Intel Should Exit Mobile, Analyst Says

Jessica Lipsky, EETimes
5/7/2014 07:30 AM EDT

SAN FRANCISCO — Analysts at JP Morgan are calling for Intel to shut down its mobile and communications group to improve corporate profitability in the wake of poor earnings per share in the first quarter of 2014. But the x86 giant and at least one other analyst said the company should stay the course in the hotly competitive smartphone and tablet market.

“We continue to believe mobile is unprofitable for Intel," a JP Morgan statement read:

We continue to believe Intel will lose money and not gain material EPS from tablets or smartphones due to the disadvantages of x86 versus ARM and overall low profitability of the tablet and handset processor market. If Intel were to shut down its mobile business, we estimate it could unlock roughly $0.50 in 2015 EPS.

The mobile and communications group saw a $3.1 billion operating loss in 2013, with 1Q 2014 losses hitting $929 million and revenues at $156 million. While Intel officials acknowledged the loss, several were quick to call recent financial numbers an “investment” in the mobile ecosystem.

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