Intel did not throw it away. They sold the business unit to Marvell for $600 million.
I was working for a different CPU company at the time but the thought was by doing this it would allow Intel to focus on the sales and marketing of the Atom and push x86 everywhere rather than have a mixed x86 / ARM marketing message.
On June 27, 2006, the sale of Intel's XScale PXA mobile processor assets was announced. Intel agreed to sell the XScale PXA business to Marvell Technology Group for an estimated $600 million in cash and the assumption of unspecified liabilities. The move was intended to permit Intel to focus its resources on its core x86 and server businesses.
I was working for a different CPU company at the time but the thought was by doing this it would allow Intel to focus on the sales and marketing of the Atom and push x86 everywhere rather than have a mixed x86 / ARM marketing message.
https://en.wikipedia.org/wiki/XScale
On June 27, 2006, the sale of Intel's XScale PXA mobile processor assets was announced. Intel agreed to sell the XScale PXA business to Marvell Technology Group for an estimated $600 million in cash and the assumption of unspecified liabilities. The move was intended to permit Intel to focus its resources on its core x86 and server businesses.