Intel’s hardware powers the vast majority of PCs out there, as it always has, but the company wasn’t able to bring this dominance over to the mobile market when smartphones started to become popular. Rather than using its near complete market dominance to stifle the competition, as Intel did with the PC market, the company has been forced to lose billions of dollars just to try and establish a position in the market, but it looks like it’s all paying off.
Microprocessor manufacturing giant Intel — long known for its distinctive “Intel Inside” logo stickers that have graced the cases of high-end PCs for decades — has been spending a lot of money carving out market share in the rampantly competitive mobile device market. The company spent much of 2014 propping up mobile microprocessor shipment growth by subsidising its chips for partners, recording the transaction as “contra revenue”. Intel’s third-quarter financial results last year highlighted the strategy, revealing that its Mobile and Communications Group made revenue of just $1 million, while racking up a $1.04 billion operating loss. At the time, Intel CEO Brian Krzanich said that the company was likely to ship 10 million to 12 million mobile processors in the fourth quarter, to hit at least 40 million units for the full year. “We were losing billions of dollars to achieve the position we had in mobility … because we thought it was important to establish a position, but we truly changed the game in the last year,” Intel’s senior vice president and Client Computing Group general manager Kirk Skaugen told ZDNet.
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