When “it’s what’s on the inside that counts” - and when it’s not
Some thoughts on “Intel Inside” - one of the greatest branding successes of the late 1990s tech scene. For those who are unfamiliar, I’ve provided background context, followed by major issues, how Intel solved them, and parallels to Apple’s iPod line.
By 2001, Intel had risen to #41 on the Fortune 500 list and held an impressive 78.7% share of the PC-related microprocessor market. However, tides were beginning to turn: after hitting then-record revenues of $33.7B in 2000, the company saw its revenues drop to $26.5B in 2001. To turn things around, management needed to make bold decisions about Intel’s brand and marketing strategy.
What’s interesting, and ironic, is that Intel was partly responsible for creating its own enemy: unrelenting competition in a growing market. Intel had a long track record of blisteringly fast innovation, releasing new chips ~1x/year with performance improvements of orders of magnitude. This allowed Intel to rapidly grow in an uncrowded market, but also set an industry standard for high-speed product releases and created a whole category of PC-related media. This came back to bite Intel when companies like AMD, Texas Instruments, and Cyrix began producing Microsoft-compatible chips in the mid-1990s. The new entrants innovated quickly, and ate up market share as cheap PCs flooded the market.
Another challenge for Intel was rapid growth of portable digital device sales (cell phones and PDAs - for the youngins, ask your parents if they had a Palm Pilot). In the early 2000s, it held just 1% of the cell phone chipset market. As desktop computer sales slowed, Intel had to choose their path in the mobile device space.
One of Intel’s early solutions to flagging sales was the introduction of the “Intel Inside” campaign. The campaign was built on the insight that end users, not just computer design engineers, needed to know about Intel’s product differentiators. The team started with some market research, then through a quick-and-dirty billboard experiment, showed that marketing Intel directly to consumers had a meaningful impact on sales. This proof point was expanded to the umbrella brand of “Intel Inside”, which included a co-op advertising program to appease OEM partners.
Branding took on new meaning for Intel, as the “Intel Inside” campaign expanded and successfully introduced dozens of products to the market. Marketing and product development started to work hand-in-hand. 150M Intel Inside stickers were printed in 2001 alone, and Intel was ranked by BusinessWeek/Interbrand as the 6th most valuable brand in the world. You’ve definitely seen the sticker, potentially without noticing it.
And that last piece is the real issue. As Intel’s business grew, the clarity of “Intel Inside” branding began to fade, and the company had to compete in new areas. For example, Steve Jobs was not going to mar one of his Mac products with a blue sticker. Which brings me to...
Seeing the long list of Intel chips and their release dates reminded me of Apple’s many iPod iterations. Much like the “Intel Inside” campaign, iPods enjoyed massive success when they were first introduced. Eventually, sales slowed as competition entered the market, and Apple had to innovate (in product and branding) to keep up. Eventually, broader market trends shifted (for Intel, it was PC to mobile; for Apple, it was MP3 to smartphone), and Apple’s own products (iPhone, strengthened by App Store) killed its earlier ones (iPods).
Logos courtesy of https://logos.fandom.com/wiki/Intel_Inside. iPod evolution image found on Pinterest.
