Intel Converges Its PC and Mobile Divisions
Intel announced on Tuesday that it will combine its PC Client group and its Mobile and Communications group into a single division, to be called its Client Computing group. The changes will go into effect at the beginning of 2015, and the resulting group will be run by Kirk Skaugen, currently leader of Intel’s PC chipset unit.
This reorganisation is an acknowledgement of the threat of product hybridisation, in which devices like detachables are becoming increasingly difficult to classify. Form-factor seep is creating opportunities for competitors MediaTek and Qualcomm to grab market share in PC-like devices, a segment which has traditionally been dominated by Intel.
Last month, Intel reported that its mobile chipset unit lost $1 billion in 3Q14 on revenue of $1 million, a result of subsidies to manufacturers to use Intel’s chips in tablets. Intel chips are currently used in only a few key smartphone products, but the company’s long-term investment in tablets should see it realise its target of 40 million tablet shipments in 2014 and give it a platform for more profitable growth in 2015 and beyond. Intel could continue to report its mobile sales separately despite the merger, to allow for clarity and historic comparisons. The company will hold its investor day later this week, and more information is likely to be provided then.
Intel’s move echoes the reorganisation announced by Microsoft last year — entitled Microsoft One — in which the software company merged most of its device units including its smartphone, tablet, PC and Xbox divisions. Microsoft’s unified Windows 10 approach to spread one operating system across all form factors is enabling change the way the industry thinks about devices. The definition of a PC is being altered.
Some are viewing such unit convergence as a dilution of strength, but these internal mergers from Intel and Microsoft are a realistic reflection of device evolution. The threat of Android, iOS and, to some degree, Chrome OS, to the current Windows–Intel ecosystem requires a seamless approach. Divisional lines on company organisation charts should reflect the fading lines between device forms, including for wearables and other connected devices such as automobiles and home thermostats.
More non-computer-like computers will come to market during 2015. Consumers won’t be concerned about what’s inside, but rather the overall experiences. The apps, battery life and pricing should come together to make a convincing case.
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