Intel Forms Single Communications Group

The chipmaker is combining its communications-related businesses into one organization that will be called the Intel Communications Group.

Less than a week after saying it would take a $600 million fourth-quarter impairment charge related to its Wireless Communications and Computing Group, Intel said Wednesday that it's folding that business into its Intel Communications Group. Sean Maloney, already executive VP and general manager of Intel Communications Group, will be the head of the newly combined organization. Ron Smith, senior VP and general manager of the wireless group and a 26-year Intel veteran, will retire early next year.

"The big technology challenges are in the communications space," says Maloney, who's been with Intel since 1982. Maloney identifies broadband wireless as an important emerging technology in the communications space. The keys to success, he says, are delivering signal reach, quality, manageability, and security.

Intel makes the move to consolidate its communications businesses as the company comes to terms with the wireless group's shortcomings. Formed largely from Intel's $1.6 billion purchase of DSP Communications Inc. in 1999, some of the group's products have shipped late, which prevented Intel from getting the market traction it wanted, Andy Bryant, CFO and chief enterprise services officer, said during last week's fourth-quarter update. DSP Communications was a supplier of chipsets, reference design, software, and other technologies for wireless handsets.

One of Intel's few weak points during the third quarter was continued loss related to the wireless group. It posted an operating loss of $124 million on revenue of $450 million. For the third quarter a year ago, the loss was $30 million on revenue of $586 million.

News source: InformationWeek - Intel Forms Single Communications Group

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