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Intel’s mobile division lost $4.2bn last year

by on16 January 2015

PC business keeps growing

Intel reported its fourth-quarter earnings, beating analysts’ expectation and raising a few questions about its mobile business.

The company reported $3.7bn net income in Q4 2014 and revenues of $14.7bn. The revenue was in line with expectations, but analysts expected lower profits. Intel’s earnings were up $1.1bn year-on-year.

Strong finish to a record year

Intel CEO Brian Krzanich said the quarter was a “strong finish to a record year.”

“We met or exceeded several important goals: reinvigorated the PC business, grew the Data Center business, established a footprint in tablets, and drove growth and innovation in new areas,” said Krzanich. “There is more to do in 2015. We’ll improve our profitability in mobile, and keep Intel focused on the next wave of computing.”

The PC group did well, netting a total of $34.7bn in sales last year, up $1.4bn over 2013. Its profit was $14.6bn, making up about 95% of the chipmaker’s total profits.

Burning money on mobile

However, Intel’s mobile business was anything but profitable. The division reported a $4.2bn loss for 2014. Revenue was down 85% from 2013 and total sales amounted to just over $200m.

This of course does not paint a complete picture of Intel’s mobile business, since the company spent most of 2014 giving its chips away to anyone who would take them. Intel called it contra-revenue, but the rest of the industry called it subsidies. The practice is about to stop though. Intel is expected to discontinue the practice this year, but nothing is official yet. 

Moving forward, Intel’s mobile roadmap looks good and the burned billions weren’t in vain. Intel now has a number of tablet design wins, new 14nm SoCs are just around the corner, along with SoFIA and partnerships with several chipmakers like Rockchip.

Last modified on 16 January 2015
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