Intel’s PC-Mobile Merger Will Be Good For Intel In The Long Run
According to an email sent by Intel CEO Brian Krzanich to the employees, Intel will combine its PC and mobile chip divisions. The merger process is expected to complete at the beginning of 2015. Intel has not revealed much details about how this might affect the company’s future but it is logical to say that this merger indicates the end of either the Atom or Core line of chips.
Intel’s PC division led by Kirk Skaugen is currently responsible for manufacturing consumer-facing chips including successful Core i3/i5/i7 CPUs and their associated chipsets. This division is one of the Intel’s cash cows currently generating the major part of revenue for the company. On average, Intel gets $13 billion per year on revenues around $35 billion from their PC division.
On the other hand, Intel’s Mobile and Communications Group, which is responsible for manufacturing tablet Atom platforms and chips for smartphones, is experiencing huge losses. Its range of Atom processors are not as much liked by the consumers as its PC chips, and hence Intel gives away Atom chips at a loss to force itself into the mobile market.
This division of the company reported a loss of $1 billion last quarter, and the quarter before that. Selling Atom chips at a loss may be a good short-term strategy, but for long term Intel needs to produce best mobile chips.
So despite the fact that Intel is always producing powerful PC chips that deliver top performance among all of its competitors, its mobile chips lag behind when compared with Qualcomm and Apple.
To compensate for the losses, Intel is looking to merge these two divisions. This merger indicates that Intel will look to bring its Core and Mobile chips closer. This will help the company in keeping the mobile chips up to the mark.
Moreover, PC industry is slowly fading as the consumers begin to move towards tablets, Chromebooks and other alternatives. So Intel needs to focus on its mobile chips and rule the mobile world, just like it did with its PC chips.
No matter how the PC-mobile merger goes, it will benefit Intel in the long run. Intel’s future depends on mobile chips, and gaining success in mobile market will surely bring huge profits for the company.
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