Intel Will Merge Company’s Poor-Performing Mobile Division With Its PC Division …

18 Nov 2014 | Author: | No comments yet »

Burned by Apple, Intel tries to hide its unprofitable mobile chip division.

Intel will combine its PC and mobile processor divisions under one roof, reflecting a changing market in which the line between tablets and laptops has blurred.Intel Corp., (INTC:US) struggling to gain a foothold in mobile computing, is merging its mobile phone and tablet businesses with the division that makes chips for personal computers.

Within the email, seen by the Wall Street Journal, Krzanich says: Kirk Skaugen, a senior vice president who now oversees what Intel calls the PC-client group, will lead the charge and eventually the new group, dubbed the client-computing group. The chip maker will form a new division at the start of next year called the Client Computing Group, which will include the teams that develop its Core processors for desktops and laptops, as well as those that develop its Atom chips for smartphones and tablets. The reorganization of the two units, which have been running at a loss, announced internally, will be completed early next year, Chuck Mulloy, a spokesman for the Santa Clara, California-based chipmaker, said yesterday. “The lines are blurring between PCs, tablets, phablets and phones,” Mulloy said. “The idea is to accelerate the implementation and create some efficiency so that we can move even faster.” The new combined unit will be led by Kirk Skaugen, who currently heads the PC-chips business. Intel’s mobile group was created in 2011, and combined four divisions — mobile communications, netbooks and tablets, mobile wireless technology and mobility. Until recently, Intel served the PC market with its powerful Core processors and the smartphone and tablet markets with its low-power Atom chips, but those lines are no longer so clear.

While Intel is on track to exceed its target of shipping 40 million tablet processors this year, much of that is fueled by chipmaker subsidies to device makers. Those payments resulted in an operating loss for the mobile unit of $1.04 billion in the third quarter, following a similar loss in the previous period. Intel is still unmatched on the desktop, but it’s mobile and tablet sales are an embarrassment… and any potential vendors who might be considering an Intel chip in their smartphone or tablet, or investors hoping to plunk down on a blue chip, know it.

Although well known as a strong player in the PC and server industry, Intel’s chips are only found in a handful of products — such as the Samsung Galaxy Alpha smartphone. By merging the two divisions, Intel’s PC division will take a profit hit, true, but Intel might be able to obscure the true extent of their mobile failure from potential customers and investors. Herman Eul, who leads the mobile group today, will oversee the move to the new structure until at least the end of the first quarter, with a new role for him to be announced after that, Mulloy said.

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