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Intel to combine its computer and mobile processor groups together

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November 18, 2014

Intel said earlier this morning that it plans to combine its successful computer and loss-making mobile processor groups together, even as it comes under mounting pressure from company shareholders to deliver results in the mobile computing market.

Intel CEO Brian Krzanich told this bit of news in an email to employees yesterday, according to a report in the Wall Street Journal.

The decision will see Intel's current PC Client and Mobile/Communications groups combined into a single new division, which will reportedly be known as Client Computing.

It will also draw some scrutiny away from the old Mobile and Communications division – which, although it's widely perceived as Intel's most critical business for future growth, has been losing both cash and market share, despite the chipmaker's best efforts in the past year.

During the third quarter of Intel's fiscal 2014, the group posted an operating loss of $1.04 billion on sales that were down an incredible 99.72 percent from the same period the previous year, and down a staggering 98 percent from the previous sequential quarter.

In other words, Intel's hopes of breaking into mobile phones essentially evaporated in Q3. Nobody in that business wants Intel's chips, especially given how rapidly newer and more capable and more versatile ARM SoCs keep flooding the market at an alarming pace.

How Intel plans to turn that around is still unclear, but one effect of the restructuring will be a big change in its mid-level management. Leading the new Client Computing group will be Kurt Skaugen, who currently heads the PC Client division.

That group, by comparison, brought in $9.19 billion in revenues in the third quarter, and its operating income was up 27 percent, buoyed by an uptick in PC and server sales.

Herman Eul, who leads the Mobile and Communications group today will stick around to oversee its transition into the new structure but will then step aside to take a new, unspecified job at Intel.

The teams within Mobile and Communications that develop wireless modem chips will also be pulled out and moved into a new R&D division within Intel, sources claim.

An exact timeline for the changes was not given, but Krzanich's letter reportedly said to expect the transition to be completed by the end of the first quarter of 2015.

Source: Intel Corp.

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