Intel to close consumer electronics arm

Intel is phasing out its consumer electronics group, which the company saw as a way to boost demand for its primary chip products.

The Connected Products Division, which began selling digital cameras, digital-audio players and toys in 1997, will stop building electronic devices and sell the surplus inventory. This should take until the first quarter of next year.

Further manufacturing has been halted.

An Intel spokesman said that in the current economic climate, "the potential for sales and profits was not high enough." He added that the business did not meet Intel's requirements for long-term growth.

Employees from the Connected Products Division will be placed in the company's redeployment program, which provides workers with access to seek new jobs within the company within a specific period of time.

Should the workers not find a new position, severance packages will be offered to them.

Intel did not disclose how many workers were affected, but its spokesman did comment that "the chances of every employee finding a position within Intel is not likely."

Among the products to be phased out are the Pocket Home PC Camera, the Intel Personal Audio Player 3000, the Pocket Concert Audio Player, the Intel Play Computer Sound Morpher, Digital Movie Creator, and the QX3 Computer Microscope.

Intel emphasised that the company would continue to manufacture and sell its home networking products, including its AnyPoint home networking line. These come out of a different division.