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Intel Readies Centrino-Style Push for Desktops
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PostPost subject: Intel Readies Centrino-Style Push for Desktops
Posted: Sat Nov 13, 2004 5:22 pm
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SAN FRANCISCO (Reuters) - Intel Corp. will unveil next year a bundle of chips designed for home entertainment computers, and support the move with a branding campaign modeled on the successful launch of its Centrino chips for notebook computers, a person briefed on the matter said.

The initiative, codenamed East Fork, is part of a push to develop "platform" brands -- heavily promoted names that designate bundles of chips for particular applications, like entertainment, mobility, or business computing. Such brands boost sales of Intel's high-margin microprocessors, chip industry analysts say.

East Fork will include a newly designed Intel microprocessor with two processing cores, a supporting chip set, and a Wi-Fi wireless radio. The package will be designed for "digital home" PCs, which shuttle music and movies around the home and can store TV shows digitally, the person said.

The East Fork initiative was first reported by Digitimes, a Taiwan-based news Web site, which cited makers of computer motherboards. Intel spokesman Bill Calder said the company does not comment on rumor or speculation.

Backed by hundreds of millions of dollars in marketing muscle, Intel made Centrino virtually synonymous with long battery life and wireless connectivity in under two years. Intel earns a premium for Centrino, which includes three separate chips, and has also taken a commanding share of the market for Wi-Fi chips used to connect PCs to the Internet.

Now, the world's largest chip maker is ready to do for desktop computers what Centrino has done for notebooks. Encompassing graphics, sound, security and other features, new platform brands could put a squeeze on stand-alone chip suppliers like graphics chip maker Nvidia Corp. or Wi-Fi chip maker Atheros Communications Inc.

Intel's platform branding moves could boost the chip maker's share of the dollars spent on PC components, while giving Intel leverage to set the direction for the overall PC industry, analysts say.

"It's an easier way to communicate a group of functions to essentially a non-technical audience," said Nathan Brookwood, an analyst with Insight64, an independent technology research company.

'A BETTER WAY TO MARKET'

The expanded branding strategy was first signaled in September by Intel President Paul Otellini, who described the "platformization" of Intel and said platforms were "a better way to think about products. It's a better way to market our products."

With an expanding product line, Intel is finding that its customers much prefer the simplicity of an overarching brand, like Centrino, over model numbers or processor speeds that currently differentiate Intel chips, said Richard Doherty, the director of Envisioneering.

"Centrino, in hindsight, seems to be a very successful branding exercise. Something similar to that is desired in the next round of branding, from both desktop and mobile," Doherty said. Beyond a digital home PC brand, new brands could emerge for bundles of chips used in pocket-sized PCs, he said.

For business PCs, Intel's branding strategy may be hamstrung by the delayed release of the next-generation Microsoft Corp. operating system, codenamed Longhorn, said Kevin Krewell, editor in chief of Microprocessor Report.

Features that Intel's chips can offer for business users -- including improved PC security and virtualization -- need to work hand in hand with software, he said.

"I think for now there's nothing much significantly they can bundle in a business desktop that's going to differentiate itself on a platform basis at this point," Krewell said.

The renewed emphasis on branding shows the growing importance of marketing for a company with deep roots in engineering culture. It will fall to Otellini, whose educational background is in economics and business, not engineering, to expand Intel's already well-known brands, when he takes over next year from Chief Executive Craig Barrett.

"Barrett got them manufacturing perfection," said Gartner Inc. analyst Martin Reynolds. "It's going to be up to Otellini how to get the revenue growth in the various business units."

? Reuters 2004. All Rights Reserved.
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