Intel Announces Major Reorg To Combine Mobile And PC Divisions

For the past year, Intel has pursued what's known as a contra-revenue strategy in its mobile division, where product is deliberately sold at a loss to win market share and compete effectively. This has led to a huge rise in tablet shipments, but heavy losses inside Intel's mobile division. Today, the company announced that it would take steps to fold its mobile and conventional processors into a single operating division. While this helps shield the mobile segment from poor short-term results, it also reflects the reality that computing is something users now do across a wide range of devices and multiple operating systems.

Currently, the two markets are divided mostly by processor type. Intel's historic consumer and laptop business is mostly driven by its Core i3/i5/i7 products, while its tablet sales are based on Bay Trail, Moorefield, and Merrifield. The Broadwell-based Core M, however, has begun to challenge that narrative with its 4.5W operating TDP -- such low power consumption figures were once the exclusive purview of Intel's "little cores."

Blurred Lines:

Once upon a time, the line between Intel's "big core" division and its little core products was going to be form factor -- Atom would power netbooks and MIDs (remember those?) while big cores were reserved for real laptops. Then, once Microsoft announced it would enter the ARM business, it was a price point. ARM chips would anchor the low end, Atom would drive midrange devices, and Core would power the high margin hardware.


Broadwell's for tablets... but so is Atom. It's hard to fathom.

The Windows 8 flameout left Intel scrambling to pull together a robust Android alternative and a set of SKUs that could go head-to-head against ARM chips at the same price. Because actual shipping hardware changes much more slowly than marketing initiatives, the company was forced to ship contra-revenue in the short term while it designed cost-optimized versions of Bay Trail and brought low-cost projects like SoFIA up at rival TSMC. At the same time, it's pushed Broadwell to 14nm and 4.5W TDPs to demonstrate that x86 chips can continue to compete in the "real" performance market.

Intel's decision to combine these markets actually makes sense if you view it from the perspective of how people actually use modern devices. Consumers are increasingly less willing to compromise on applications or accept vendor lock-in -- imagine if Facebook only worked on Android, or if Netflix was only available on iOS.


Intel CEO Brian Krzanich

Users will always pay attention to price, but combining segments may finally convince Intel to stop giving Atom the short end of the proverbial stick. For years, the company shortchanged its own low-power design -- the original chip debuted in 2008, but it took Intel a whopping five years to refresh the core architecture. To put that in perspective, the first Atoms competed against the earliest single-core Cortex-A8 processors. ARM then refreshed with Cortex-A9, went to dual core, then quad-core, and finally Cortex-A15-class processors before Intel managed to ship a single Atom redesign.

Hopefully this combination will help the company execute a single strategy as opposed to the push/pull between two divisions. Intel may not have hit anything like the mobile targets it set out years ago, but long-term success in laptops, tablets, and smartphones remains integral to the company's finances. Desktops and conventional laptops are just one way people compute today and Intel needs to make certain it has a robust long-term presence in every computing market.

Via:  MarketWatch
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