Intel Corporation (NASDAQ:INTC) has announced that it is changing the way that it organizes its earnings to better showcase its efforts to move into the mobile computing space, one week before it is expected to report on 1Q14, (h/t Don Clark and Anna Prior at The Wall Street Journal).
Operating income will be divided into six groups
Operating income will be broken down into six groups: PC Client, Data Center, Internet of Things, Mobile and Communications, Software and Services Operating, and All Other. While there is a bit of reshuffling among the other categories, the main change is the addition of the Internet of Things group, described as, “Delivering platforms designed for embedded applications for medical, automotive, industrial, retail, and other market segments; as well as software-optimized products for the embedded and mobile market segments,” in the company’s announcement. It will include embedded chips that used to be under the Intelligent Systems group as well as Wind River Software, formerly part of the services operating segment.
Intel Corporation (NASDAQ:INTC)’s PC Client group includes platforms designed for notebooks, desktops, connectivity products, and set-top box components. The Data Center group reports on platforms designed for servers, workstations, large scale data storage and networking. The Software and Services Operating segment is made up of McAfee security products (anti-virus software is the most famous example, but this also includes network and content security, risk and compliance, and other services), and the Software and Services group which encourages development on Intel platforms.
Mobile and Communications deals with earnings from platforms designed for tablets and smartphones, as well as other communications components (Bluetooth, Wi-Fi, GPS, radio frequency transceivers). Intel Corporation (NASDAQ:INTC)’s miscellaneous All Other group includes non-volatile memory solutions, the netbook group, the new devices group that is focused on wearable technology, and other corporate earnings such as asset impairments, acquisition costs, results from startup investments and Intel’s foundry business.
Intel’s New Devices group gets tossed into catch-all category
It’s interesting that Intel Corporation (NASDAQ:INTC) has put its wearable devices group into the All Other group when it could reasonably be included in either the mobile and communications group or the Internet of Things group. The dividing line between a large smartphone and a small tablet is already pretty subjective, and as mobile computing categories continue to grow those divisions will start to look even more arbitrary. Most likely, the division in reported earnings reflects a real organizational distinction within the company, but it seems like it should be included in either one or the other.