Intel’s Centrino

Ravi Madapati
Faculty Member
Icfai Knowledge Center

continued : Launching Centrino

Interest in these products had started to accelerate only with the advent of Wi-Fi in the past 18 months. Corporate buyers cared less about frequency and more about the cost of ownership and longevity. Another target segment was second-time notebook users and savvy buyers. Intel believed that Centrino would become its predominant notebook product by the end of the 2003 and would be found in all types of notebooks and tablet PCs except the budget laptop machines.

The notebooks came in two versions. Some notebooks would affix the Intel’s Centrino badge, which implied the notebook used Intel’s entire family of new chips including the Pentium M, a supporting 855 chipset and the Intel Pro Wireless network connection via a mini PCI 802.11b radio module. Other notebooks would only have a Pentium M badge. The difference between the machines lay in the wireless networking modules they contained. In some cases, PC makers used all three components—the Pentium M, the chipset and the Intel Pro Wireless module. In other cases, manufacturers integrated the Pentium M chip and chipset but used a wireless module from another manufacturer.

Intel had laid down clear guidelines for manufacturers. Those that did not use all three chips could not brand their machine as a Centrino. Even if their machines used the Pentium M and 855 chipset, Intel did not allow manufacturers to use the Centrino label unless they also used the Intel wireless module. The guidelines created a marketing dilemma for many manufacturers who wanted to give customers a choice between Intel’s module and an alternative. But if they did not opt to use Intel’s module, they could also lose out on some of the co-marketing funds that Intel had earmarked for the Centrino campaign.
 
Intel maintained that while it offered co-marketing funds to PC makers to help fund advertising, companies were free to choose where to use those funds and did not offer more money to a PC maker using Centrino than for one just using Pentium M. Leading computer makers seemed interested in keeping their option open. Jim McDonnell, vice-president of marketing in the personal systems group at HP said [1],

“We will have Centrino products, and we will have other notebooks that will not be Centrino”.

HP’s goal was to let customers decide what they want, he said. People close to Dell felt that the company intended to focus its marketing on the Pentium M and its attributes, which included longer battery life than the Pentium III M or Pentium IV M chip. Dell planned to give customers the choice of whether to use Intel’s module or one of its own Dell True Mobile 802.11b modules—thus forfeiting its ability to use Centrino as an overall brand. Toshiba, which already had its own dual 802.11a and 802.11b module, would also give customers a choice of Intel’s or other wireless modules. IBM planned to sell Centrino branded notebooks. However, the company offered an upgrade to include 802.11a. That upgrade could not be labeled a Centrino.

The road ahead

“For a long time, road warriors and other mobile professionals have sought to liberate themselves from their dependence on connections in order to be more productive and have a truly mobile office that allows them to compute anywhere… The arrival this year of Intel’s Centrino mobile technology with integrated wireless will enable a new level of computing utility that will help realize this dream of mobility.”

- IDC [2]

Analysts were divided about the fate of Centrino. Some felt PC makers would want to work with the communications specialists. Others said that a Wi-Fi chip was just a fancy modem, and the only thing that would be important to customers after a while was price. Transmeta, meanwhile, was gearing up for Astro; a new energy-efficient chip, whose launch was slated for the second half of 2003, while AMD would come out with new notebook chips in May and in September 2003. Barrett was concerned whether the current economic downturn would affect the prospects for Intel’s new technology. Competitors were also gearing up to launch their own lesser-priced alternatives to Centrino. Besides, the guidelines issued by Intel on the use of the Centrino brand name had created much discontent amongst potential buyers. Amidst such developments what would be the prospects for Centrino?

References

1. “Intel in slide”, The Economist, June 15, 2002.
2. “Modifying Moore’s law”, The Economist, May 10, 2003.
3. Kirkpatrick, David, “See This Chip?” Fortune, February 3, 2003.
4. Kharif, Olga, “Intel Is Seeking Safety in Diversity”, BusinessWeek, July 8, 2002.
5. Yacono, John, “Intel’s Fixes Fall Short for Solution Providers”, Computer Reseller News,
May 19, 2003.
6. Vaas, Lisa, “Database lets systems scale”, eWeek, May 5, 2003.
7. “HP Charts Charts Enterprise Course”, InfoWorld, May 5, 2003.
8. “Embedded Systems”, Canadian Electronics, May 2003.
9. “Desktop platform supports Intel processor-based workstation”, Computer Workstations, May 2003.
10. Centrino market information from CNET, www. News.com January to July 2003.

[1] Intel in a mobile marketing muddle? News.com.com, February 27, 2003.

[2] IDC, “Untethered Computing: Feasible, Economic, and Desirable,” January 2003.

© Icfai Press. Global CEO • October 2003, All Rights Reserved.