by Anton Shilov
09/25/2012 | 10:55 PM
Without any doubts, Intel Inside branding campaign helped Intel Corp. to become one of the most valuable brands on the planet and to some degree avoid commoditization. Nowadays Intel is trying to bring the "Intel Inside" logotype to the market of smartphones and propose it as a major factor for differentiation for handsets. But will it help the chip giant to become a strong competitor for Qualcomm and other designers of chips for mobile phones?
"Without a doubt, my goal would be to have consumers walk into stores and have Intel Inside as a key driver of which phone or tablet they choose, just like we've done in the PC space," said Brian Fravel, Intel's head of branding, in an interview with Reuters news-agency.
Intel first unveiled "Intel Inside" logotype in 1991 in a bid to differentiate user experience and performance provided by personal computers powered by Intel microprocessors from systems based on AMD, Cyrix or IBM chips. As customers got more aware of Intel processors and their advantages, Intel started to make broader product lines and offer chips with premium performance, which helped to boost price of a small chip to $1000 or more, boosting the company's average selling prices (ASPs).
Over the years, the "Intel Inside" and other extensive marketing campaigns have paid off: at present Intel only has one serious competitor, Advanced Micro Devices, the rest have either quit the market of x86 chips or simply went bankrupt. In short, Intel brand-name started to be a symbol of PC high performance and reliability. Theoretically, this could work on the market of smartphones or tablets.
What should be clearly understood is that central processing units (CPUs) that cost a lot of money not only carry Intel brand-name and a model number, but also provide clear advantages over competing solutions and other Intel products. When it comes to desktop PCs, computer makers openly name the chip inside the system to characterize performance, but smartphone vendors almost never reveal specifics about system-on-chips they use, but only advertise particular models (at the end of the day, SoCs cannot be changed easily, unlike CPUs inside desktops or notebooks). Therefore, it is highly unlikely that Intel will be able to communicate the value of a particular chip on the market of ultra-portable consumer electronics, something that will lock ASPs on the certain levels.
"Can you generate end-user demand for your processors? That is what they are all looking at, and that is not an easy thing to do in the mobile space where people are not accustomed to it," said Jack Gold, a tech industry analyst at J. Gold Associates.
Intel is not the only company, who is trying to add branding onto smartphones. Nvidia Corp. and Qualcomm Corp. want to do the same with Tegra and Snapdragon. One thing that actual phone makers have to remember is that addition of any third-party branding is increasing the importance of silicon and reducing importance of their brands, something that has already affected manufacturers of PCs.