Intel combines comms groups

Intel is to combine its communications businesses into a single unit with the aim of improving long-term growth prospects.

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 Service

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