Intel axed its entire smartwatch and fitness-tracker group to focus on augmented reality, sources say
- Intel laid off about 80 percent of the team that made the Basis smartwatch in November, and has now eliminated the division entirely, a person familiar tells CNBC.
- Intel has been slowly de-emphasizing its wearables business since making a big push around the area in 2014.
Intel has axed the division that worked on health wearables, including fitness trackers, according to a person familiar with the matter.
The company has been slowly de-emphasizing its own line of wearables for the past several years, and has not mentioned wearables on its earnings calls since 2014.
In November, TechCrunch reported that the company was planning to take a step back from the business after its acquisition of the Basis fitness watch didn't pan out as expected. Intel denied at the time that it was stepping back.
But a source told CNBC that the chip maker in fact let go about 80 percent of the Basis group in November. Many of the people were given the opportunity to relocate to other parts of the business.
About two weeks ago, Intel completely eliminated the group, this person said. The company's New Technologies Group, which looks at cutting-edge business areas, is now focusing on augmented reality, another source told CNBC.
Intel once hoped that it would rule the wearables category alongside such players as Apple and Fitbit. Back in 2014, the company partnered with celebrities like 50 cent to show off its heart-rate sensing earbuds. Also in that year, it shelled out roughly $100 million for Basis.
"I want to be able to leave my phone at home," Intel CEO Brian Krzanich told reporters in January 2014 during a keynote the Consumer Electronics Show. "We will get there."
On its web site, Intel continues to advertise its Curie chipset for connected Internet of Things devices, including wearables, alongside partnerships with watch makers like Tag Heuer.
Intel is scheduled to report Q2 earnings after the bell on Thursday, July 27.
Here's a video from back when Intel was talking up its wearables strategy in 2014:
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