Case No. 1
INTEL: BUILDING A TECHNOLOGY BRAND
Intel’s corporate branding strategy, which many credit for the company’s unparalleled success in the microprocessor industry during the 1990s, stemmed from a court decision. On March 1, 1991, District Judge William Ingram ruled that the “386” designation used by Intel for its microprocessor family was a generic description and could not be trademarked. Intel had been confident that the judge would rule in its favor, and the unexpected court decision effectively invalidated Intel’s current branding strategy. This decision allowed competitors to use Intel’s established naming scheme, which would have been disastrous.
Intel’s response was to develop a trademark name for its processor family, the now-familiar “Pentium,” and launch a corporate branding campaign designed to make Intel the first name in processors. Both moves proved to be enormously successful. Intel became one of the leading companies in the PC boom, enjoying virtually unchallenged market leadership through the 1990s. Problems arose, however, as the PC industry slowed down in the early 2000s. Intel faced a future where the PC which represented the core of the company’s microprocessor business, was no longer the essential tool for the Information Age. Wireless telecommunications devices were becoming increasingly popular, and they required different types of processors.
The company had spent over three decades building the most recognizable brand in the PC microprocessor industry. Intel’s challenge in the new century was to extend into innovative categories while maintaining the equity in the brand and its microprocessor leadership position. In response to this challenge, the 2006 Intel retooled its brand identity, restructured its brand architecture, and launched an entirely new branding campaign called “Intel. Leap Ahead.”
Intel Corporation was founded in 1968 by Robert Noyce and Gordon Moore. Soon thereafter, Andy Grove joined the firm and later became President and Chief Executive Officer. Intel’s initial focus was the integration of large numbers of transistors into silicon chips to make semiconductor computer memory.
In 1978, Intel introduced the 16-bit 8086 processor followed by the 8088, the 8-bit bus version of the 8086 in 1979. These microprocessors were the first of the Intel “x86” line of microprocessors. At the time, Intel faced competition from a number of companies, the most serious being Motorola with its 68000 microprocessor. In response, Intel launched a campaign to make the 8086/8088 architecture the standard in the emerging microprocessor market. A critical milestone was IBM’s selection in 1980 of the 8088 as the exclusive microprocessor architecture for its first personal computer. The success of the IBM PC placed Intel at the center of the personal computer revolution and established Intel’s x86 microprocessor architecture as the de factor industry standard.
Intel continued to produce chips with improved performance over the next decade. Intel introduced the Intel 386 SX microprocessors, which became the backbone of IBM’s and other manufacturers’ growing PC lines and positioned Intel for its explosive growth over the next five years. In April 1989, the company introduced the next generation microprocessor, the Intel 486 processor. In 1990, Intel sold approximately 7.5 million 386 and 486 microprocessors. Intel’s 1990 revenue from 386 microprocessor sales alone was estimated at be $850 million. As of 1990, Intel had $3.9 billion in sales, representing a 360 percent growth in 10 years, and $650 million in earnings, representing a 570 percent growth in 10 years. Intel microprocessors were found in almost 80 percent of all IBM and IBM compatible machines. The company, one of the largest semiconductor manufacturers in the world, was recognized as the undisputed industry leader.
THE MICROPROCESSOR INDUSTRY IN THE EARLY...