The growing “blurred lines” between mobile devices and PCs is grounds to fold Intel’s mobile chip making division into the mothership of its PC unit.
That’s according to Intel spokesperson Chuck Mulloy, who is quoted in a Bloomberg story responding to a report that Intel will merge the two divisions. News first broke of this merger in a memo sent by CEO Brian Krzanich to employees.
“The lines are blurring between PCs, tablets, phablets and phones,” Mulloy is quoted as saying. “The idea is to accelerate the implementation and create some efficiency so that we can move even faster.”
The new combined unit will be led by Kirk Skaugen, who currently heads up the company’s PC division. The fate of Hermann Eul, who currently is in charge of the company’s mobile division, is unknown but a new position will be announced for him in the first quarter of next year.
Why the change?
An Intel insider that spoke to VR World said the point of the change is simply to make Intel’s internal organizational structure more efficient. There are more similarities between a tablet with a keyboard and a notebook than a tablet and a Xeon chip. Intel’s upcoming Broadwell and Skylake have TDPs for their respective notebook chips that would be appropriate for a tablet. Greater efficiency comes from merging these two teams.
The other reason for the reorganizing is the fact that Intel’s mobile division has been deeply unprofitable since its inception. In order to earn hardware wins the company has had to engage in an aggressive contra-revenue strategy — effectively paying vendors to take the chips. The cost of this strategy has been absolutely staggering: the division posted a loss of $1.04 billion in 2014’s third quarter while revenues declined from $353 million in the third quarter of 2013 to $1 million this year.
Intel has not announced any change in its goal to ship 40 million tablet processors this year.