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http://www.theverge.com/2016/5/3/11576216/intel-atom-smartphone-quithttp://recode.net/2016/05/02/intel-10-billion-on-mobile-before-giving-up/Intel’s new smartphone strategy is to quit  Many times Intel issues corrections or else has somebody spin doctor an unfortunate bad press release for them. So, we have waited a whole week now ....... and this abrupt cancellation is still with us. From the VergeLate on Friday night, Intel snuck out the news that it’s bailing on the smartphone market. Despite being the world’s best known processor maker, Intel was only a bit player in the mobile space dominated by Qualcomm, Apple, and Samsung, and it finally chose to cut its losses and cancel its next planned chip, Broxton. This followed downbeat quarterly earnings, 12,000 job cuts, and a major restructuring at a company that’s had a very busy April. Intel is still one of the giants of the global tech industry, but it’s no longer as healthy and sprightly as it used to be.
The bane of Intel’s existence for the past decade or so has been the transition to mobile computing. It wasn’t supposed to be that way. Having secured a commanding lead as the premier provider of desktop PC processors, Intel had a clear-eyed strategy for extending its dominance into the mobile realm.
A SERIES OF IGNOMINIOUS FAILURES HAS LEFT INTEL REELING
With the help of Microsoft in 2006, Intel inaugurated the category of Ultra-Mobile PCs (UMPCs), which were the stylus- and touch-friendly precursors to today’s ultra-versatile tablets. They combined low-voltage Celeron and Pentium M chips with Windows Vista, and like everything else touched by Vista, they flopped. Unattainable pricing and inadequate battery life consigned the UMPC to the status of a historical footnote. The same fate befell Intel’s Mobile Internet Device (MID) initiative, which saw the chipmaker pushing and incentivizing its hardware partners to build mini internet tablets like the Nokia N810. Pervasive problems with affordability, battery life, clunky design, and ill-suited software prevented MIDs from ever becoming a mass-market success.
On the software front, Intel recognized the need for a tailored operating system to make the most of mobile PCs and sought to develop its own Linux variant titled Moblin. Moblin never convinced anyone outside of Intel, and was eventually merged with Nokia’s Maemo to produce MeeGo, which in turn merged with Samsung’s Bada and is now known as Tizen. Well, it’s only barely known, even by owners of its most successful product, the Gear S2 smartwatch. The series of post-Moblin software mergers has been merely the consolidation of repeated mobile failures.
Read more: Intel spent more than $10 billion to catch up in mobile, then it gave up
Intel’s ventures into mobile hardware and software development show that even a great idea is only as good as its execution. The MIDs and UMPCs of yesteryear were aimed at the same usage scenarios as the phablets and pro tablets of today — but they were compromised and premature, and therefore rejected by the market.
This has cost Intel dearly, with the company lavishing billions on developing suitable processors and modems to put into its various mobile undertakings. The multibillion-dollar mobile costs have spiraled in recent years — a loss of $3.1 billion in 2013 was followed by a loss of $4.3 billion in 2014 — which eventually forced Intel to combine its mobile and PC earnings reports in order to disguise its unproductive spending.
The tragedy of Intel’s mobile failure is that the company foresaw all the threats to its business and acted to preempt them. It just didn’t do so very well. That being said, Intel’s the victim of its bad decision making almost as much as its poor execution.From Re/codeAfter missing the early days of the smartphone revolution, Intel spent in excess of $10 billion over the last three years in an effort to get a foothold in mobile devices.
Now, having gained little ground in phones and with the tablet market shrinking, Intel is essentially throwing in the towel. The company quietly confirmed last week that it has axed several chips from its roadmap, including all of the smartphone processors in its current plans.
It’s a stunning admission of failure that saw the company throw good money after bad in its bid to make up for lost ground.
“Suffice it to say, they likely lost well over $10 billion betting on mobile chips that never really got them anywhere,” said Jackdaw Research analyst Jan Dawson.
Calculating the exact amount of its losses is tricky, given that the company only reported the mobile business separately for two years before folding it back into another unit. In just that time, the mobile business posted a whopping $7.4 billion in operating losses. Much of that came as Intel agreed to pay device makers that used its chips to account for the fact that choosing Intel added other costs.
The hope was those companies would form a ready base of customers once Intel was ready with more competitive and cost-effective chips run just a year or two. Without such payments, Intel felt it would have had to wait several more years to regain a position in mobile chips.
Intel’s chips, though, ended up being neither timely nor competitive. And most agree that Intel was right to reverse course, even though it would have been better to have never gone down this road in the first place.
By the middle of 2014, Intel was losing more than a billion dollars per quarter on its mobile effort. It was enough to stifle progress on many fronts.
Intel’s mobile failure is not only measured in dollars, the loss of forward momentum is something that counts beyond dollars and cents. It leads to retrenchment, and that is both ugly and hard to do.
The chip giant is in the process of cutting its workforce by more than 12,000, with those involved in mobile chips among those expected to be hit hard. Intel is just now starting to notify workers and declined to go into details on the parts of the company that will be most impacted.
And, of course, there is the opportunity cost of where Intel could have invested all those billions had it not been hellbent on trying to reclaim lost ground in mobile.
The company did reach its target of shipping 40 million tablets in 2014, but that was one of the few mobile goals it reached. The tablet market stalled soon after and Intel failed to grab any significant chunk of the far larger smartphone market. Taiwan’s Asus had been the company’s biggest phone backer, but even it had started to pull back this year, shifting nearly all its models to other companies’ processors.
Intel isn’t out of the mobile business entirely. Although it has canceled several families of chips designed to serve as the main processor for phones and tablets, the company is still pushing hard to gain share in the market for modem chips, a secondary but nonetheless important part of phones.
With the roadmap changes, Intel will still be making chips for tablets, but more the big Windows 2-in-1 tablets designed to compete in the PC market than the low-end Android models. And any ambitions of powering smartphones will have to wait at least for 5G, meaning not until sometime in the next decade.
So the question is, what now for a PC giant that finds itself in a largely post-PC world?
“I think this is a sign of more realistic thinking at Intel and putting their investments where they’re more likely to pay off,” Dawson said. “Their main focus now appears to be on maintaining whatever they can in the legacy PC business and then trying to grow through data centers and Internet of Things applications. Data centers have been really good for them over the last few years, but Internet of Things is still really small.”
Plus, Internet of Things devices resemble the mobile market more than they do the PC market, so it’s not clear that Intel will have any more luck in that market.
In addition to all the money it spent to win business for its tablet chips, Intel invested a fortune to make sure that Android worked well on its processors and to make life easier for device makers that went with its chips. Intel executives liked to boast that Intel had the largest Android software team outside of Google.
It’s unclear what will become of that effort, though Intel still wants to make sure its chips are well suited for Chrome OS-based devices, one of the few bright spots in an otherwise bleak PC market.
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