Intel is a big name in the desktop and laptop market, but its mobile efforts have not been very successful even though it is doing all it could to stay relevant in the market, which is dominated by Qualcomm, MediaTek, and Samsung. Now there are speculations that the chip maker will exit the mobile business altogether.

Intel Abandons Atom Chips, Probably Leaving Mobile Industry [UPDATED]

Intel’s decision has two ramifications

Recently, the chip maker announced plans to cancel its upcoming Atom processors code-named SoFIA and Broxton. Intel’s decision has two ramifications, says Ubergizmo.

First, “It obviously does Intel no favors to be cancelling products in the mobile space when they aren’t doing as well,” the website says, and second, it could impact the rumored Microsoft Surface Phone.

Previously, there have been reports that Intel could power the Surface Phone. However, some of the recent rumors hint that the handset could come with a Snapdragon 830 chipset. Microsoft might have learned of Intel’s plan and taken corrective action.

As of now, it is just a speculation, as Intel has not announced any plans to exit the mobile business.

Expensive failure for Intel

Intel invested billions in its mobile business but failed to topple ARM, the market leader. Intel’s Atom product line has not been faring too well. It started successfully with notebooks, but since then, it has been struggling.  Also Intel has not been very regular with mobile chip updates, and the last Atom chips for servers were launched in 2013.

With the cancellation of these chips, Intel’s mobile chip portfolio has been left incomplete. Its current smartphone and tablet-only chips are old and due for upgrades, but no major updates/replacements have been announced.

Now Intel’s mobile strategy could mostly be around 5G, and the resources dedicated to Sofia and Broxton could be diverted towards making 5G chips and modems. Compared to 4G, the new 5G networks — deployments expected to start around 2020 – could provide 100 times faster data throughput.

On Friday, Intel shares closed down 2.67% at $30.28. Year to date, the stock is down by over 13%, while in the last year, it is down by over 9%.

Update: Intel has confirmed that they are not cancelling Cherry Trail Atom x5 and x7. Here is their statement:

We are committed to long-term leadership and improved profitability of our mobile business and the decision to cancel Broxton for phones and tablets and SoFIA 3Gx/LTE/LTE2 enable us to move resources to products that deliver higher returns and advance our strategy.

There were some reports that Cherry Trail was also discontinued. That is not accurate. We will continue to ship Cherry Trail Atom x5 and x7, and we will continue to work with OEMs to develop new 2 in 1s based on Apollo Lake and of course Core M for detachable 2 in 1s.”

The article has been updated to reflect the same.