Intel Outside Its Comfort Zone?

from the things-change dept

When I worked at Intel (nearly a decade ago already — yikes) I always found it amusing how many people I met were either credited with or directly took credit for coming up with the whole “Intel Inside” campaign. It was a tremendously successful branding campaign — taking a boring component that most consumers would never care about and making it a key selling point for consumers. However, times change, and Intel is changing. Most articles are simply covering the logo change and the phasing out of “Intel Inside”, but Business Week has a very detailed article pointing out the massive changes the company is going through. The article opens with everyone being surprised that the soul of Intel, former CEO, Andy Grove approves of the company direction — but Grove is familiar with the need to bet the company to deal with market changes, such as his decision to have the company abandon memory and jump into microprocessors.

Still, these aren’t called “bet the company” moves for nothing, and there’s certainly no guarantee that Intel’s new strategy will work. The company has been good at hyping up certain areas, and even rewriting history to make itself seem more important to new trends. However, while the article paints the company’s success over the last two decades as being “engineering driven” that’s not necessarily true. It’s been a combination of aggressive marketing and excellent operations that have often helped the company produce chips much more efficiently than the competition — even if those competitors (hello, AMD) made what many consider to be better chips. This has helped Intel to make more money, if not necessarily better products. And, the new strategy doesn’t really sound all that different — just expanding the efforts to put Intel chips into a lot of other products. Of course, Intel is quickly discovering that the competition is a lot more difficult, as other established players are pretty entrenched. Also, Intel has notoriously had problems whenever they tried to push “complementary” products to help push their chips — so the other products the article discusses may not be destined to get very far if history is an indicator.

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Comments on “Intel Outside Its Comfort Zone?”

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Anonymous Coward says:

Luck and Marketing

You made some good points: Intel’s strength has been marketing, plus a little luck – not technology. Getting picked by IBM to be their PC processo – and then Compaq starting IBM clones and an entirely new industry – gave them a monopoly on PC processors which is pretty much still in effect today.

And you mention AMD’s superior products. Keep in mind that more than a decade earlier Mot’s 68K line of processors were also considered superior to Intel’s. But superior technology doesn’t always win the market (VHS vs. Beta), so chalk one up to Intel Sales and Marketing on beating out their competition with an inferior product.

Mike (profile) says:

Re: Luck and Marketing

The idea that beta was considered better than VHS is something of a myth. The quality of the video may have been better, but customers greatly preferred VHS because of the amount it could hold. It all depends on how you define quality. You can see more about that here.

And, I don’t think it was just Intel’s marketing that helped, but again, they did work hard to provide a more “complete” solution than AMD. And it is worth noting that their operational efficiencies contributed to their success. Their higher yield rates made it much easier for them to profit (especially as competitors had to undercut their prices when it was more costly for them to make chips).

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