Intel Reportedly Cutting ‘Intel Inside’ Spending, Could Drive Higher PC Prices [Updated]

Intel-Feature

Update: Our sources have indicated that the 40-60% number quoted by CRN is inaccurate. While Intel is reorganizing its co-marketing program, the total spending reduction will be much smaller than the figures we initially reported.

If you’re reading this website, you’re virtually guaranteed to have heard it. D? D? G? D? A?, otherwise known as the “Intel Inside” jingle, has been a staple of computer marketing for years. In an era when jingles are no longer popular and have been vanishing for decades, it’s still immediately recognizable to anyone who has ever watched a desktop, laptop, or ultrabook commercial. Intel initially experimented with “Intel: The Computer Inside,” but by 1990, at the latest, the familiar jingle was popping up in TV commercials. Now, it looks like the Intel Inside program is being curtailed.

(Watch the volume on this, some ads are much louder than others, and I only recommend the early ads. Prolonged exposure to the same five notes may lead to bleeding of the ears.)

We’ve talked before about various programs Intel has had, including the rebate program AMD argued made it impossible for it to compete with Intel in the early-to-mid 2000s. Intel Inside, however, is a different beast. Intel Inside was a marketing program that matched a certain percentage of a company’s marketing spending. How much matching depended on the product and the specifics of the program itself. For example, back when Intel launched Centrino, it offered extremely good matching rates of $5-$10 for every dollar the OEM spent. The typical matching rate, however, was below this point.

A report from CRN states that Intel is cutting this spending by 40-60 percent, which frankly makes sense given the overall state of the computing market. It would be a mistake to claim Intel’s CCG (client computing group) isn’t important to the company — CCG remains a huge revenue driver for Intel, and that’s not going to change any time soon. But 18 months ago, Intel CEO Brian Krzanich laid out what he believed were the pillars of the company’s future growth: the cloud, the Internet of Things, memory, and FPGAs. Not listed? Personal computing.

You could argue what Krzanich is doing now is what Intel should have done in mobile. Our two-part discussion of why Atom failed in the mobile market highlighted how Intel never completely committed to the manufacturing changes it needed to make to hit affordable prices with its Atom products. Instead, it limped along for several years and spent billions of dollars before ultimately throwing in the towel.

Unfortunately, consumers aren’t likely to see many benefits of this shift. With marketing dollars flowing away from OEMs, there are really only two options: They can pay for such costs themselves, and raise PC prices to cover them, or they can simply do less marketing. There doesn’t seem to be much chance of another outcome; AMD certainly doesn’t have the resources to take over Intel’s marketing clout.

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