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Intel to merge mobile and PC divisions amid mobile losses

Nov 18, 2014 — by Eric Brown — 836 views

Intel is planning to merge its struggling mobile division with its PC division, and Rockchip released an ARM mobile SoC that was developed with Intel.

Intel CEO Brian Krzanich recently sent an email to employees saying the company plans to merge its mobile computing division with its PC-Client group, according to the Wall Street Journal. In mid-2015, the PC-Client and mobile groups will combine under the leadership of Kirk Skaugen, currently a Senior Vice President at the PC-Client group.

The news that Intel’s struggling mobile unit is being revamped is not as surprising as the fact that it’s working with Rockchip to build a new ARM-based SoC called the XMM 6321 that includes Intel modem chips. Yet, the ARM collaboration appears to be more a matter of convenience rather than a long-term trend (see farther below).

Intel’s mobile business was small to begin with, despite pouring billions into the effort over the last half decade, but some early progress in tablets, if not smartphones, has not been enough to turn the tide. The chipmaker reported a $1.02 billion operating loss in the third quarter, following similar losses in 2Q. Third quarter revenues dropped $1 million compared to $353 million in 3Q 2013.

Toshiba’s Atom-based, 7-inch Excite Pro tablet
(click images to enlarge)

As promised, Intel is expected to ship 40 million tablet processors in 2014. Most of them use the Atom Z3000 (Bay Trail-T) system-on-chip. Atom-based tablets include the Toshiba Excite Go.

Many of these tablet processors, however, were heavily subsidized by Intel to help jumpstart the market, thereby reducing revenues and profits. Despite lower power consumption on the 22nm Z3000 chips, Android tablet makers and consumers have generally preferred more power efficient, more affordable, and increasingly fast multicore ARM SoCs. It hasn’t helped Intel’s cause that Windows tablets have faltered in the marketplace, and many of those used ARM chips, anyway.

Meanwhile, the 22nm Atom Z3400 (Merrifield) has failed to attract much interest among smartphone vendors. Intel’s mobile group does not, however, cover the Atom E3800 (Bay Trail-I) embedded SoCs, which appear to be doing fine.

Performing even better these days are Intel’s PC processors, having rebounded from a dip in recent years. Intel’s PC business recently reported a profit of $4.12 billion. By combining the PC and mobile groups, Intel appears to hope for some synergy, not to mention better management of its mobile chip business.

Rockchip and Intel partnership starts with ARM

Like many companies in the mobile business over the last year, Intel has pivoted to address the still largely untapped business in low-end smartphones and tablets aimed at budget consumers and emerging markets. Now, China-based Rockchip Electronics (Fuzhou Rockchip Electronics Co.) has released a XMM 6321 SoC designed in collaboration with Intel that’s aimed at entry-level Android tablets, phablets, and smartphones. Interestingly, the SoC uses dual ARM Cortex-A5 cores, as well as a built-in 3G baseband designed by Intel.

Rockchip XMM 6321 overview slide
(click image to enlarge)

A year ago, Intel announced an upcoming dual-core Sofia Atom SoC targeted at the low-end smartphone market. The Sofia was notable on several levels. It was intended to be the first 14nm Atom processor, the first to be built by a third-party foundry (then unnamed), and the first with an integrated baseband chip.

Earlier this year, Intel announced a strategic agreement with Rockchip to license a different, quad-core, 14nm-fabricated Sofia Atom for Rockchip SoCs aimed at entry-level Android tablets. Under the agreement, the SoC platform for “entry and value tablets” would be Intel branded, and both Intel and Rockchip would “sell the new part to OEMs and ODMs, primarily into each company’s existing customer base,” said Intel at the time.

The Sofia was said to initially use 3G circuitry, with plans to move to 4G LTE in 2015. At the time, Intel said it hoped to bring the manufacturing in-house by the end of 2015.

In September, around the same time that Intel announced a $1.5 billion investment in China’s Tsinghua Unigroup, whose fabless mobile chip design centers will co-develop Intel Architecture based SoCs for mobile phones in 2015, Digitimes reported that the Intel/Rockchip alliance was alive and well. “Through Rockchip’s ecosystem in China, Intel is hoping to start up a wafer OEM business and will gradually turn to focus on customized x86 chip products to make price-friendly and competitive products that are more suitable for emerging markets,” wrote Digitimes.

A month later, it was revealed that Intel and Rockchip were collaborating first on the XMM 6321, an ARM-based SoC incorporating the Intel-built integrated 3G baseband. At the time the Motley Fool’s Ashraf Eassa cautioned investors not to overreact and believe that Intel was ditching the Sofia for ARM chips. Rockchip had started working on the XMM 6321 before the Intel partnership, and Intel was collaborating on the SoC as a testing ground for its integrated baseband prior to implementing it in the Sofia SoC.

Rockchip XMM 6321 block diagram
(click image to enlarge)

According to Rockchip, the level of integration with the two-chip XMM 6321 “is so-far unmatched by any other 3G SoC platform.” The main chip is the XG632, which combines the dual, 1GHz Cortex-A5 cores with a GPU, IPS, video accelerator, and Intel’s 2G/3G modem. The other chip — the AG620 – is designed by Intel and Infineon. It provides communications functions including 2G/3G RF, WiFi, Bluetooth, GPS/GLONASS, and audio/PMU, says Rockchip.

The XMM 6321 is said to target 3.5- to 7-inch Android mobile devices, as well as smart terminal phones, set top boxes, and smart wearables. Already, says Rockchip, a Dubai manufacturer has ordered 100,000 units for a 7-inch phablet design.

“This new chip likely doesn’t mean too much for Intel from a revenue perspective,” wrote the Motley Fool’s Eassa in October. “The revenue per chip that Intel will be able to get from it is probably not high, and it’s not clear how many Intel will actually be able to sell. However, given that XMM 6321 apparently served as the springboard for Intel’s upcoming SoFIA product, I’d say that whether it generates a material amount revenue or not, it was still a worthwhile for Intel to develop it.”

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