Intel is to combine its communications businesses into a
single unit with the aim of improving long-term growth
prospects.
The Wireless Communications and Computing Group (WCCG) will be
folded into the Intel Communications Group (ICG), with the new
organisation run by existing ICG head Sean Maloney, executive vice
president and general manager. The head of WCCG, senior vice
president and general manager Ron Smith, will retire early next
year.
WCCG is home to Intel's XScale processors for personal digital
assistants, its mobile phone processors, and its flash memory
division. The group has been hit hard over the past year by an
ill-timed decision to raise flash memory prices in January that
cost the company market share, and the slower-than-expected sales
of next-generation mobile phones with Intel processors.
Last week, Intel said it would take a charge of about $600m
related to a reduction in goodwill for assets related to the
acquisition of a wireless company Intel made in 1999. The value of
assets acquired from DSP Communications, which became part of WCCG,
has decreased significantly, and Intel no longer expects the
business to grow as fast as it once thought.
Intel chief financial officer Andy Bryant declined to answer
questions about possible management changes within WCCG.
The PXA800F, formerly known as Manitoba, was one of the products
that arose from the technology and engineers acquired from DSP
Communications. It contains an applications processor, digital
signal processor and flash memory on a single chip.
The competition in the communications business is far more
intense than in the world of PC processors, where Intel holds
around 80% of the market, said Will Strauss, principal analyst with
Forward Concepts. "This shows they've finally realised that things
aren't just working the way they should in the wireless
communications area."
Mobile phone companies have been reluctant to adopt Manitoba
because of its design, Strauss added. While combining chips on a
single die makes for an elegant design, it generally costs more to
implement than a design with separate chips for the applications
and digital signal processors.
Tom Krazit writes for IDG News
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