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Thumbs-up for Intel’s multi-brand future

Intel’s new ‘Leap ahead’ brand umbrella gives it room to grow. By Ted Schadler with Chris Charron

For Intel, the challenge is simple: how can the chipmaker get more Intel silicon into every digital device? The answer is to create bundled chip ‘platforms’ and communicate each platform’s potential to transform devices into digital experiences. To aid in this strategy, Intel CMO Eric Kim has elevated Intel’s brand promise so that each platform can carve out its own niche under the Intel ‘Leap ahead’ umbrella. The hard part remains: convincing manufacturers to use Intel’s platforms in their devices.

Intel’s brand gets a facelift

Forrester met recently with Kevin Sellers, the Director of corporate brand management for Intel, to get the details behind the company’s recent brand strategy shift. The company is moving beyond Intel Inside to create an umbrella brand that is on par with that of GE or Virgin—a brand that projects its ‘Leap ahead’ promise into many products but also carries new risks. With this brand strategy shift, Intel is:

• Elevating the brand promise beyond chips.

Now that digital processors and controllers drive every company’s productivity and every consumer’s entertainment and communications experiences, Intel’s platforms must promise more than just a quality chip inside. Consumers buy digital products but then fail to get the additional products, content or services that bring them to life. As a result of this failure, consumer technology companies leave $3.8 billion in lost revenue on the table today. To close this gap, digital industries must stop selling standalone devices and services, and start delivering digital experiences—products and services integrated end-to-end under the control of a single application. The most promising approach is ‘solution boutiques’ like those of Apple, Best Buy’s Magnolia, and mobile retail newcomer IMO. Successful efforts like these will generate $13 billion in 2010.

The new brand strategy gives Intel the ability to accomplish this with its clear aspirations. To go along with that promise, Intel’s platforms and platform brands must deliver more than gigahertz and megaflops—they must also deliver ease-of-use, interoperability, and low power consumption. Intel Viiv and the forthcoming enterprise brand will struggle to replicate the success of Centrino, but at least the path ahead is now clearly defined. Intel’s Viiv platform is the chip giant’s strategy to use silicon to step up inter-operability and copy protection standards in the digital home, and sell more Intel chips in the process. This strategy worked well with Centrino: the resulting adoption of Wi-Fi chipsets in laptops and the build-out of hotspots is testament to that. Intel will certainly be successful in selling Viiv to Media Center PCs. But to take Viiv and digital home inter- operability into consumer electronics (CE) devices, Intel must extend Viiv to include CE components like the XScale processor, and it must be as inclusive as possible in its co-marketing to ensure that the industry embraces Viiv.

The risk of this strategy: Intel may not be able to make every chip in a bundle best-of-breed, and manufacturers who want only chips might look for alternative chip suppliers like Advanced Micro Devices (AMD) and NVIDIA.

• Giving its portfolio businesses their own identity.

Intel gained dominance by selling desktop PC processors. But its business now includes chips for laptops, tablet PCs, phones, portable media players, set-top boxes and televisions. The company’s recent re-organisation into businesses aligned around markets clearly indicates that it has now matured into a portfolio of businesses. The brand strategy supports the portfolio of businesses because each business can brand its product platform separately—for example, Centrino for mobility and Viiv for entertainment—but all are under the Intel umbrella.

The risk of this strategy: Manufacturers looking for differentiation might assemble their own platforms rather than adopt Intel’s Viiv or Centrino.

• Signalling to manufacturers that it will help them promote their products.

Intel has always used its market dollars to promote its customer products. What’s different now is that the promise can easily encompass other manufacturers’ goals. After all, which TV-, phone-, or PC maker doesn’t want to leap ahead? The bottom-line is that manufacturers should take Intel’s co-marketing dollars and use them to reach bloggers, social networks, and other online influencers who are now driving consumer device preferences.

Between August 2004 and July 2005, social computing tools such as blogs and Really Simple Syndication (RSS) grew dramatically across the board. Consumers regularly use blogs twice as much as they did last year, with 10 percent now reading them at least once a week. RSS feeds are more popular today than blogs were in 2004. Web sites and media feeds are gaining more attention, especially among youth, and marketers should take notice.

The risk of this strategy: Manufacturers looking to promote their own brands might be reluctant to accept Intel’s co-marketing dollars. To overcome this reluctance and have a better shot at growing the markets, Intel must be extremely flexible in determining which of its brand elements its customers’ advertising projects require.

For more information, contact Sudin Apte, Forrester India Country Manager, at sapte@forrester.com, or phone 020 2567 4390/91