SAN FRANCISCO (CNN/Money) -
Readers of the current issue of the New Yorker magazine received an unexpected gift from Intel: a special Zagat restaurant and hotel guide highlighting Wi-Fi hotspots in major U.S. cities.
It was a pretty nifty pitch for Intel (INTC: Research, Estimates) and Centrino, the company's Wi-Fi-optimized chipset package that debuted in March. But the Zagat gift was more than a one-off campaign. It marks the unofficial launch of phase two of Intel's $200 million marketing push for Centrino, set to officially commence next week.
I wrote about Centrino's initial marketing push in March, and noted that it was the first time the company had built an ad campaign not around innovation or product enhancement (or little blue men), but around applications that its new product made possible.
In other words, it was about needs -- not speeds and feeds. Six months later, the company is renewing the marketing efforts behind Centrino. It's a good time to check in on the product and see how effective the company's message has been so far.
How are they doing?
From a product perspective, Centrino has done fairly well. When Intel announced Centrino's debut six months ago, 34 products met the requirements for official Centrino certification (they featured each of the three components Intel ships as Centrino -- the Pentium M processor, the 855 chipset, and the Pro/Wireless 2100 network connection).
Now, PC manufacturers ship 92 different Centrino models, and Intel expects to have more than 100 by year-end, according to Daniel Francisco, an Intel spokesman.
Intel's share of the mobile-computing market is healthy too -- cruising along at 88 percent, according to IDC. Centrino products haven't flown off the shelves, but hardly any product is selling briskly these days.
"Given where the market is, Centrino has done well," says Rob Enderle, principal analyst with the Enderle Group. "It's not performing the way it would have a couple of years ago, but the market has changed."
From a marketing standpoint, the campaign's success thus far is not so easily measured. Intel's first Centrino campaign missed the consumer perspective, which is a pretty glaring omission.
With a lot of the Wi-Fi buzz centering on new ways for the public -- not private enterprise -- to interface with and use computers, Intel's initial focus on productivity enhancements seemed a little off-base.
"We've done a lot with creating awareness for Wi-Fi," Francisco says. "That work is not done." This next wave will focus pretty heavily on personal Wi-Fi usage, hence the restaurant guide.
A couple of issues ahead
Of course, as the dominant player in the mobile-computing space, Intel enjoys a unique position. It sees gains any time the sector grows. But two potential issues now confront Intel and its wireless mobile plans, and perhaps explain why the company is making its second major push right now, just six months after the launch.
Recently in Tech Biz
|
|
|
|
First, Intel competitor AMD (AMD: Research, Estimates) just unveiled its first 64-bit processor, the Athlon 64. Intel doesn't currently offer a 64-bit processor, so expect AMD to make an aggressive marketing push to call attention to its performance advantage over Intel. Since the Athlon 64 is a brand-new product, Intel has a window of opportunity before AMD can make serious grabs at Intel's market share.
"I see Intel sustaining its momentum on mobile processors through the end of the year," says Shane Rao, an analyst at IDC. "Even if AMD mobile is wildly successful, it'll take a while to ramp up."
AMD's entry exacerbates the second issue Intel faces: PC manufacturers' desire to retain product differentiation. Since Intel's Centrino product is a soup-to-nuts offering, encapsulating all the hardware needed to go wireless, manufacturers that offer Centrino are all essentially offering the same wireless product.
"There's a market incentive to differentiate," Rao says. "If everyone has Centrino, that means there's not a lot of differentiation. It behooves manufacturers to support products that aren't entirely Centrino."
Dell, for one, has realized this, and allows customers to break the Centrino mold and swap out the Intel radio component for a more powerful Broadcom model. Intel combats this manufacturer need for differentiation by offering marketing subsidies to companies that go with Centrino.
This second campaign is a crucial one for Intel. Wi-Fi is the buzz du jour, and for Intel to succeed, it will need to hammer home the message that Centrino is the best way for both consumers and businesses to unwire.
The company is under pressure from competitors and manufacturers, and must hit the hotspots of consumer desire if it is to port its desktop-based dominance into the new, untethered arena.
Sign up to receive the Tech Biz column by e-mail.
Plus, see more tech commentary and get the latest tech news.
|