Intel Shifts Mobile Focus from Market Share to Profits, Cost Savings
Entering 2015, Krzanich and CFO Stacy Smith said the goal is to reduce costs and improve the profit margins in the mobile chip business, which is in the process of being folded into the PC group. Intel is looking to reduce costs in the mobile business by $800 million. Part of that will happen through the restructuring, a move that will enable greater efficiencies in the supply chain and in staffing, Krzanich said. In addition, this year Intel will begin selling its SoFIA mobile chips, which will go into smartphones and tablets and will be relatively less expensive to make than the current processors, the CEO said. The company has internally qualified the first SoFIA chips, which will include an integrated 3G modem. Another version that will have built-in LTE 4G capabilities will come out later. Over the past year, Intel also has partnered with Chinese semiconductor manufacturers Rock Chip and Spreadtrum to help build the SoFIA SoCs. "As those come in, they take a lot of that cost delta out and that's why we are feeling fairly good about the $800 million," Krzanich said."We don't need to go out and necessarily outpace the market or anything like that this year from a growth perspective," the CEO said, noting that the goals are to cut costs and increase efficiencies. "We'll grow at the rate that the market does. I don't think I want to necessarily shrink, so unless the market shrinks significantly, I think we would then probably try and target more of a flattish [growth rate]."
Going forward, "our key goal for mobility is to improve profitability," he said, adding that he expects unit growth in the tablet space will keep pace with the market.