Intel Corp. is planning a bit of a structural shakeup, announcing that it will combine its PC and mobile chip groups into a single entity after struggling to crack the mobile device market.

The shakeup was announced via an email sent to employees from CEO Brian Krzanich on Monday. The plan will be implemented early next year, with the two divisions set to merge into a new ‘Client Computing’ division, Intel spokesman Chuck Mulloy told The Wall Street Journal.

“The market continues to evolve rapidly, and we must change even faster to stay ahead,” Krzanich wrote in the email, which was seen by the WSJ.

The newly formed group will be led by Kirk Skaugen, a senior vice president who currently runs Intel’s PC Client Group. It’s said that the new division will also swallow up processors and modem chips used in mobile devices, which used to be part of Intel’s Mobile and Communications Group.

Intel created its mobile group back in 2011 when it merged four divisions: mobile communications, mobile wireless, netbook and tablet, and ultra mobility. The new transition will be overseen by Hermann Eul, who hopped aboard the Intel ship back in 2011 when it acquired his company Infineon Technologies AG.

Intel’s mobile misery

Inte’s Mobile and Communications division was at one time perceived to be its most critical unit from a future growth perspective, but things haven’t gone to plan. In fact, the division has been bleeding cash, posting an operating loss of $1.04 billion in its most recent Q3 results, while sales over the same period were down 98 percent from the previous quarter.

In short Intel’s mobile strategy has so far been a failure. Mobile device makers prefer the more versatile and more powerful ARM-based SoCs that dominate the mobile market.

While Intel isn’t throwing in the towel, it’s unclear how it will turn things around. Cynics might see this restructuring as an effort to disguise how badly Intel is performing in the mobile market because the results will be less obvious when the two divisions are combined.

The move does make sense from a business perspective, though. Smartphones and tablets are becoming more powerful by the day, and the market is redefining what a computing device actually is. By combining its two units, Intel shows it recognizes this change, and more importantly it’s saying it doesn’t matter what kind of device you buy – it has a chip to power it.

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