Shift into consumer arena? Kim may lead Intel inside the home

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Intel inspired much head-scratching with its hire of Samsung consumer electronics guru Eric B. Kim to head up its corporate marketing. The riddle: Why would a business-to-business company that dominates computer chip manufacturing hire a huckster of cellphones and flat screen TVs?

Several industry insiders speculated that Intel may be working on an "Intel Inside" marketing strategy, this time for the digital home. Pushing the idea of a digital home could generate sales of smart, PC-type digital home devices with the Intel chips inside. Intel was quite successful with a similar strategy to create excitement and demand for PCs with its "Intel Inside" marketing initiative begun in the 1990s.

"One of the things that Intel has been trying to do is move the PC out of the office and into the consumer electronics space," said Dean McCarron, principal analyst at Mercury Research. "It's not a huge departure from what they've done in the past, but they'd probably need someone with good consumer experience."


Intel is tight-lipped about its future marketing plans, saying it will wait until Nov. 15, when Mr. Kim starts his new job as VP and director-sales and marketing group. "He was chosen for his credentials," an Intel spokeswoman said. "We believe he's going to bring the right skills to oversee the world-class Intel brand."

As with any top marketing job , speculation about an agency change runs rampant, and this time is no exception. The spokeswoman reiterated that Havas' Euro RSCG Worldwide "continues to be Intel's agency of record."

Other reasons Intel hired Mr. Kim might be to fend off newly aggressive rival AMD, to reach out into new markets and to help polish its image. A few missteps, including recent chipset recall and an adjusted downward financial forecast Sept. 2, have dented Intel's usually stellar reputation.

Some of the problems have been driven by competition. While still commanding a huge 83% of the PC semiconductor market versus AMD's 15%, Intel has slipped with a couple of recent innovations. AMD took the lead in offering 64-bit processors, forcing Intel to respond. AMD also took the initial lead in offering dual core chips, although both companies are now expected to release the chips in 2005.

star status

Intel might also want a consumer-marketing guru on board to launch products in the electronics arena. In the past, Intel manufactured a few consumer products including Web cameras and modems.

"There is a high brand recognition for Intel, so it's not inconceivable," said one industry analyst who follows Intel. "If they did expand into a new product space, I would guess maybe cell phones or other wireless devices."

Mr. Kim, 50, is credited with Samsung's evolution from a bargain alternative to Sony to a hip brand of choice, especially for young people. He brought Samsung into Olympic sponsorship, boosted ad spending by more than a third, and tripled marketing outlays to about $3 billion. Even inside Samsung, where his "star" status rubbed some fellow executives the wrong way, Mr. Kim is acknowledged as a key part of its success.

When hired five years ago, Mr. Kim was given wide latitude and autonomy to run marketing and advertising as he wished. However, some insiders believe that new restrictions on his autonomy over the past year left Mr. Kim frustrated.

Mr. Kim was overseeing the global advertising review at Samsung, begun in March and still underway. A decision is due this month.

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