Intel Corp. is considering extending its branding efforts 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 on what effects consumers might see from such a move.
Until the Centrino campaign, Intel's marketing over the last 12 years had centered around the "Intel Inside" phrase and accompanying logo. The campaign is credited by Intel as turning the processor from an anonymous piece of silicon into something that most PC owners can quickly identify by brand and often product family and clock speed, and anecdotal evidence supports the claim.
But while "Intel Inside" has made both the company and its processors household names in many developed nations, the more than US$7 billion that the company has spent on the campaign since its launch has done little to improve the image of the company's other products such as chipsets, networking components and flash memory.
Centrino is the first major campaign from Intel to change that. The name refers to the combination of Intel-built processor, chipset and wireless networking module, and PC manufacturers can only use the Centrino name and logo and benefit from Intel's current promotional campaign 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 chipset 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, speaking to IDG News Service in Tokyo recently. "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."
Centrino is a great example of Intel doing just that and looking beyond its traditional processor branding, said Dean McCarron of Cave Creek, Arizona-based Mercury Research Inc.
"It fits in with part of Intel's broader goal," said McCarron. "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 chipsets."
The new approach could bring both benefits and drawbacks to consumers, said the analyst.
A benefit could come from improved performance when several Intel products work together. As an example he cited the company's 875P Canterwood chipset that was launched earlier in April. The chipset has a special interface channel for connecting directly with Intel communications chips and the result, he said, 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."
One of the downsides to a wider branding effort by Intel could be less competition.
"It becomes more difficult to compete if you are a Via (Technologies Inc.) or SiS (Silicon Integrated Systems Inc.) trying to sell chipsets against Intel. They (Intel) have a leg-up on some of the technology and a tremendous amount of advertising and market development," said McCarron who added that Intel campaigns, such as the ones for Centrino or the Pentium processor, can be worth the equivalent of tens of dollars of free advertising to PC makers for each system they sell.
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, director of marketing at Via in Taipei. "If you look at Centrino, it mirrors what we have been doing with our Eden platform," he said referring to Via's Eden platform that includes a processor, chipset and motherboard.
Both Via's Brown and Ellie Lin, a spokeswoman for SiS in Taipei, noted their companies maintain a price advantage over Intel.
"I think the Centrino price is very, very high," said Lin. She said that SiS chipsets are competitive to Intel's own chipsets in terms of price and that's a critical issue for its OEM (original equipment manufacturer) customers so the company remains confident of going up against Intel.
"For many years the (chipset makers) have enjoyed a very good relationship with Intel and been able to compete aggressively by offering the right value proposition," said Brown.