Daily Management Review

CNBC: Intel leaves the wearable gadgets market


07/21/2017


Intel company has dismissed a department engaged development of in fitness trackers and other worn electronics. Back in November last year, the chip maker laid off 80% of the team that developed the Basis smart watch, and has completely liquidated the department two weeks ago.



Chris Potter
Chris Potter
Intel Corp. has disbanded the department that develops wearable electronics, CNBC reported citing informed sources. Now the New Technologies Group division, which focuses on advanced business areas, has shifted the focus to augmented reality.

Intel placed high hopes on wearable gadgets just a few years ago. So, in 2014, the corporation acquired Basis Science company, which developed devices for monitoring and analyzing physical activity. And in 2015, Intel bought a Canadian developer of smart glasses Recon.

At CES 2014, Intel’s CEO Brian Krzanich said that he would like to be able to leave his phone at home, and this day will come someday. However, the company reduced approximately 80% of Basis’ state already in November 2016 (some employees moved to other departments), and just a few weeks ago the unit was completely disbanded.

If today's rumors are confirmed, it will be Intel’s second major project closed in recent months: in June the company has already refused to develop competitors Raspberry Pi. As for Intel itself, the company has not confirmed these rumors yet. But it is possible that the relevant announcement will be made already on July 27 - during publication of Intel’s quarterly report.

According to results of the first three calendar months of 2017, Intel's revenue reached 14.8 billion, which is 8% more than a year earlier. The adjusted profit, which does not take into account a number of irregular sources of income and expenses, was 66 cents per share, while analysts surveyed by Thomson Reuters I/B/E/S expected 65 cents per share on revenue of $ 14.81 billion.

Intel’s revenue growth was boosted by 6% year-on-year sales of computer processors, which bring the company more than half of the revenue. Operating profit in this business jumped by 61% due to the sale of expensive chips. Revenues of the unit amounted to $ 7.976 billion.

Intel’s operating cash flow was $ 3.9 billion in the past quarter. The company paid dividends totaling $ 1.2 billion, and also spent $ 1.2 billion to purchase of 35 million of its own shares.

The Board of Directors of Intel approved a new program for the purchase of shares for $ 10 billion, and taking into account the funds remaining from the previous program, the total amount allocated by the company for the purchase of shares is about $ 15 billion.

According to Intel's forecasts, the company's total revenue in 2017 will reach $ 60 billion, and adjusted earnings will be $ 2.85 per share.

source: cnbc.com






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