Why Is Intel Corporation Struggling In The Wearables Business?

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Intel’s wearable device range Basis was not well-known among customers, and now the company has reportedly planned to end some of its wearable products. So it is quite natural to wonder what is wrong with Intel’s wearables.

Discontinuing products

Intel integrated Basis, which it acquired in 2014, with its New Devices Group (NDG), a new unit to support its wearable ambition. Apart from Basis, the chip maker made a few more acquisitions in this area, such as smart eyewear maker Recon. Intel’s NDG was able to push out gadgets such as the Basis Peak and Basis Titanium. However, the Basis Peak was permanently pulled out shortly after reports of overheating issues, says Techtimes.

Also the chip maker ceased making proprietary software for the Peak. A notification on the Basis website says the chip maker is closing the service on Dec. 31. Other smartwatches by Intel’s wearable department could be also phased out at some point.

It appears that the company’s wearable challenges are not just limited to one faulty device. There were no new announcements related to the Basis range, and there was no talk about Recon either. Also the launch of the Basis Ruby, a new smartwatch, has been stopped, says Techtimes.

Intel says it is staying in wearables

Citing insider sources, TechCrunch says the chip maker is not pleased with its NDG unit, and the affected employees have been informed that will stay only until the year’s end.

However, according to Engadget, the chip maker has no intention of moving out of wearables, and in fact, it has “several products” in the pipeline.

“Intel is in no way stepping back from the wearables business. In fact, we have several products in the works that we are very excited about, as well as prior launches that highlight our wearable technology such as the TAG Heuer Connected watch and recent Oakley Radar Pace smart eyewear,” the chip maker told Engadget.

Since the company is still in the nascent stages in wearables, even if it does step back from the segment, it wouldn’t be a substantial cutback compared to the cuts that were announced in April, when the chip maker planned to cut 12,000 jobs. Intel could focus on promising business segments like drone technology, virtual reality and autonomous driving. However, if it pulls out of wearables, it will lose a big market which analysts believe to be worth $25 billion by 2019, according to Techradar.

At 9:50 a.m. Eastern, Intel shares were up 0.37% at $35.08. Year to date, the stock is up almost 2%, while in the last six months, it is up more than 16%

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