Intel's LAME DUCK mobile chips gobbled by CASH COW

Intel will combine its money-printing PC and loss-making mobile processor groups. Chipzilla is under mounting pressure from shareholders to deliver results in the mobile computing market, where the biz is a minnow compared to Brit rival ARM. Intel CEO Brian Krzanich let slip the news in an email to employees on Monday, …

[Anonymous Coward]

If first you don't succeed

And you still don't when you try, try, try again, reorganize your books to hide the losses so you can make up whatever numbers you like about how successful your mobile efforts are.

[Charlie Clark]

Numbers

It will also draw some scrutiny away from the old Mobile and Communications division …which has been losing both cash and market share, despite the chipmaker's best efforts.

To be honest there have been a number of product launches recently (Hudl, Verizon, Dell, Lenovo, etc.) that might make the numbers look a bit better in the next report, though Intel must be practically giving the chips away. Time will tell whether these attempts to get back into the market at any cost are worth it.

[John 156]

What are the numbers telling us?

According to the 2014 3rd quarler figures for Mobile and Communications:

Turnover : 1 million

Loss: 1 billion

Loss for last three quarters: 3 billion

(My) Projected loss for full year: 4 billion

The pressure from shareholders to close this operation down will be intense.

[Missing Semicolon]

Intel never really got the "new embedded"

Early embedded chips were just old desktop devices with narrower buses. Then we got laptop parts (better, but still needing a fan). Atom is nearest, but Intel need to start thinking "AA cell x2" computing, not tiny laptop.

[Charles Manning]

Re: Intel never really got the "new embedded"

"Early embedded chips were just old desktop devices with narrower buse".

Sorry, I've been developing embedded systems for 30 years and I must disagree. If anything it is the other way around. Some embedded CPUs were used to make the first desktops.

Sure there have been some x86s put into embedded service, but they've never been more than single-digit-percent players.

Intel have dabbled in the embedded market often, but then dumped the industry - leaving them high and dry.

The part that really stumps Intel is how to make money from embedded and other low margin parts. The Intel corporate DNA is constructed around the concept of spending hundreds of millions to develop a new desktop/server chip, then sell them for hundreds of dollars each. This is a very high margin business.

Embedded systems and phones are a low margin business. 8-core ARM-based smartphone SoCs (eg. Allwinner) sell for about $10. You need to sell millions to break even, then millions more to be profitable.

[danbi]

Re: Intel never really got the "new embedded"

The CPU design did not start with Intel. Their chips have always been mediocre, for one reason or another.

It is only by spending billions to buy the most expensive and cutting edge fabs, that Intel could stay competitive in recent years. But, when you buy so expensive production facilities, it is not possible to sell cheap. And $1000 CPU part price is not something one expects in a mobile device.. Not even $100.

[StillBill]

Re: Intel never really got the "new embedded"

Really, The Microprocessor design didn't start with Intel? -- REALLY?

http://en.wikipedia.org/wiki/Intel_4004

Oh well

[Anonymous Coward]

We all know that no one wants Intel in the mobile space, but is the real reason for the Q3 falling off a cliff scenario, that Intel has finally stopped paying manufacturers to use its chips, or are they turning down Intel's marketing cash bungs?

[Shaun Hunter]

XScale

How did they manage to sell their industry leading ARM division the year before smart phones caught on? Their deal with Marvel likely included a no competition clause so they can't just start making arm chips again.

The computer industry has been much more interesting since Intel and AMD dropped their interest embedded systems right before that market took off.

[Charlie Clark]

Re: XScale

How did they manage to sell their industry leading ARM division the year before smart phones caught on?

I suspect that it's because the margins on the x86 kit were so much higher than management (and shareholders) didn't see the point in putting any more resources into it. The history of American companies is littered with those that died because they didn't innovate enough but also with those that innovated too much to the detriment of any money-making business.

[danbi]

Insanity: doing the same thing over and over again and expecting different results.

[YARR]

Roll on Q4

I wouldn't count Intel out of the market yet, all these recently reviewed devices have Atoms so Q4 may yet see an uptick for their mobile division...

http://www.theregister.co.uk/2014/10/14/review_tesco_hudl_2_android_tablet/

http://www.theregister.co.uk/2014/10/15/intel_atom_powered_padfone_for_us/

http://www.theregister.co.uk/2014/11/11/review_lenovo_yoga_2_android_tablet/

http://www.theregister.co.uk/2014/11/14/walmart_offering_99_windows_tablet_on_black_friday_and_you_get_just_what_you_pay_for/

http://www.theregister.co.uk/2014/11/18/nokia_android_tablet_n1_ipad_rival/

I guess they must be selling them cheap as... er, chips.