Intel merges PC and mobile divisions

Intel plans to merge its profitable PC group with the loss-making division that sells chips for smartphones and tablets

Chip maker Intel plans to merge its profitable division that handles chips for personal computers with its loss-making group that handles chips for smartphones and tablets.

The teams responsible for tablet and smartphone chips will join the new client computing group, while teams that focus on RF transceivers, GPS, Wi-Fi and Bluetooth will form a new wireless R&D group.

The planned reorganisation of Intel operations was announced in an email sent to employees by chief executive Brian Krzanich, reports the Wall Street Journal.

Bloomberg quotes Intel spokesman Chuck Mulloy as saying the move comes as the "lines are blurring between PCs, tablets, phablets and phones".

Intel’s aim is to "accelerate the implementation and create some efficiency so we can move even faster,” he said.

The emergence of hybrid computers, which can switch between a laptop and a tablet, has done much to blur the boundary.

Mulloy said processors will be needed in the future that can be used in tablets, smartphones or laptops. By merging the two divisions, Intel will be better placed to meet that demand.


Catching up in the 4G chip market

Intel's mobile division recorded a $1.04bn loss in 2014's third quarter, and revenues declined from $353m in the third quarter of 2013 to just $1m in 2014.

In contrast, Intel's PC chip-making division reported a profit of $4.12bn and revenue of $9.19bn.

Industry commentators said that, although Intel is set to exceed its 2014 target of 40 million tablet chips shipped, the push to achieve this has required the payment of heavy subsidies to manufacturers.

Intel was late to the mobile chip market, and plans to introduce integrated 4G capabilities in its chips by late 2015, while ARM chips from rival Qualcomm already have this capability.

Analysts said that, by merging the two divisions, Intel is betting that the distinctions between mobile device chips and PC processors will continue to erode.

The current head of Intel's PC-chip division, Kirk Skaugen, is expected to head the new client computing group from the beginning of 2015.

Herman Eul, current head of the mobile group, will reportedly oversee the move to the new structure until at least the end of the first quarter, when a new role for him will be announced.

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