While Intel posted stellar financial results yesterday, one of the interesting things that isn't quite obvious given the good overall numbers is that the firm's mobile division continues to bleed cash.
In an attempt to gain a foothold into the smartphone and tablet markets, Intel shipped 46 million mobile processors at contra revenue, which basically means the chip giant is paying firms to use its chips. This resulted in an operating loss of $4.21 billion in the mobile division for 2014, a figure that would bankrupt most of Intel's competitors but the chip giant's record performance in the PC and server divisions makes it seem like just a tiny blimp on the firm's financial statement.
For 2015, Intel plans to reduce mobile chip subsidies and hopes to improve profitability with new, cheaper and more capable chips.
Intel plans to reduce costs at its mobile unit, which is being folded into its PC-chip division, by $800 million in 2015 as it begins offering cheaper, more capable chips for tablets and phones and pays less in subsidies, the company said today.
“We’re proud that the company reached these milestones, but we have more work ahead of us in 2015,” Intel Chief Executive Officer Brian Krzanich said on a conference call. “A key goal for mobility is to improve profitability.”