Intel Corp, whose products dominate the world of computing, said that it is going to wind down a multibillion-US dollar, multidecade effort to grab a viable stake of the mobile phone industry.
After its one significant customer, Apple Inc, said it would return to using Qualcomm Inc chips, Intel on Tuesday announced it would exit the 5G smartphone business, and complete an assessment of the opportunities for existing chips and 5G modems in personal computers.
“The company will continue to meet current customer commitments for its existing 4G smartphone modem product line, but does not expect to launch 5G modem products in the smartphone space, including those originally planned for launches in 2020,” the Santa Clara, California-based company said in a statement.
Intel chief executive officer Bob Swan, who stepped up from the chief financial officer role in January, is stopping an effort that his predecessors poured billions of US dollars into over the years.
With Apple as an exclusive customer, Intel has still struggled to make money in modem chips, even as its position in other markets has fueled revenue and profit growth.
The new 5G wireless systems would provide an opportunity for Intel to sell more chips for networking use, rather than in phones, Swan said in the statement.
“In the smartphone modem business it has become apparent that there is no clear path to profitability and positive returns,” he said.
Analysts had speculated that the ascension of a leader from a financial background to Intel’s top job would prompt a reassessment of some business units that have not delivered.
Intel has struggled to win customers as the phone market eclipsed the personal computer industry in volume, and smartphones became more like computers.
Before combining the mobile business into its PC chip division, the company reported losses of billions of US dollars as it paid out subsidies to try to woo phone and tablet makers.
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