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7/21/2006
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Intel Makes Branding Gamble With 'Leap Ahead' And Core 2 Duo

The next year will determine if Intel's processor portfolio overhaul of the past few weeks will successfully put the brakes on rival Advanced Micro Devices' market share assault of the past two years. But AMD executives believe Intel has again made a big error in giving up positions of strength by abandoning two of the most well-known brands in the technology industry: Intel Inside and Pentium.

The next year will determine if Intel's processor portfolio overhaul of the past few weeks will successfully put the brakes on rival Advanced Micro Devices' market share assault of the past two years. But AMD executives believe Intel has again made a big error in giving up positions of strength by abandoning two of the most well-known brands in the technology industry: Intel Inside and Pentium.Intel "left an opening big enough to drive a truck through" in 2003 when it bet that the future of 64-bit processing would be in its Itanium processor, according to AMD. Intel understood that mainstream computers would be making the transition from 32-bit operations to 64-bit, but believed that revolution would be best addressed with a new processor architecture in Itanium that was incompatible with the x86 instruction set.

AMD stepped in with its AMD64 architecture, which extended x86 processors to 64-bits. Both its 64-bit Opteron and Athlon processors quickly found attention among both equipment makers and end users who weren't interested in abandoning years of legacy software. That "opening" by Intel has allowed AMD to grow its overall share of the processor market to more than 22%, and AMD believes it can garner as much as a third of the market over the next two years.

Hector Ruiz, chairman and chief executive of AMD, and other executives at the company say they've never really understood why Intel chose to "give up" on the x86 market. The x86 Intel architecture allowed the company to grow into the biggest semiconductor maker in the world. Intel has since seen the error of its way and has also extended its x86 processor portfolio to 64-bits. But that miscue, along with AMD's ability to get to market first with dual-core x86 processors for the server market (while also providing a clear performance-per-watt advantage over Intel), has put AMD in the strongest position in its corporate history.

Intel's introductions of new processor platforms for all its volume markets based on its new Core architecture appears to be going a long way to addressing the technological leadership position that AMD gained in 2005 and may even put Intel back in the lead in most performance metrics. But AMD executives say they're readying new versions of their processors that will keep the company's offerings at the top in performance.

And AMD believes Intel is again making a risky bet in changing its market message. Late last year Intel replaced its well-known "Intel Inside" slogan with "Leap Ahead" as its primary branding strategy. With the introduction next week of its Core 2 Duo processors for the desktop and laptop markets, Intel's long-established Pentium brand is being relegated to the background and eventually the processor wastebasket.

"Intel Inside" always seemed presumptuous. Often it appeared that Intel believed its name was more important than the name of the equipment vendor that used its processors. Did people purchase a computer based on the Dell brand or the Intel brand? But "Intel Inside" was a brand known worldwide, and "Leap Ahead" hasn't seemed to demonstrate a similar ability to capture mindshare. Intel hasn't totally dropped the "Inside" branding, and mostly recently it was used in new Core 2 Duo product introductions.

Pentium will remain part of Intel's portfolio for the time being, but Core 2 Duo is now the flagship for PCs. Intel could have tinkered with the Pentium brand for its new processor--maybe the Pentium Core Duo. Intel has been down this road before when it transitioned from its old numbering nomenclature of 286, 386, and 486 to Pentium. At the time, I though Pentium sounded more like a name for a golf ball than a microprocessor, particularly when it morphed into Pentium Pro.

But Pentium became a well-established and trusted brand name known worldwide. Now Intel will "Leap Ahead" with Core 2 Duo. The next year will determine if the branding changes turn out to be more marketing blunders that will leave new openings for AMD.

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