Very few people who own a mobile device have Intel’s chip on the inside, running those smartphone(s). For some reason, the mobile market has been less inclined to adopt Intel chips compared to those offered by ARM. As a result of this, the mobile chip side of Intel’s business has suffered quite substantial losses during this year. In fact, in the third quarter the mobile chip side reported a $1 billion operating loss. This resulted in revenues declining to $1 million and down from $353 million in the previous year. In comparison, the computer processing side of Intel’s business is booming with the PC side recently reported an operating profit of over $4.12 billion.
In an attempt to address this situation, it now seems Intel will be merging the mobile chip side with the PC side. These two will come together under a new unit, dubbed the ‘client-computing group’. This unit will be headed by Kirk Skaugen who is currently a Senior Vice President and oversees the more profitable PC side, known as the ‘PC-Client group’. The reason given for this merge is not as clear-cut as the mobile side doing so poorly. Instead, and according to Chief Executive Brian Krzanich, the reason is today’s market. Krzanich was noted saying, “The market continues to evolve rapidly, and we must change even faster to stay ahead” in an email to employees. As such, the convergence of the two sides will allow for a more streamlined approach to both the mobile and PC sides. Not to mention Intel are probably hoping for a bit of PC luck to rub off on the mobile sector and reversing their current poor performance. The changes are scheduled to take effect from mid-2015. Until then, the time will be used to prepare the transition and integration.
Intel are a prime example of when the numbers don’t add up. In spite of their operating loss of $1 billion, the company is well on track to hit their target of 40 million tablet processors for this year. That being said, a large number of these shipped units are subsidized to device manufacturers, resulting in profit. So what do you think of these changes? Do you think the market is converging so much that companies like Intel should be hatching all their ‘eggs in one basket’? Let us know what you think.