JURY SPLIT ON PENTIUM FALLOUT

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Analysts are divided over whether the flaw in Intel Corp.'s Pentium chip poses a long-term marketing problem.

"I certainly do" think they have a problem, said P. Martin Ressinger, an analyst with Duff & Phelps, Chicago. "I am not sure the flaw is the problem. I think the way they handled it may have a negative impact."

The chipmaker discovered the flaw last summer but did not inform the marketplace. And it continued to ship flawed chips.

Rather than issuing a news release or holding a news conference, Intel CEO Andrew Grove posted a letter concerning the flaw to an Internet discussion group Nov. 27. In the letter, he apologized and said, "We would like to find all users of the Pentium processor who are engaged in work involving heavy duty scientific/floating point calculations and resolve their problem ... if necessary, by replacing their chips with new ones."

Intel said it chose to deal with the problem on a case-by-case basis because the flaw affects only those doing calculations nine places to the right of the decimal point.

Intel, which shipped an estimated 2 million units of the Pentium chip, did consult with the computer and software companies, including Dell Computer Corp., Compaq Computer Corp. and Packard Bell Electronics.

"Maybe it will have a short-term side effect but nothing long term. I don't think it will be a big deal for them," said Wendy I. Abramowitz, an analyst with Argus Research, New York.

The "Intel inside" campaign from Dahlin Smith White, Salt Lake City, has been under assault in the last year, with Compaq Computer Corp. pulling back and IBM Corp. pulling out-both feeling it detracted from their own brand names.

Mr. Kimball is a reporter with sister publication Advertising Age's Business Marketing.

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