Intel refocuses and exits desktop motherboard business

Computerworld - Intel's decision to leave the desktop motherboard business is a smart move in a troubled market, analysts said Wednesday.

Intel confirmed to Computerworld on Wednesday that it will slowly back off the desktop motherboard business over the next three years. Intel spokesman Dan Snyder said the company would not comment on the number of employees affected.

"As Intel gradually ramps down its motherboard business, we are ramping up critical areas of the desktop space," Snyder wrote in an emailed statement.

"The internal talent and experience of 20 years in the boards business... is being redistributed to address emerging new form factors -- desktop and mobile -- and to expand Intel's Form Factor Reference Design work and enable our partners to develop exciting new computing solutions," he added.

"Intel is just exiting its desktop motherboard business, the spokesman said, noting that its server board business is "alive, well and growing."

Intel noted, however, that the desktop PC market continues to be a major focus for the company.

Considering how badly the PC market has struggled over the past year, Charles King, an analyst at Pund-IT, said it sounds like a smart move for Intel to make.

"It seems pretty straightforward," he said. "Given the long-term declines projected for desktop PC sales, I expect it was mostly a tactical business decision based on moving employees into areas -- mainly mobile products -- where profitability is higher."

There has been some speculation online that Intel's move out of the motherboard business means that the world's largest chip maker is angling to pull out of the PC market altogether. That would be a big leap and an unwise move for a company that still generates a lot of revenue off PCs, analysts noted.

Rob Enderle, an analyst at Enderle Group, said PCs are still lucrative to Intel, which is why the company isn't giving up on them.

"There are plenty of motherboard makers who are chasing Intel's leading technology now, and these resources could be better spent in areas where Intel is having bigger problems, like tablets and smartphones," Enderle said. "Building motherboards was to address a problem that currently doesn't exist anymore. They aren't abandoning PCs. They are abandoning a strategy that no longer fills a critical purpose."

Sharon Gaudin covers the Internet and Web 2.0, emerging technologies, and desktop and laptop chips for Computerworld. Follow Sharon on Twitter at @sgaudin and on Google+, or subscribe to Sharon's RSS feed . Her email address is sgaudin@computerworld.com.

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