According to a report this evening from the Wall Street Journal, in an email sent to employees by Intel CEO Brian Krzanich, Intel has announced plans to merge their struggling Mobile division with the PC Division. The newly created Client Computing Group would be led by Kirk Skaugen, who currently heads the PC division for Intel. The change in reporting is announced to commence in the beginning of calendar year 2015.

The Mobile and Communications Group, which currently is responsible for tablet and smartphone platforms as well as RF transceivers, GPS, Wi-Fi, and Bluetooth will be broken up. The teams which focus on SoC development will join the Client Computing Group, and those which focus on RF technologies will form a new wireless R&D group.

As we reported in Intel’s most recent earnings report, the Mobile and Communications Group had an operating loss of $1.043 billion for Q3 2014. Intel had a goal of putting Atom in to 40 million tablets in 2014, and the plan to do this was to offset the costs of using Bay Trail instead of ARM SoCs, as well as help cover the engineering costs of moving to an Intel platform. While Intel is on track to exceed the original 40 million goal, it has done it at the cost of just over $3 billion to the Mobile and Communications Group bottom line for the nine months ended September 27th.

While this may seem at first glance as a way to move the losses into a profitable division, Intel has not yet decided whether the new divisions will be reflected in their financial reporting structure. So clearly this is not just about the numbers. What this appears to mean is that mobile and desktop will now be given the same priority, and possibly the same access to fabs. In the past, the newest fab nodes have been available for the Core processors first, with the lower margin Atom processors getting access at a later date. The Core processors moved to the Tick-Tock design process where each year a Die shrink (Tick) is alternated with a new microarchitecture (Tock) in 2006, but the Atom processor has just had its first new microarchitecture since 2008 with Silvermont replacing Bonnell. This puts Atom on 22 nm, and a schedule to move to 14 nm in 2015 with Airmont.

On the Core side, the Tick Tock strategy has been almost flawless, with Intel now dominating desktop processor benchmarks and sales. The strategy would likely work well for the mobile sector as well if it had been started several years ago. According to Chuck Malloy, a spokesman for Intel, “The idea is to accelerate the implementation and create some efficiency so that we can move even faster.”

At the same time this may also be a sign that Intel is reevaluating their chip design strategy, and where the line is drawn between Atom and Core. While Silvermont has proven to be no slouch, it is still a mobile focused chip with a narrow pipeline, as opposed to the wider pipeline, higher IPC designs of the Core family. In that sense Core has so far been something of a premium brand for Intel, reserved for higher value (higher margin) devices while Atom has gone into cheaper devices.

If Intel were to shift Core-like high-IPC designs into the Atom family - a distinct possibiltiy now that development for both is under the same roof - that could have a significant impact on Intel’s performance in the mobile market. Apple has already pursued a variant of this strategy to great effect, their Cyclone family of CPUs being very Core-like in design and frequently topping the performance charts in the process. However in the process Apple has thrown some very large (120mm2+) SoCs into their devices, something that helps their performance but would certainly give margin-centric Intel pause for thought.

Overall, although details are light this could signal a big change in the way Intel does business. If mobile gets the same sort of priority as the flagship Core series and the same sort of top-tier architectures, this could be of great benefit to Intel's CPU performance in the mobile space. At the same time, the PC division may also benefit from some of the mobile experience. As we have seen with Core M, Intel has focused a lot on overall package size and thickness. Moving the expertise in that area into the same division as the people responsible for the Core series could have benefits as well.

With this change just coming into effect at the start of 2015, it will not likely have any impact on Skylake or Airmont, however we could see some synergy in the follow up products.

Source: Wall Street Journal, Bloomberg, PCWorld

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  • SleepyFE - Tuesday, November 18, 2014 - link

    I don't think that will work. When a new line of products comes you expect it to be better then before. If they stick to the 100W CPU-s they are making for the desktop they will never make a 2W CPU. In 20 years 100W will still be 100W and your phone won't be able to handle that no matter what. If they start lowering power draw and performance their products will be weaker than those from AMD and they will lose the desktop and never gain the mobile. Reply
  • coburn_c - Tuesday, November 18, 2014 - link

    "Intel only has so many resources"

    Other way around. They cancelled the opening of their giant new Arizona 14nm fab because they didn't need the excess capacity.
    Reply
  • name99 - Tuesday, November 18, 2014 - link

    The issue is not fab capacity, it is design capacity. How many world-class chips can they actually design?
    Remember that to design a Core CPU takes at least 7 years. They generate one a year (or used to, until Broadwell...) by having 7 parallel design teams. The Atom upgrade took so long because that was one team which, after the shipped the first one, needed what, five years or so to create the next one.
    So are they going to tool up for six or seven parallel Atom teams --- while Atom is still losing money? Also some number of Xeon teams (I don't know how many) working mainly on uncore .
    Meanwhile there's at least one Phi team which is burning money on a product that has no obvious long term money making potential. And there's pathetic little Quark in the background --- at some point (too late) they'll have to introduce something competitive in that space.

    Even if you're Intel, it's hard to FIND that many good people and to pay them. And face it, if you're a hot shot designer, wouldn't you rather work at Apple or nV or ARM, somewhere where 90% of your time is spent on new ideas, rather than at Intel where 90% of your time is spent on stupid crap to ensure compatibility with some crazy design decision from 1982?
    Reply
  • Mikemk - Tuesday, November 18, 2014 - link

    "Microsoft's proven that it's foolish to chase mobility at the expense of your main line, so Intel should not make the same mistake now."
    Microsoft deals in software and user interface, not hardware. NVIDIA went the mobility over performance route, and look at their current line of GPUs. The 980 has the highest efficiency of any GPU, and the 980m brings incredible performance to laptops.

    I think that Intel focusing on mobile together with Core processors would help get the heat down, and then maybe we'll start seeing 5+ GHz stock clocks on desktops.
    Reply
  • name99 - Tuesday, November 18, 2014 - link

    You're missing the larger point. Intel is facing classic Innovator's Dilemma.
    Their heart is in making ever fancier, ever faster Core CPUs. BUT for most purposes now, most of that sophistication in a Core CPU, starting from the x86 ISA down, is not essential --- which means here is no compelling reason for customers to pay $300 for those features, when they can get an ARM that does the same job at $30.

    Intel kinda sorta knows it has to deal with this, but they haven't figured out a way. They want to apply the same segmentation crap they have used before, but it's no longer working. There was a time, for example, when if you wanted 4 cores, you'd have to pay desktop money --- no Intel 4 cores for your low-end netbook. Problem is, plenty of ARM vendors are willing to sell a 4-core system. Likewise for virtualization. Intel can try to keep those sorts of enterprise features out of their low-end, but turns out that some of them (things like TrustZone, or crypto instructions) are so essential that ARM ALREADY does them better than Intel, and the ARM vendors targeting servers are busily solving the problems of ARM virtualization.

    So Intel is kinda screwed on all dimensions. If they keep their Atoms crappy, fine, everyone will buy ARM --- Intel has nothing special in their Atoms that make them compelling unless you REALLY need x86 compatibility. But if they improve their Atoms, then those Atoms become good enough for many of the purposes that used to require a CPU at 4 or 5 times the cost.

    As if that weren't bad enough, they're facing the same problem on the server side. It's not obvious yet, but in a year or two it will be. Once again ARM vendors are willing to sell the same thing as Intel at half the cost. The ONLY advantage Intel has is x86 ISA, and that's becoming less and less important by the month. Once again Intel wants to limit all its weirdly acronymed Enterprise features to the expensive Xeons, but ARM vendors will give you those same features as part of the package on their low-end server chips.

    Few companies have handled this sort of transition gracefully. Apple has --- they were willing to let iPhone cannibalize iPod, and iPad to cannibalize MBA (if in fact this happens --- some claim it does, though I doubt it). But for Intel it means having to match ARM prices, which is likely impossible the way Intel is currently set up. Intel probably COULD become the dominant ARM vendor if they were willing to accept the ARM ISA. But they are committed to x86, and the cost that that imposes in design overhead and verification makes it economically impossible for them to compete.
    It'll be very interesting to see how their pricing structures and product segmentation evolve over the next two years...
    Reply
  • Kidster3001 - Wednesday, November 19, 2014 - link

    Your arguments make sense if cost is the only concern. They fall apart if you have any desire at all for performance. Intel's price/performance ratios can't be beat in servers. Silvermont is also better perf/watt than current Qualcomm cores. The rest of the SOC (Baytrail) is not so great, but the CPU cores are very good. Reply
  • DesDizzy - Thursday, November 20, 2014 - link

    Thanx for your excellent summary of strategic position. Reply
  • pugster - Tuesday, November 18, 2014 - link

    I doubt that Intel wants to compete with AMD at this point. The x86 cpu market has only 2 players left and if Intel decides to squeeze AMD out of the market the Anti-trust police will come after Intel. In fact, Intel is not doing anything about AMD into the APU market and this market is going to be stagnant.

    Intel has severely miscalculated the mobile market early on and now is paying the price. Intel always been selling of ditching divisions that is not making money just because of short term reasons like getting rid of their StrongARM business years back. Even so, Intel is doing things half-assed in their mobile dept because they are making chips in 22nm when they can make it at 14nm. Intel should be thinking of putting their chips on cell phones where there is a bigger profit margin compared to tablets where they can't compete of the likes of allwinner.
    Reply
  • przemo_li - Wednesday, November 19, 2014 - link

    Mobility is not fad.

    Its bigger then whole Intel.

    Now Intel want to be bigger, and mobility is out there for grabbing. They just need tools to do that.
    Reply
  • jimjamjamie - Tuesday, November 18, 2014 - link

    Whatever gets rid of these useless Atoms (as they are now) is fine by me. Reply

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