| Operating Segments |
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NOTE 4 : |
OPERATING SEGMENTS |
We manage our business through the following operating segments:
We offer platform products that incorporate various components and technologies, including a microprocessor and chipset, a stand-alone SoC, or a multichip package. A platform product may be enhanced by additional hardware, software, and services offered by Intel. Platform products are used in various form factors across our DCG, IOTG, and CCG operating segments. We derive a substantial majority of our revenue from platform products, which are our principal products and considered as one class of product.
DCG and CCG are our reportable operating segments. IOTG, Mobileye, NSG, and PSG do not meet the quantitative thresholds to qualify as reportable operating segments; however, we have elected to disclose the results of these non-reportable operating segments. Our Internet of Things portfolio, presented as Internet of Things, is comprised of the IOTG and Mobileye operating segments.
We have sales and marketing, manufacturing, engineering, finance, and administration groups. Expenses for these groups are generally allocated to the operating segments.
The "all other" category includes revenue and expenses such as:
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results of operations from non-reportable segments not otherwise presented;
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historical results of operations from divested businesses;
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results of operations of start-up businesses that support our initiatives, including our foundry business;
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amounts included within restructuring and other charges;
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a portion of employee benefits, compensation, and other expenses not allocated to the operating segments; and
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acquisition-related costs, including amortization and any impairment of acquisition-related intangibles and goodwill.
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The CODM, who is our CEO, allocates resources to and assesses the performance of each operating segment using information about the operating segment's revenue and operating income (loss). The CODM does not evaluate operating segments using discrete asset information and we do not identify or allocate assets by operating segments. Based on the interchangeable nature of our manufacturing and assembly and test assets, most of the related depreciation expense is not directly identifiable within our operating segments, as it is included in overhead cost pools and subsequently absorbed into inventory as each product passes through our manufacturing process. Because our products are then sold across multiple operating segments, it is impracticable to determine the total depreciation expense included as a component of each operating segment’s operating income (loss) results. Operating segments do not record inter-segment revenue. We do not allocate gains and losses from equity investments, interest and other income, or taxes to operating segments. Although the CODM uses operating income to evaluate the segments, operating costs included in one segment may benefit other segments. Except for these differences, the accounting policies for segment reporting are the same as for Intel as a whole.
Net revenue and operating income (loss) for each period were as follows:
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Years Ended (In Millions) |
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Dec 28,
2019 |
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Dec 29,
2018 |
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Dec 30,
2017 |
Net revenue: |
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Data Center Group |
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Platform |
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$ |
21,441 |
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$ |
21,155 |
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$ |
17,439 |
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Adjacent |
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2,040 |
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1,836 |
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1,625 |
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23,481 |
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22,991 |
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19,064 |
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Internet of Things |
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IOTG |
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3,821 |
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3,455 |
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3,169 |
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Mobileye |
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879 |
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698 |
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210 |
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4,700 |
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4,153 |
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3,379 |
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Non-Volatile Memory Solutions Group |
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4,362 |
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4,307 |
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3,520 |
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Programmable Solutions Group |
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1,987 |
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2,123 |
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1,902 |
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Client Computing Group |
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Platform |
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32,681 |
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33,234 |
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31,226 |
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Adjacent |
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4,465 |
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3,770 |
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2,777 |
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37,146 |
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37,004 |
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34,003 |
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All other |
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289 |
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270 |
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893 |
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Total net revenue |
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$ |
71,965 |
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$ |
70,848 |
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$ |
62,761 |
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Operating income (loss): |
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Data Center Group |
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$ |
10,227 |
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$ |
11,476 |
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$ |
8,395 |
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Internet of Things |
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IOTG |
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1,097 |
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980 |
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650 |
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Mobileye |
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245 |
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143 |
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(28 |
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1,342 |
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1,123 |
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622 |
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Non-Volatile Memory Solutions Group |
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(1,176 |
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(5 |
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(260 |
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Programmable Solutions Group |
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318 |
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466 |
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458 |
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Client Computing Group |
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15,202 |
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14,222 |
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12,919 |
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All other |
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(3,878 |
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(3,966 |
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(4,084 |
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Total operating income |
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$ |
22,035 |
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$ |
23,316 |
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$ |
18,050 |
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Disaggregated net revenue for each period was as follows:
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Years Ended (In Millions) |
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Dec 28,
2019 |
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Dec 29,
2018 |
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Dec 30,
2017 |
Platform revenue |
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DCG platform |
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$ |
21,441 |
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$ |
21,155 |
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$ |
17,439 |
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IOTG platform |
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3,440 |
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3,065 |
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2,645 |
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CCG desktop platform |
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11,822 |
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12,220 |
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11,647 |
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CCG notebook platform |
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20,779 |
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20,930 |
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19,414 |
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Other platform1
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80 |
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84 |
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165 |
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57,562 |
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57,454 |
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51,310 |
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Adjacent revenue2
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14,403 |
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13,394 |
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10,917 |
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ISecG divested business |
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— |
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— |
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534 |
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Total revenue |
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$ |
71,965 |
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$ |
70,848 |
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$ |
62,761 |
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1 |
Includes our tablet and service provider revenue. |
2 Includes all of our non-platform products for DCG, IOTG, and CCG, such as modem, Ethernet, and silicon photonics, as well as Mobileye, NSG, and PSG products
In 2019, our three largest customers accounted for 41% of our net revenue (39% in 2018, 40% in 2017), with Dell Inc. accounting for 17% (16% in 2018, 16% in 2017), Lenovo Group Limited accounting for 13% (12% in 2018, 13% in 2017), and HP Inc. accounting for 11% (11% in 2018, 11% in 2017). These three customers accounted for 39% of our accounts receivable as of December 28, 2019 (45% as of December 29, 2018). Substantially all of the revenue from these customers was from the sale of platforms and other components by the CCG and DCG operating segments.
Net revenue by country as presented below is based on the billing location of the customer. Revenue from unaffiliated customers for each period was as follows:
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Years Ended (In Millions) |
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Dec 28,
2019 |
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Dec 29,
2018 |
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Dec 30,
2017 |
China (including Hong Kong) |
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$ |
20,026 |
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$ |
18,824 |
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$ |
14,796 |
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Singapore |
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15,650 |
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15,409 |
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14,285 |
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United States |
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15,617 |
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14,303 |
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12,543 |
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Taiwan |
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10,058 |
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10,646 |
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10,518 |
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Other countries |
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10,614 |
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11,666 |
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10,619 |
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Total net revenue |
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$ |
71,965 |
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$ |
70,848 |
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$ |
62,761 |
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