More Mobile, More Problems for Intel

More Mobile, More Problems for IntelIntel is dealing with some seriously hefty out-flow.

According to Lucian Armasu of Tom’s Hardware it doesn’t matter that Intel actually had a decent year, reaching $55.9 billion in revenue and $11.7 billion in profits last year. Intel’s mobile division underperformed, bleeding more than $4 billion, adding to the $3.1 billion it lost the year before.

In other words, Intel has blown $7 billion in mobile in the last two years. That’s more dough than many chip firms are even making in the current marketplace.

Why the Intel losses?

“The company invests heavily in mobile from R&D to marketing, but the single biggest factor is that Intel has been essentially paying OEMs to use its chips in devices,” explains Armasu. “This is why we can see Atom-based tablets such as the Nokia N1 cost only $250, despite having specs similar to a $400 iPad Mini 3.”

Industry insiders believe it’s a short term loss for Intel that the company hopes will lead to long term survival.

“Intel hopes that by getting enough OEMs to use its chips, even if it has to pay those companies, Atom processors will become more popular in the mobile market with consumers, who will then begin to demand Atom devices from OEMs,” Armasu adds.

What will happen in 2015? That may be hard to discern, especially with Intel discontinuing its reports on mobile reports to shareholders. It’s a move Intel can get away with by integrating its mobile and PC divisions.