Intel to merge its PC and mobile chip units in early 2015

Intel announced it's planning a big reorganization that will lead to the merger of the PC division with the unit that makes chips for mobile phones and tablets. An e-mail by CEO Brian Krzanich to Intel's employees explains the merger is to take place in early 2015. The new combined unit will be led by Kirk Skaugen, who currently heads the PC chip business.

The chip giant says the change makes sense due to the blurring lines between PC, tablets, phablets and phones, and hopes it will allow it to more efficiently target both markets. Once the transition is complete, Herman Eul, the current head of the mobile chip division, will be transferred to a different position in Intel.

The mobile chip unit has been Intel's problem child for quite some time. While the PC division pulled in an operating profit of $4.12 billion on revenue of $9.19 billion last quarter, the mobile group posted an operating loss of $1 billion on revenue of just $1 million. The poor performance of the mobile chip division results from the selling of chips at a big loss via subsidies in a failing attempt to capture marketshare.

“The lines are blurring between PCs, tablets, phablets and phones,” Mulloy said. “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 the PC-chips business. Hermann Eul, currently in charge of phone and tablet chips, will stay on to help the transition and until a new post for him is announced in the first quarter of 2015, Chief Executive Officer Brian Krzanich told employees in a memo, Mulloy said.

Source: Bloomberg