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By | Neil McAllister 18th November 2014 03:28

Intel's LAME DUCK mobile chips gobbled by CASH COW

Chipzilla won't have money-losing mobe unit to kick about anymore

Intel will combine its money-printing PC and loss-making mobile processor groups. Chipzilla is under mounting pressure from shareholders to deliver results in the mobile computing market, where the biz is a minnow compared to Brit rival ARM.

Intel CEO Brian Krzanich let slip the news in an email to employees on Monday, according to a report in the Wall Street Journal.

The move will see the company's current PC Client and Mobile and Communications groups combined into a single new division, which will reportedly be known as Client Computing.

It will also draw some scrutiny away from the old Mobile and Communications division – which, although it's widely perceived as Intel's most critical business for future growth, has been losing both cash and market share, despite the chipmaker's best efforts.

During the third quarter of Intel's fiscal 2014, the group posted an operating loss of $1.04bn on sales that were down 99.72 per cent from the same period the previous year and down 98 per cent from the previous sequential quarter.

Put another way, Intel's hopes of breaking into mobile phones essentially evaporated in Q3. Nobody in that business wants Chipzilla's stuff, especially given how rapidly new, more powerful, and more versatile ARM SoCs keep flooding the market.

How Intel intends to turn that around is unclear, but one effect of the restructuring will be a change in management. Leading the new Client Computing group will be Kurt Skaugen, who currently heads the PC Client division.

That group, by comparison, brought in $9.19bn in revenues in the third quarter, and its operating income was up 27 per cent, buoyed by an uptick in PC and server sales.

Herman Eul, who leads the Mobile and Communications group now, will stick around to oversee its transition into the new structure but will then step aside to take a new, unspecified job at Intel.

The teams within Mobile and Communications that develop wireless modem chips will also be pulled out and moved into a new R&D division within Intel, sources claim.

An exact timeline for the changes was not given, but Krzanich's letter reportedly said to expect the transition to be completed by the end of the first quarter of 2015. ®

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