Intel hides mobile losses behind PC Client Group

November 18, 2014 | 12:45

Tags: #atom #mobile-and-communications #pc-client-group #processor #semiconductor #smartphone #soc #system-on-chip #tablet

Companies: #arm #intel

Intel is to merge its loss-making mobile division with its cash-cow personal computer arm, in a move that may help disguise poor performance.

Intel, by its own admission, was caught on the hop by the smartphone - and, later, tablet - revolution. While the company once produced ARM-based processors to power personal digital assistants (PDAs), it long ago sold that part of the company off in order to concentrate on its own x86 instruction set architecture and variants. In doing so, it allowed Cambridge-based ARM - a company which has its origins in the 8-bit microcomputers of the 80s - to build up a near-monopoly in the low-power computing market, tying up an overwhelming majority of the smartphone and tablet ecosystem with its IP offerings.

Intel has, of late, been attempting to fight back. The company has begun selling smartphone modems and low-power Atom chips, but despite a few high-profile design wins remains a bit-player in the market. Worse, its share is slipping: the company's most recent financial report suggested the Mobile and Communications division made revenue of just $1 million for its third financial quarter - down from $353 million in the same period a year earlier - for a painful $1 billion operating loss.

While Intel as a whole continues to make money hand-over-fist, investors get antsy at seeing such large loss figures on the balance sheet. Accordingly, it's perhaps no surprise to see Intel looking to hide those figures until it can get some real growth in the market - at least, according to an internal email reported upon by the Wall Street Journal. According to the paper's write-up of the unpublished email, the Mobile and Communications division - a $1 billion loss last quarter - is to be merged with the PC Client arm - a $4.12 billion profit during the same period - in order to balance the books. As a result, a loss-making division is hidden behind the profits of another with the new Mobile-and-PC-Client division expected to make a profit of around $3 billion each quarter.

The gist of the email, and the plan to merge the two divisions, has been confirmed by Intel's Chuck Mulloy. No public statements are expected to be made on the matter ahead of the company's next quarterly earnings report.
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