Intel is on the verge of exiting the smartphone and tablet markets after cutting Atom chips

Intel is refocusing on 'products that deliver higher returns'

Intel could be on the verge of exiting the market for smartphones and standalone tablets, wasting billions of dollars it spent trying to expand in those markets.

The company is immediately canceling Atom chips, code-named Sofia and Broxton, for mobile devices, an Intel spokeswoman confirmed.

These are the first products on the chopping block as part of Intel's plan to reshape operations after announcing plans this month to cut 12,000 jobs.

The news of the chip cuts was first reported by analyst Patrick Moorhead in an article on Forbes' website.

Resources originally dedicated to Broxton and Sofia chips will be moved to "products that deliver higher returns and advance our strategy," Intel's spokeswoman said in an email.

Intel's mobile chip roadmap now has a giant hole after the cancellation of the chips. Intel's existing smartphone and tablet-only chips are aging and due for upgrades, and no major replacements are in sight. Sofia is already shipping, and Broxton was due to ship this year but had been delayed.

Intel is also discontinuing its Atom X5 line of tablet chips code-named Cherry Trail, which is being replaced by Pentium and Celeron chips code-named Apollo Lake, aimed more at hybrids than pure tablets. Many PC makers are already choosing Intel's Skylake Core M processors over Cherry Trail for hybrids and PC-like tablets.

Intel doesn't view tablets as a standalone market any longer, with form factors quickly merging. The company will continue to support current tablet customers with existing chips, the Intel spokeswoman said.

Some products were on tap to get axed after Intel said it would review product lines and projects while restructuring operations. Intel had already deemphasized its bread-and-butter PC business, and the plan to also cut the mobile chips may be smart.

The company poured billions of dollars into its mobile business, but Intel failed to unseat market leader ARM. Atom is available in just a handful of smartphones, and the tablet market is declining. PC makers are replacing tablets with detachable devices and hybrids.

The Atom product line has been in trouble for some time. Atom started off with a bang in netbooks, but its fortunes have sagged since then. Intel's mobile chip updates haven't followed a set timeline, and the last Atom chips for servers were released in 2013.

Intel's mobile strategy is now tied up with 5G, and resources originally dedicated to Sofia and Broxton could be redirected in making 5G chips and modems. The new 5G networks could provide 100 times faster data throughput than 4G, and deployments are expected to start around 2020.

The move to 5G could change the way devices are made. Beyond mobile devices, it will bring speedy mobile connectivity to PCs, smart home devices, robots, drones, wearables, and industrial Internet of Things devices.

The focus on 5G also explains the retention of key mobile executive Aicha Evans by Intel. Earlier this month, it was reported that she was leaving the company after a year of leading the mobile chip business. But she's a 5G expert and has already outlined the company's strategy in that area. She will be staying at Intel, though her role is unclear.

The commitment to 5G is a long-term play for Intel, much like its Centrino wireless strategy in 2003 that ultimately made Wi-Fi a ubiquitous feature in laptops. The 5G move also plays into Intel's preference to focus on future technologies.

Atom's future could also be in the fast-growing Internet of Things market, which the chip maker is betting on. Variants of the Broxton chip could be used in smart gadgets and sensor devices that collect telemetry, which is then sent to the cloud for analysis.

Intel's main focus will continue to be on Xeon server chips, cloud computing, field-programmable gate arrays (FPGAs), and silicon photonics.

Join the PC World newsletter!

Error: Please check your email address.

Our Back to Business guide highlights the best products for you to boost your productivity at home, on the road, at the office, or in the classroom.

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Agam Shah

IDG News Service
Show Comments

Cool Tech

Crucial Ballistix Elite 32GB Kit (4 x 8GB) DDR4-3000 UDIMM

Learn more >

Gadgets & Things

Lexar® Professional 1000x microSDHC™/microSDXC™ UHS-II cards

Learn more >

Family Friendly

Lexar® JumpDrive® S57 USB 3.0 flash drive 

Learn more >

Stocking Stuffer

Plox Star Wars Death Star Levitating Bluetooth Speaker

Learn more >

Christmas Gift Guide

Click for more ›

Most Popular Reviews

Latest News Articles

Resources

GGG Evaluation Team

Kathy Cassidy

STYLISTIC Q702

First impression on unpacking the Q702 test unit was the solid feel and clean, minimalist styling.

Anthony Grifoni

STYLISTIC Q572

For work use, Microsoft Word and Excel programs pre-installed on the device are adequate for preparing short documents.

Steph Mundell

LIFEBOOK UH574

The Fujitsu LifeBook UH574 allowed for great mobility without being obnoxiously heavy or clunky. Its twelve hours of battery life did not disappoint.

Andrew Mitsi

STYLISTIC Q702

The screen was particularly good. It is bright and visible from most angles, however heat is an issue, particularly around the Windows button on the front, and on the back where the battery housing is located.

Simon Harriott

STYLISTIC Q702

My first impression after unboxing the Q702 is that it is a nice looking unit. Styling is somewhat minimalist but very effective. The tablet part, once detached, has a nice weight, and no buttons or switches are located in awkward or intrusive positions.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?