny, former investment banker. jenny sanford helped launch and shape her husband's political career cas his longtime campaign manager. but unlike several other high-profile political spouses of late, she chose not to remain with her husband after the revelation of his infidelity.

she tells her very personal story in this memoir, "staying true." i am pleased to have her here at this table. welcome. >> thanks. thanks for having me. >> rose: at this place, what do we learn if your experience, both in terms of a marriage, in terms of infidelity, in terms of the choices a woman makes, and. how one reaches the wise conclusion for them? >> you know, we learn a number of things. to start with, marriage is difficult. you know, meshing two lives together that have different childhood experiences, different families, and in some cases, different faith, you know, how you make those work together and overcome, you know, the highs and lows of a partnership that is meant to last for a long time is complicated. and then you layer on top of that children, you know,

stresses, work, illness, health, all sorts of things. marriage takes work, and it takes a real commitment. and for any marriage to last a long time i think there needs to be a shared commitment. what i learned specifically about this process is that at some point-- in our marriage, for example, and i suspect it's true in almost all marriages-- you can survive the differences in the personalities or the circumstances as long as you share common values in many respects. in our case, we had very consistent values. we tended to appreciate the same things from a ground standpoint, if you will. and so whenever we had disagreements, we would also always come back to kind of common themes to overcome those or to work through those. and over the years, as i-- as i grew more... fond of mark and more proud of him as he rose in his political career, i remained proud of him,

and i continued to do so today for his ability to stick to his political principles and the things he had campaigned on. he always, in my respect-- in my mind-- governed with an integrity and a focus on the things he had originally campaigned on, things he believed. but in-- in that process, he somehow lost sight of some of the values that we had shared, and that contribute to the breakdown. of our marriage. >> rose: what did he lose sight of? >> things like honesty. that was something we both felt was very important. i mean, it's very difficult for a marriage to survive if there's dishonesty and broken trust. that's one of the basic things we had shared. in fact, i think i spoke in the book at some point about mark created what he called a family constitution. and he talked about the values that we held dear-- honesty, integrity.

>> rose: when you found out he violated those, what's his explanation? >> you know, it's interesting. this was a whole process. so when i first found out, i took it as-- as, you know, he said some things-- first he said it didn't mean anything. and then he said well, i'd been so good for so long. my initial instinct right away was to immediately forgive and work towards reconciliation. but reconciliation is deeply personal. you have to work at it, and it there has to be the right spirit on both sides. and i found out in time in fact he was still deceiving me and he still wanted to see her and then he started asking me to see her. and the sum total-- njt he started asking you for permission to see her. >> for permission to see her, right, which i did not grant. the sum total told me this is the guy who did not have the same values he held before. >> rose: he thought he could do that, that he could have both? >> frankly, i don't know what he thought. again, this is-- it's fascinating when you live with somebody for 20 years.

you know, in many respects of his life, i thought i could literally answer his sentences i knew him so well. and yet in this case, i was clueless. i felt as clueless as he was because, you know, the notion, a., that he would ask permission to see his lover was unconscionable to me, and the notion he would do so and not understand how it would hurt me was also unconscionable. he had become clearly disconnected from nthat sense. and from all outward appearances and the ability to conduct his job-- in the other respects he seemed to be the same person he had always been so i was thrown for a loop. >> rose: that's one of the questions about it. people say private conduct has nothing to do with public conduct. do you believe that is a false principle, that that you dough privately has nothing to do with your abilitys as a governor of a state or president of the united states or political candidate?

>> no, i think it does have something to do. it has a direct. bearing on who you are. so--. >> rose: it's character. >> it's character. so does that impact the way you govern? it has to at some level. but... you are you-- you're either a really good person who is focused on certain values or you're really not. and i still continue to believe that mark is a man that actually focused on certain principles because he in every aspect of his life that i thought-- he focused on it and he's lost something. now, can you get it back? so, yes, i do think it is part of your character. character is something i think you have to constantly work at. and somehow mark lost sight of either his ability to work at it or how successful he was--. >> rose: what was that about? i mean, because he used terms that must have broken your heart like "soulmate." >> without a doubt it broke my

heart, right. >> rose: you're not my soulmate even though we've had this life together, even though i wouldn't have been what i am without you, even though we wouldn't have had these kids without you. somebody in argentina is my soulmate. >> right, really hurtful. >> rose: system just the idea-- at the beginning of the marriage there was notions of certain vows not wanting to include. >> which, looking bark, obviously, you put the pieces together. but, again, make is a quirky guy. and that's an example right there. when he said that, i said, "then we shouldn't get married." that was exactly--. >> rose: but he wanted to get married. >> he said i want to get married. it's only you. i said, no, marriage is a vow of fidelity. the words you speak at the ceremony-- i've been to plenty of wedings where "faithfulness" is not part of the vows. you can choose whatever words but i'm not going to marry you unless you're committing to be just with me. we talked long and hard about that. at the end of very long conversations about that, which

started when he said, "i want to use this vow instead of that one." let priest gives you a menu. it's not like he took something out. we chose one that didn't have that in there. you know, obviously now that this has happened, you know, you look back and you feel like you're a fool. but at the time, i took it as very honest and open. i know a lot of other people who in their 20s, you know, at that time, were already cheating on girlfriends and things and they get married and don't have an honest discussion like that. it's pretty likely they're going to continue to chinatown because that's a part of who they are. mark wasn't like that. he was kind of a clumsy, innocent, you know, guy with women. and frugal and he hardly knew how to kiss a girl. i had my own vows. you have to make that leap of faith, and that's where the commitment part comes in. you have to work at it to overcome those doubts and create a lasting relationship. but the last thing i really had a doubt about-- my doubts with respect to mark were about different things.

they were about what's he going to be? how is he going to earn a living? the last thing really i thought this gifs going to be was be unfaithful. even with a conversation like that, you know.... >> rose: what does this do to you in terms of-- and this happens to lots of people, obviously-- in terms of asking yourself what is wrong with my judgment? what was wrong with my own. ... >> you know yif thought long and harded about that, what was wrong with my judgment. but i doint think anything is wrong with my judgment. i still believe he fundamentally is a good guy and has somehow become a little bit off centered. >> rose: he's a good guy that something happened, a woman-- >> a woman or a weakness. we all have weakness. >> rose: and the weakness is...? >> obviously, obviously, in this case, the weakness was centered around another woman or centered around an inaublt to really remain connected to me. >> rose: so what's next for you? >> i don't know. i don't know. >> rose: and that's an

interesting and liberating thing? >> in some respects, yeah, it is. you know, i've long-- i put a career on hold, certainly--. >> rose: you were an investment banking. >> in the investment banking, and i gained campaign experience. you can look at that as something added to my resume. i didn't sit idle during our married yirz. but politics is not my love. so i've long tried to instill capitalistic values into my boys in hopes that some day one or a couple of them at least will think to get into the business world. and i've long thought once we were out of the public eye that i would go back to work, once the kids are settled in something,un, settled back at home. so now-- now i have probably greater possibilities, but i also have greater challenges because kids probably need me to keep an eye on them until i know they've kind of weathered the storm and until we've moved on into a new normal routine, if you will. does that make sense? >> rose: yes, it does. where are they today?

>> we've moved back to sullivan's island. marshall, our oldest is a senior in high school and so he's looking into colleges and hopefully will be shuttling off somewhere in a number of months. and, you know, with each day we're slelted there, they're happier now in their new school. they're doing fine at school. but i'll watch them to make sure they're settled before i really jump myself into something else. this took my focus for a little while and it's, obviously, stirring some things but i hope it's helpful in the long run to some people out there who need not to lose a sense of who they are if their world is crumbling or if they face challenges that are unexpected. i hope it will help my boys in time. but i'm not naive to think-- they want everything to just quiet back down again. and it will in time njt some normalcy. >> once we get to that-- i'll know when the time is right for me to layer on something else in my life. and i look forward to it. there's something kind of exciting about looking back and not having regrets and looking forward and-- to a completely unknown future and really not being fearful of it.

>> rose: and there is this, also i assume, part of the fact you've gotten so much mail is because you took the actions you did, which seemed true for you, which workdz for you. on the other hand, there is the story of elliot spitsser and his wife, which seems true for her. >> for her, right. >> rose: the lesson that comes out of this is each individual person has to make the right decision for them, and either decision is-- if they make it in the best interest of themselves and their children, church they do, ought to be admired, because of it's right for them. >> absolutely, absolutely. how you weather any storm, you know, there is no-- i've said many, many times, this sbook not meant to be proscriptive, it's not meant to say, "if this happens you have to kick him out." because that's not the message. the message is think carefully and prayerfully. don't do anything rash. don't saying in you're going to regret. i don't think you throw away a 20-year marriage like this.

deal with other dhajz way. cultivate your faith, strengthen it, work on it, rely on it. when you have tough times, depends on the relationships you have, the people that are there, that keep you accountable, to make sure you're wake making decisions in the right way that, that are consistent with the values you hold. life is tough. so.... >> rose: thank you for coming. >> thanks for having me. >> rose: jenny sanford. the book is called "staying true." thank you for joining us. see you next time. captioning sponsored by rose communications captioned by media access group at wgbh access.wgbh.org ♪

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