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Intel’s Mobile Division Lost $4.2 Billion In 2014 But They’re Not Quitting

January 17, 2015 - Written By David Steele

The news that Intel’s mobile division lost $4.2 billion in 2014 sounds damning; quarter after quarter, Intel keeps on pumping its processors into mobile devices and quarter after quarter, it keeps on losing money. Sooner or later, this money will dry up, surely? However, as Intel’s Chief Executive Officer Brian Krzanich has reported, it isn’t all bad news. In 2014, 46 million Intel-powered tablets were sold, greater than the target of 40 million. If so many tablets using Intel silicon have been sold, how can Intel still be losing money? As we have reported here at Android Headlines, Intel has been subsidizing these tablet manufacturers by selling their processors at or very close to cost plus covering a proportion of the development costs. Intel have been paying for tablet manufacturers to redesign their tablets in favour of Intel Atom processors at the expense of ARM processors. Intel’s growth in this area may be cut short when the company kills these subsidizes; Intel has been trading profit for mindshare and customer awareness (both the consumer and the manufacturers). 2015 will be the start of their new way of working mobile: they are currently one of the largest merchant tablet processor providers.

Intel are also making changes to their product lineup to reduce manufacturing costs, too, and have manufacturing agreements in place with Rockchip and Spreadtrum. Their intention is to save $800 million in costs in 2015. This will allow them to sell processor chipsets at the existing low prices and make money from the product. The company is working on a new line, SoFIA, which is an integrated application processor and baseband chip. They are currently working on getting the 3G version carrier-certified, which will be followed by a 4G LTE version later in the year and the company believe they can grow their business in line with the market and turn the losses into profits. We’ve heard that Intel is committed to the mobile sphere as it is one area of growth that remains, especially when we consider the Internet of Things and wearable devices, areas that Intel is active in.

The problem does not appear to be in the processors themselves; Intel scored the contract for Nokia’s first Android-powered tablet, the Nokia N1, which uses a 64-bit, quad core 2.3 GHz processor. From my personal experience, Intel’s current Atom range of processors is competitive for normal, everyday tablet duties as any other manufacturer, but like most other manufacturers, loses out on gaming abilities compared with the Nvidia Tegra family. Intel have much to prove but much to gain from sticking in the mobile sector.