Intel Shifts Mobile Focus From Market Share to Profits, Cost Savings
The chip maker's mobile business lost $4 billion in 2014 as the company worked to gain traction in the tablet market by subsidizing its chips.Intel paid a heavy price in its efforts to raise its status as a major supplier of processors for tablets. Company executives set a goal to have its Atom chips in 40 million tablets in 2014. In the end, Intel silicon was in 46 million tablets that shipped last year, exceeding the company's goal. However, much of that was gained through subsidies paid to OEMs to use the Intel chips, helping drive losses in the company's Mobile and Communications Group to more than $4 billion in 2014. Now Intel officials are shifting their focus as they enter 2015, looking to make money more than to gain market share in the highly competitive mobile chip space. The push in the tablet market did what they wanted it to do, but now attention needs to be paid to profit margins. For 2014, "We said, 'Look, we have to go out and establish our footprints here,'" CEO Brian Krzanich said during a conference call Jan. 15 to discuss the company's fourth-quarter and full-year 2014 financial numbers. "We have to get ourselves known in this market, be considered a serious player and get the developers attracted, both the hardware and software developers interested in [Intel Architecture]. … We feel like we've done a very nice job of establishing ourselves as one of the top producers of silicon in this segment."
Intel, in 2014, saw record revenues, due to the strength of its data center business, a rebound in the PC chip sales, and growth in such new areas as the internet of things (IoT). Throughout the year, the mobile business, with its massive losses, stood in stark contrast to the strength in the other units.