Last year, Intel introduced its next-generation PC prototype, the Ultrabook, and promised millions in marketing support for vendors who adopted the thin, light, energy-saving device. In the spring, the company also launched its own ad effort for the Ultrabook, marking its largest marketing campaign since the rollout of Centrino wireless technology in 2003. Intel and analysts predicted the Ultrabook would have a significant impact on the industry, creating a new category and boosting bottom-line sales. It didn't happen.
Consumers did not widely adopt the machines as expected, and instead turned to tablets, revving sales in that category. Last month, analysts predicted that PC sales will fall overall this year for the first time since 2001—one firm slashed projected sales of Ultrabooks to 10 million units for 2012 from 20 million units.
Undeterred, Intel, primarily known as an ingredient brand, is mounting another campaign highlighting its trademarked Ultrabook with a refreshed strategy and creative executions, spending millions more to spur consumer adoption.
"What I see with this is Intel taking a strong stand and putting its stamp on the Ultrabook," said Dan Olds, principal analyst with Gabriel Consulting Group. "Technically, they're on the right track, and technically, they've built something that should be attractive to people. But they've had trouble getting traction. ... They had to shake things up a bit and I think this is the right direction. I just think it's going to take longer than they probably would have hoped."
Kevin Sellers, Intel VP-sales and marketing, believes that not only is the next round of marketing Ultrabooks better poised for success with the arrival of Windows 8 and the addition of touch and convertibility, but that the first round wasn't as bad as figures indicate.
"We put out there some very big goals, some big-stretch goals. And we didn't hit those stretch goals," he said. "However, the silver lining is that we really set out to move the market to the thin and light form factor. ... If you look at what we've done in moving the market to thin and light, that has been a big success."
Intel executives have long held that the PC is a "Darwinian device" that evolves and changes with consumers -- the Ultrabook is simply the next version. And while a PC maker could have taken the thin and light approach -- Apple did it with MacBooks, which use Intel chipsets -- Intel has led the so-called Wintel development and marketing efforts. (Wintel refers to PCs running on Microsoft Windows and using Intel processors.)
"If you look over the last 20 years, the R&D and marketing engine of the personal-computer industry has really been Intel and Microsoft. The device makers have really hollowed out in many ways," Mr. Sellers said. "It's very cutthroat, the margins are very thin and there is no clear leader. ... If we don't stand up and lead, and say, "Hey, this is where we're going,' there tends to be a lot of confusion and mixed direction."
Frank Gillett, a Forrester Research analyst, gives Intel credit for trying. His said his concern is that while Ultrabooks are finally comparable to the experience of MacBooks, which have a two year lead, people won't immediately be willing to pay premium prices for Ultrabooks. Apple has "trained" its customers to to accept high notebook prices, while makers of Windows PCs have not, he said.
Intel researched, studied sales trends and competitive dynamics and examined changes in software, hardware and connectivity to create the Ultrabook. It promised extensive marketing and advertising support to manufacturers adopting the specs, and required PC makers to include the message "Ultrabook Inspired by Intel" in marketing efforts.
"Up until now ... we've talked about being "inside,' and we talked about the performance you get with an Intel processor and all that ," Mr. Sellers said. "Now we're out there talking about Ultrabooks. We have in many ways thrown a curveball at consumers, because they know us for "being inside,' for performance and for microprocessors. ...They don't know us for making the end device or talking about the end device."
The first Ultrabook campaign, created by Venables Bell & Partners, broke in April with the theme, "New Era of Computing." That tag was attacked as critics pointed out the initial PCs weren't all that different. Mr. Sellers conceded the first Ultrabooks, while thinner, lighter and offering better security and battery life, were more evolutionary than revolutionary. But now, he contends, the revolution has arrived with the Windows 8 operating system and convertible models that bring the "wow factor."
The next-phase ad campaign, also from Venables Bell & Partners, bowed at the end of October and focuses on the convertible PCs. It's tagged: "A laptop when you need it, a tablet when you want it," and features Lenovo and Asus convertibles in the first two executions. This is the first time Intel has featured partners' PCs in its advertising, Mr. Sellers said. (Computers in previous ads were generic boxes.) The ads also more strongly emphasize the Intel connection. In one TV spot, a woman asks, "Is it powered by the sun?" with a man answering, "No, it's powered by Intel," as he points to the logo on the Ultrabook. TV ads will be complemented by digital, with a 60/40 split between the two.
Still, although Ultrabooks are a major focus for Intel right now, it is a temporary strategy. Once the category is established, Intel will return to its core ingredient branding.
"In the past, "Intel Inside' always meant for a computer. Now it can mean computer, it can mean smartphone, it can mean tablet, it can mean your automobile navigation or a whole host of things," Mr. Sellers said. "[We] want people looking for Intel inside their devices, not just in their computers. That's more likely where we evolve marketing going forward, once we're confident in the Ultrabook momentum."