SAN FRANCISCO – In a move to streamline business and combat dismal mobile financial results, Intel will merge its mobile and PC divisions in early 2015.
The Mobile and Communications Group reported a $1 billion operating loss in the third quarter of 2014, with a $1 million revenue drop year-over-year. The mobile chip group will join Intel's profitable PC Client Group -- which saw a 6% increase in revenue to $9.2 billion in the third quarter -- under PC Group vice president Kirk Skaugen.
"The lines between the products are getting blurred. Phones are becoming phablets, tablets are becoming two-in-ones. The processors going into those two products are crossing lines," Intel spokesperson Chuck Mulloy told EE Times. "The [mobile] market isn't standing still waiting for us to catch up. It made sense…that we start treating these as a spectrum of products rather than point products."
Intel's Core-M is being used in some tablets in place of its mobile Atom processor because the architectures are similar, Mulloy noted. The company will continue to see its PC chips scale down for mobile as its mobile chips scale up, he said.
Intel leads the non-Apple tablet processor market with its Core-M. Kevin Krewell of Tirias Research suspects that combining the Core-M and Atom divisions “will do a better job of rationalizing which goes into which segment."
Mulloy said that the merger will not change Intel's mobile road map, adding that modem teams will merge into Intel's Product Engineering Group. The China Product Engineering Group, which was previously separate from the company's main engineering group, will also fold into the new business.
Krewell is skeptical about Intel's investment in its modem business. While Intel will likely roll out modems on an integrated SoC, Krewell told EE Times that a lack of serious investment doesn't bode well for the company's smartphone business.
"The goal of the smartphone business is to sell an integrated part... Intel's modem from the former Infineon group is still at a TSMC fab and hasn't been integrated into an Intel fab," he said. "They're probably more interested in licensing and working with partners like they did in China to spread their Atom processor, as opposed to selling own chips. With regard to modems, most sales are standalone products."
Mulloy said Intel has no plans to divest from its mobile or modem business, though such an event wouldn't be implausible. Krewell pointed to Broadcom's move earlier this year out of the mobile baseband segment, adding that the modem business is becoming more brutal and vertically integrated.
"I think this is further indication that they're moving away from efforts in smartphone business. They're still heavily investing in tablets and I expect them to continue to be... [with a] more unified vision," Krewell said.
There will be no layoffs associated with the merger, Mulloy said. Mobile group general manager Herman Eul will lead the transition before receiving a new appointment.
— Jessica Lipsky, Associate Editor, EE Times