​Intel culls health wearables division: Report

CNBC reported the chip giant has axed the division working on health-related wearable devices such as fitness trackers.
Written by Asha Barbaschow, Contributor

Intel has axed the group working on health-related wearable devices, such as fitness trackers and smartwatches, CNBC reported on Thursday.

According to the report, the chip giant let go 80 percent of its Basis group -- the staff charged with building the Basis fitness watch -- in November, with many able to stay on at Intel in other parts of the business.

Intel scooped up Basis Science in March 2014 for a cost of $100 million. At the time, Intel was drawn to Basis' 7 percent marketshare from a single product: The Basis Health Tracker Watch.

Intel Capital, in addition to Norwest Venture Partners and Mayfield Fund, had previously invested $30 million into the startup.

TechCrunch previously alleged the acquisition had not gone as planned and as a result Intel was moving away from the wearables vertical.

"Intel is in no way stepping back from the wearables business. In fact, we have several products in the works that we are very excited about, as well as prior launches that highlight our wearable technology such as the TAG Heuer Connected watch and recent Oakley Radar Pace smart eyewear," Intel said in response to the claims.

However, CNBC today reported that about two weeks ago, Intel completely eliminated the group, noting Intel's New Technology Group is now focusing on augmented reality.

Intel issued a full recall of its Basis Peak fitness watch in August last year, warning customers that the watch was overheating and causing burns or blisters.

At the time, Josh Walden, senior vice president and general manager of the New Technology Group, advised owners of the watch to immediately stop using the device and return it.

The company also stopped support for the Basis Peak in December.

Following its Basis Science acquisition, Intel continued to cultivate a wearables business, scooping up Canada's Recon in June 2015 and partnering with the likes of Fossil and more recently Tag Heuer in the wearables space.

The other IoT-related product Intel is paring back is its Recon Jet line of ARM-powered smart glasses.

In early 2016, Intel CEO Brian Krzanich said during its keynote at the Consumer Electronics Show that health and wellness was one market that its Internet of Things segment would target.

"It's the technology that will enable the new experience -- that's the products that will be successful in the future," he said at the time.

For the first quarter of 2017, Intel reported $3.2 million in net income, on revenue of $14.8 billion. The company's Internet of Things Group revenue was reported as $721 million, up 11 percent year-on-year.

Intel has not mentioned wearables during its earnings calls since 2014, CNBC noted.

The company's health wearables layoffs follow similar culls Intel made last month, when it revealed it was wiping out Raspberry Pi challenger developer board, Galileo, as well as the Joule and Edison compute modules.

Intel launched the Galileo board in 2013 under a partnership with Arduino, targeting the growing community of developers building systems with ARM-based devices like Raspberry Pi.

Edison was launched a year later with the aim of seeing the Intel-based compute modules powering wearables and home-based IoT devices, such as smart speakers. Intel then introduced the new high-powered Joule, for more advanced applications like robotics, in 2016.

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