Intel's Centrino
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Authors: Ravi Madapati,
Faculty Member,
ICMR (IBS Center for Management Research).
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Launching Centrino
Grove was more excited about Centrino. As he put it7:
"I look at Centrino as a shot in the arm for the computing and communication industries."
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Intel budgeted about $300 mn to promote Centrino. This was close to the cost of the original and highly publicized Intel-Inside Pentium campaign. In addition, the company worked with telecommunications carriers, hotel chains and cellular providers to develop networks for "hot spots" public places that gave people wireless access. Intel never officially accepted that it was subsidizing such networks though its active role was clearly evident. Intel had also made a series of venture investments totaling $150 mn into Wi-Fi start-ups. But the future of Wi-Fi looked uncertain. A number of wireless data carriers had already gone broke while survivors had cut their fees. Notebook buyers often seemed to care more about price than about battery life. This aspect worried Intel as it launched Centrino . Intel's own product development plans had not gone without a hitch either. The company planned to integrate its first homegrown Wi-Fi chip into Centrino, but had delayed it until the middle of 2003. Instead, Centrino incorporated a Wi-Fi radio from Philips Semiconductor. Intel's communication group, which could have benefited the most from wireless acceptance, still lost money and faced stiff competition from incumbents. |
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Analysts predicted that roughly 35% of the notebooks shipped by the end of 2003 would come equipped with wireless. Despite all the concerns about battery power over the years, energy-efficient chips such as Transmeta's Crusoe and Intel's low-voltage Pentium III chips had not sold in large volumes.
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 price difference between Intel's mobile and desktop chips, usually hundreds of dollars, had been steadily decreasing since 2002 and the trend was likely to continue. Meanwhile, competitors were active. Atheros, Broadcom, Intersil and other wireless chip companies were trying to get their Wi-Fi chips included in notebooks and hot spots. The delay in launch of Intel's own Wi-Fi chip had helped these companies maintain their existing lead: HP, Dell and IBM all offered notebooks with Intel and non-Intel solutions. To attract customers, Intel was projecting its engineering capabilities.
The company had spent thousands of hours testing how the Pentium M and its approved wireless solutions worked with hot spots and third-party software. The first notebooks using Centrino emerged on March 12, 2003, at an event in New York attended by Barrett and senior executives from Dell Computer, Toshiba and others. 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.
7] CNET News.com, March 2003.