When Intel acquired the Infineon modem business, that business was profitable with a competitive product. The problem: There was no LTE solution and that required a major investment that Infineon could not make. Why not? Because Infineon, unlike Qualcomm made money purely from modem sales, while Qualcomm makes huge amounts of money from patent licensing fees. That's why Qualcomm was and is ahead in LTE. Not a lack of skill on Infineon's behalf, but purely a lack of money. In fact, it is a bit of a slap in Qualcomm's face that Infineon ever managed to be competitive, seeing how much money Qualcomm is able to pour into R&D.
Anyway, then Intel took over, knowing FULL WELL that the modem business required a major investment to remain competitive. So Intel invested the money. But they made a lot of bizarre mistakes.
First mistake: Instead of building the LTE solution in-house, it was acquired from other companies, and the integration of that hardware and software and the respective teams cost a LOT of time and money and created huge quality problems that are still not fixed to this very day.
Second mistake: Intel completely lost the focus in the modem business and went after practically every potential customer, completely ignoring the objections from the German(!) experts who knew that there is a huge cost involved with customizing a modem for a wide range of products and customers. "Hey, minor tablet manufacturer, you need modems? Cool! How many? Ten thousand? Great! We'll ignore how many million Dollars it will cost to integrate and customize the modem for you. Oh, and we will sell those modems to you really cheap!" Intel thought they could sell a modem like PC/server processors. So we ended up with various platforms for e.g. tablets that never made money. You can't blame the Germans for that. Blame the Intel management in the US.
Third mistake: SoFIA. Aicha went from "This will be a great success" to "Ok, it's only a kind of explorative trial" really fast when it became apparent that Intel was not capable or willing to supply a chip that could compete with ARM. Again, huge losses with no ROI. Huge number of skilled engineers soaked up by a pointless project instead of focussing on important stuff. Another failure for which you can blame the Intel management in the US (and the inflexible processor design teams in the US).
Fourth mistake: Buying a bunch of engineers from Motorola. Kinda funny actually when Aicha keeps going on and on and on and on and on (really, I am sure I heard or read it a hundred times from her) about how Qualcomm is so much more efficient and then does her best to make iCDG less efficient by creating inorganic growth. I think most managers have understood by now that inorganic growth is the greatest efficiency killer for companies. Sadly, Aicha doesn't know that. And a lot of people had to repay that efficiency debt Aicha created by working overtime. Again, blame US management for that waste.
Fifth mistake: Opening a site in San Diego. First of all, it's again an example of inorganic growth. Second, while we were told how we had to cut costs, Aicha decided to open a site in one of the most expensive locations in the US. And for what reason? Try not to laugh: To attract Qualcomm talent. With Intel's comparably low salaries. Yes, Aicha actually believed that we could get top talent from the market leader by paying less than the market leader. What's more, Aicha kept complaining about site politics. And then she put the worst backstabbing site politicians in place to lead the San Diego site - people who would do anything to promote their site over others. Blame the US Intel management for that waste as well.
Still wondering where those billions of Dollars went?
Sixth mistake: Pandering to Apple - but in the most bizarre way. Instead of putting the best possible project management team in place, successful project managers from previous Apple projects were let go in ACT. Then, at first, the project was given to mostly big-customer-newbies. And a ship captain was put in place who is mostly a politician whose main talent is to convince management of his achivements while actually preferring his comfy Santa Clara office over the cramped customer office. People are flown in to Cupertino at huge cost instead of quickly building up a local team. And when the ship captain is finally asked to build up that local team, he hires his friends from previous projects instead of the best experts he can get. Blame the US Intel management for that.
Seventh mistake: Staying in the modem business. Yep, you read that right. The modem business is a loss business. No company other than Qualcomm will ever be profitable in the high end modem business, and Qualcomm is only profitable because they cross-finance R&D from licensing fees. Also, there is no market for standalone modems anymore. Period. Intel started an interesting cooperation with BMW, and what do they do? Open a new site, hire new people, instead of using that chance to pull people out of the dying modem business. No manager at Intel can explain why Intel is still producing modems. You get some bizarre presentations about how the modem is a part of Intel's connected world of the future, but they don't explain why that modem can't come from some cheap chinese supplier. Intel missed a lot of chances to use the talent in iCDG and move it to other areas. So Intel continues to burn money with a business that simply CANNOT be profitable for Intel. Ever.
So that's basically the story where the money has gone and who you can blame for that. Basically every single one of these decisions would have been objected to by the German part of iCDG, so don't blame the Germans for burning that money.
This was posted by @P0f9GYa-1cwv. An amazing analysis that deserved its own thread.