The dominoes from Intel's decision to hand control of the company's client computing, Internet of things and software businesses to a former Qualcomm executive are beginning to fall.
Two longtime Intel veterans—Kirk Skaugen, senior vice president and general manager of the Client Computing Group, which includes PCs, and Doug Davis, senior vice president and general manager of the IoT Group—are both leaving the company, according to an email sent April 4 to employees from CEO Brian Krzanich and Venkata "Murthy" Renduchintala, who came to the company from Qualcomm in November 2015 to become president of the new Client and Internet of Things (IoT) Businesses and Systems Architecture Group.
The announcement comes days after a Bloomberg report said Aicha Evans, corporate vice president and general manager of Intel's Communications and Devices Group, also was leaving the chip maker. Intel spokespeople declined to comment to news organizations on the report regarding Evans, who took over the position in July 2015.
The executive changes come after Intel generated $55.4 billion in revenue in 2015, a 1 percent drop from 2014, and $11.4 billion in income, a 2 percent decline. Intel saw strong growth in several business groups, including the Data Center Group, which grew revenue 11 percent, and smaller but growing businesses like IoT and nonvolatile memory.
However, the chip maker continues to see struggles in its PC and mobile businesses. The global PC market has seen sales declines since early 2012, due in large part to the rise of smartphones and tablets, and Intel—like other PC system and component makers—is not immune to the problems. In addition, the company was late addressing the mobile space, which is dominated by systems-on-a-chip (SoCs) designed by ARM and made by the likes of Qualcomm and Samsung.
Krzanich has admitted that Intel missed the trend toward smartphones and tablets and has said the chip maker will not make the same mistake with new emerging markets, such as wearable devices and the IoT. Renduchintala, who was responsible for Qualcomm's mobile and client chip business—including the Snapdragon SoC portfolio—before coming to Intel, will now oversee these efforts at his new company.
Given the decision to bring the ex-Qualcomm executive into such a significant position—Renduchintala reports directly to Krzanich—it's not surprising that other officials are leaving the company, according to Patrick Moorhead, principal analyst at Moor Insights and Strategy.
"This is what happens at big companies," Moorhead told eWEEK. "What I don't see yet is a strategy change."
That could come, he said, but Intel "is not a company in trouble." Many of its business groups are growing, and even the PC group, which saw revenue drop last year by 8 percent, has strong gross margins. It also is making strides in mobile in such areas as modems and 5G, according to Anshel Sag, an analyst with Moor Insights and Strategy.
The hiring of Renduchintala was a boon for Intel—he came with a lot of experience and the ability to bring talented people with him—but it was unusual, Moorhead said.
"Very rarely has an outsider been brought in on the product side," he said.
Skaugen, who has been with Intel since 1992 and at one point had led the Data Center Group before taking over the PC business, will leave the company April 8. Krzanich and Renduchintala in their email said only that Skaugen was leaving Intel "for his next career opportunity." Skaugen will be replaced by Navin Shenoy.
Davis, who has been with the chip maker for 32 years, will retire at the end of 2016.
"Doug has led the Internet of Things Group through a tremendous transition and growth period," Krzanich and Renduchintala wrote. "Doug's deep acumen, strong customer relationships, and leadership in the IOT sector have been instrumental to our growth in this space, and the emergence of Intel as one of the most important end-to-end players in the Internet of Things."