Intel reboots Celeron via store push

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Intel Corp. missed the boom in low-price PCs last year, and missed the mark when it offered its own cheap chip in April. But the chip giant is getting back into the game today with the launch of a higher-power entry chip.

It will be backed by Intel's biggest in-store marketing push.

Intel is betting on--and receiving--better reviews for the new faster, more powerful versions of Celeron, the "value" chip dismissed as a stripped-down Pentium II when it was introduced in April.

"It did get off to a slow start," acknowledged David Baumgarten, Intel's retail marketing manager for the Americas. "But I think it's a great product, and a product that's going to get better and better."

SEGMENTING IS LONG-TERM

This year's move to market segmentation--Celeron for value, Pentium II for power, Pentium II Xeon for servers and workstations--"is a long-term program for Intel," he added.

Though Intel today formally launches the new Celeron, it allowed PC makers and retailers to begin selling the new models Aug. 23, part of a back-to-school push. On that day, it deployed close to 600 sales, marketing and finance staffers into stores to demonstrate products. Earlier this month, Intel fielded a national training day for more than 7,500 store sales reps.

"It definitely is our biggest in-store effort to date," Mr. Baumgarten said.

Intel plans more in-store promotions for the fourth quarter.

Earlier this month, the marketer began a radio campaign nationally, supplemented with buys in 18 key markets. Commercials explained the Intel lineup of Celeron and Pentium II chips. Euro RSCG DSW Partners, Salt Lake City, created the campaign.

Intel is the world's biggest tech ad spender, pumping some $900 million a year globally into "Intel inside" co-op advertising and its own ads.

But cost-conscious consumers seem more interested in the PC brand and a given PC's value features than they are in what's inside: Intel's share of the hot sub-$1,000 PC market slumped to just 35% in June, estimated market researcher PC Data.

COMPETITION FROM AMD

PC makers once wedded to Intel have found a ready market for PCs featuring chips from rivals, notably Advanced Micro Devices.

Three big home PC names that put non-Intel chips in cheap PCs--Compaq Computer Corp., Hewlett-Packard Co. and Packard Bell NEC--are installing the new Celeron in some sub-$1,000 models, demonstrating that Intel can win back business in the low-margin consumer market.

"You're going to see Intel very focused to address this market," Mr. Baumgarten said. "I think you're going to see our efforts increase, and I think you're going to see our volumes and market share increase as well."

Copyright August 1998, Crain Communications Inc.

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