Chip Maker Moves Beyond 'Intel Inside'

Intel may extend its brand beyond processors to encompass other areas of technology, after the initial success of its Centrino marketing campaign, a senior company executive has said. But the jury is still out regarding the effect of such a move on consumers.

Until the Centrino campaign, Intel's marketing for 12 years had centered around the "Intel Inside" phrase and accompanying logo. Intel credits the campaign as turning the processor from an anonymous piece of silicon into something that most PC owners can quickly identify by brand and often by product family and clock speed, and anecdotal evidence supports the claim.

"Intel Inside" has made both the company and its processors household names in many developed nations. But the more than $7 billion the company has spent on the campaign has done little to improve the image of its other products, such as chip sets, networking components, and flash memory.

Centrino is Intel's first major campaign aimed at changing that. The name refers to the combination of Intel-built processor, chip set, and wireless networking module. PC manufacturers can use the Centrino name and logo and benefit from Intel's current promotional campaign only if they use all three components. Choose, say, a networking adapter from another competitor, and a PC maker can shout from the rooftops about the Pentium M processor and Intel chip set combination but cannot call it Centrino.

"Centrino was a very positive experience for Intel," said William Siu, vice president and general manager of the company's desktop platforms group. "Worldwide acceptance has been very gratifying. We are definitely looking at other opportunities in other spaces to provide integrated value. As we look at the convergence of electronics, we have to look beyond processors."

Customer Benefit?

Centrino is a great example of Intel doing just that and looking beyond its traditional processor branding, said Dean McCarron of Mercury Research.

"It fits in with part of Intel's broader goal," McCarron said. "With pressure facing processors and processor pricing, one of the ways they can maintain growth is to grow their share of other silicon inside the PC. Part of the motivation is a renewed interest in chip sets."

The new approach could bring both benefits and drawbacks to consumers, said the analyst.

Users could benefit from improved performance when several Intel products work together. McCarron cited the company's 875P Canterwood chip set, launched earlier in April. The chip set has a special interface channel to connect directly with Intel communications chips. The result is that "a gigabit Ethernet connection will likely run faster (using the Intel combination) than from another vendor's product on the mundane PCI bus," McCarron said.

On the other hand, a wider branding effort by Intel could mean less competition.

"It becomes more difficult to compete if you are a Via or SiS (Silicon Integrated Systems) trying to sell chip sets against Intel," McCarron said. Intel has some advantage with the technology "and a tremendous amount of advertising and market development." He noted that, to PC makers, Intel's campaigns, such as those for Centrino or the Pentium, are worth the equivalent of tens of dollars of free advertising for each system sold.

Still Competitive

However, both Via and SiS, two of Taiwan's largest chip makers, say they have few worries.

"I don't think it has a huge negative impact," said Richard Brown, Via director of marketing. "If you look at Centrino, it mirrors what we have been doing with our Eden platform," he said; Via's Eden includes a processor, chip set, and motherboard.

Both Via's Brown and Ellie Lin, a SiS spokesperson, noted that their companies maintain a price advantage over Intel.

"I think the Centrino price is very, very high," Lin said. She said SiS chip sets are competitive with Intel's own chip sets in terms of price--a critical issue for Sis's PC vendor customers--so the company remains confident in going up against Intel.

"For many years the (chip set makers) have enjoyed a very good relationship with Intel and been able to compete aggressively by offering the right value proposition," Brown said.