Intel is losing against ARM when it comes to mobile. This is incontrovertible. In smartphones and tablets, Intel’s chips just haven’t been able to compete with the likes of Apple, Samsung, Qualcomm, and Nvidia…. despite the billions of dollars Intel has spent trying to heavily subsidize things like Atom-powered Android phones.
Not so surprisingly, Intel’s mobile and tablet business isn’t profitable. But Intel’s about to do a little bit of creative accounting to make it’s mobile and tablet divisions profitable: merge them into the PC division.
The idea here is simple. Intel is still unmatched on the desktop, but it’s mobile and tablet sales are an embarrassment… and any potential vendors who might be considering an Intel chip in their smartphone or tablet, or investors hoping to plunk down on a blue chip, know it. By merging the two divisions, Intel’s PC division will take a profit hit, true, but Intel might be able to obscure the true extent of their mobile failure from potential customers and investors.
Of course, Intel is justifying this by claiming that the line between phones and computers are blurring. But that’s nonsense: there’s still a huge divide between a laptop and a smartphone, or a tablet and a PC. We might get there eventually, but we’re not there yet: Intel’s simply trying to prop up a failed business with a successful one.
The new merged unit will be led by PC boss Kirk Skaugen while his mobile counterpart, Hermann Eul, will remain to help with the transition until Intel finds him another post by next year. As for Intel’s smartphone business, don’t expect much change there until 2015, when an internal reorganization will be completed. Maybe Intel will finally figure out its mobile business then.
Source: Bloomberg
