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Intel culls consumer electronics operation

No more cheap plastic peripherals

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Intel is ridding itself of its cheap plastic toy operation, better known as the Connected Products Division.

The chip giant yesterday confirmed that it will sell off its existing stock of blue'n'white-hued digital cameras, Web cams, microscopes, keyboard, mouse and MP3 players, but not more of the gadgets will be produced.

We can't say we're surprised. Intel has been shutting down or slimming its non-core operations throughout the year, starting with its iCat business, an e-commerce software and hosting unit of Intel's Online Services division. Soon after it shut its streaming video division, Intel Internet Media Services, with the loss of 200 jobs.

In March, its Internet services wing "redeployed" up to 600 workers - staff are helped find other work inside Intel, or a offered severence if no suitable jobs can be found.

The move to close the Connected Products Division comes in addition to the giant's plan to shed 5000 staff this year. An Intel UK spokesman told us that plan was on target and that yesterday's closure was a "separate business decision".

All these operations were part of a bold attempt to move beyond the processor market by leaping on the Internet bandwagon. But with the Net bubble's rapid deflation last year and the the chip business slowing down as much as it has during this one, Intel has clearly had to retrench a little.

The decision was undoubtedly made easier by the business units' performance largely failing to meet senior management's expectations. "The business didn't meet our requirements for long-term growth potential," is how an Intel US spokesman put it last night.

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