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Intel folds Xscale business into comms group

Wireless chief quits

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Intel will merge its communications and wireless computing wings into a single business unit, the chip giant said yesterday.

Essentially, the Wireless Communications and Computing Group (WCCG) will be incorporated into the existing Intel Communications Group (ICG), currently run by Intel Executive VP Sean Maloney, who will manage the combined operation.

Conveniently for Intel, WCCG chief Ron Smith plans to retire in three weeks or so.

ICG will assume WCCG's product portfolio, which includes the XScale line of ARM-based processors and support chips.

The announcement of Smith's departure and the merger of his Group into Maloney's fiefdom comes a week after the chip maker said it was taking a $600 million hit during Q4, because the WCCG business is not now expected to grow as much as previously thought.

"The wireless group is performing worst than we expected," said Intel CFO Andy Bryant last week. "There is no good will associated with Flash. Baseband is performing less than we expected."

The charge also relates to Intel's 1999 acquisition of mobile phone chipset maker DSP Communications. "The vast majority (of the charge) is DSPC," said Bryant. "We're at a point we need to write off DSPC."

Intel said the charge will knock six cents per share off its quarterly earnings. ®

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