Intel to merge PC and mobile processor units in profit push

In response to an evolving market, Intel plans to combine the resources of its PC division with its struggling chip group.
Written by Charlie Osborne, Contributing Writer
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Intel plans to merge its PC and mobile processor groups in order to gain more traction in the mobile chip market.

Big Blue's reorganization, set out by CEO Brian Krzanich in an email sent to employees, will begin early next year. Within the email, seen by the Wall Street Journal, Krzanich says:

The market continues to evolve rapidly, and we must change even faster to stay ahead.

Kirk Skaugen, a senior vice president who now oversees what Intel calls the PC-client group, will lead the charge and eventually the new group, dubbed the client-computing group. Under the new structure, the client-computing group will encompass the sale of chips used in PCs and servers, as well as processors and modem chips used in mobile devices such as smartphones and tablets.

Intel's mobile group was created in 2011, and combined four divisions — mobile communications, netbooks and tablets, mobile wireless technology and mobility. The group's chief executive, Hermann Eul, will support the transition until the end of the first quarter of 2015, before his next post is announced.

The firm's reorganization comes at a time where Intel is under pressure to improve its standing in the mobile realm. While rivals such as Qualcomm are reaping the benefits of their chips being used in smartphones and tablets, Intel has struggled to break into the market.

Although well known as a strong player in the PC and server industry, Intel's chips are only found in a handful of products — such as the Samsung Galaxy Alpha smartphone.

Intel spokesman Chuck Mulloy confirmed the changes, saying in an interview:

We are seeing a blending of the lines between various devices. The idea is to accelerate our efforts for tablets and create greater efficiency.

In the company's third-quarter financial results, Intel reported earnings of 66 cents a share on revenue of $14.6 billion. The firm's mobile division did poorly, recording revenue of $1 million during the quarter -- a steep drop from $353 million in 2013.

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