Intel Betting New Business Brand Will Spark Market Share Gains

Intel is banking on a new business platform brand, which will be unveiled next week, that the company believes will lead to market share gains against rival AMD.

April 20, 2006

4 Min Read
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Intel is betting a new business platform brand slated to be unveiled next week is going to spark market share gains against rival AMD.

Channel sources said they are hoping the new brand will have the same impact on the desktop and server business as Centrino had in the mobile market.

Intel CEO Paul Otellini Wednesday referred to the "new platform brand for business" in a conference call with Wall Street analysts. Sources said Otellini is scheduled to unveil the brand at a press conference on Monday at the Ritz Carlton in San Francisco.

The new Intel business platform comes with the chip giant warning Wall Street analysts that it expects PC growth for the year to drop from an anticipated 10 percent to 12 percent range to 7 percent to 9 percent.

Intel system builders have been clamoring for a desktop brand similar to the multimillion dollar Centrino assault for some time. In fact, they have privately referred to Intel's impending plans in the business desktop arena as "Desktrino."One source close to the company said he expects Intel to use the Core moniker in reference to the company's Core architecture. The new brand will be backed up, the source said, by a massive marketing blitz.

"What Intel is trying to do is bring the Centrino magic to the business desktop and server market," said the source. "Customers don't ask for a laptop. They ask for a Centrino laptop. This new platform will have new functionality that makes the platform faster, easier to integrate, more efficient power-wise." The source expects Intel to even offer virtualization functionality that would allow servers to run multiple operating systems including Linux.

Otellini, for his part, said he is confident Intel can take back market share against rival AMD in the second half of the year with new products and the new brand.

Noting the steepest market share losses against AMD came in the server segment, Otellini said Intel has a robust product line coming out with the Woodcrest server processor. "That one I would expect to start turning the corner on in terms of market segment share probably rapidly after launch," he said.

What's more, Otellini said, the new Conroe product is the "most significant performance gain" that Intel has brought to the desktop market since the company introduced the Pentium to replace the 486. Besides higher performance, Conroe also provides lower power consumption. Otellini said he expects to see "immediate uptick" in share with Conroe in both the enterprise business desktop and in the workstation/gamer community looking for high performance.Both Woodcrest and Conroe will ship in volume in the third quarter, said Otellini. Those product are Intel’s first Core Microarchitecture products. Intel has said the new desktop and server will include its hardware-assisted virtualization technology and Advanced Management Technology, which will be the basis of a channel initiative for VARs and system builders that want to offer managed services to SMBs.

Glen Coffield, president of Cheap Guys Computers, an Orlando, Fla., system builder with six retail locations in the area, said he finds it hard to get excited about Conroe because of the pounding system builders are taking in the market in the wake of rock bottom prices from competitors such as Dell and what he called a tough economy. "I think this is going to be the toughest year we have ever seen in the PC business," he said. "It's all about the economy. People's disposable incomes are being hit by higher gas prices and higher food prices. Everything is going up, even mortgage rates."

As for Conroe, Coffield said he can't get excited about a product that is several months away. "We are trying to get by next week and the next month," he said. "You are asking me to get excited about what I am going to get for Christmas. You are putting a Christmas present in front of me I can't open for a couple of months."

Otellini said the moderating PC growth rates have led to slower chip-level inventory reductions among customers. Furthermore, he said, the pricing actions Intel has taken have been most aggressive in the bottom of the desktop market. That has resulted in what he called "a bit of a glut in the channel, not among our distributors, but in the gray market and among sub-distributors and brokers." He said that has led to discounts on "most processors, all brands and flavors, in the channel right now."

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