INTEL INDIA: Ramping Up the Clock

President Ketan R Sampat Startup-Year 1997/1988* Dealers 1,8000 Employees 1,112 Branches 3 Address 136 Airport Road, Bangalore 560017 Tel 5075000, 5202460 Website www.intel.com/in

Ketan R Sampat President Avtar Saini Director, S&M SALES & MARKETING Amar Babu Channels GB Kumar Internet Solutions Group Jayant Murty Marketing CORPORATE Anjan Ghosh Public Affairs Debjani Ghosh Education Kumar Shiralagi Intel Capital

#S&M (1988) & IIDC now both part of Intel Technology India Pvt Ltd (est 1997)

Held on to 90% share, but shifted market to fast P4s, raising ASV and revenues Upcountry thrust: consumer/channel promos in Tier 3 towns Launched P4P-HT, Centrino mobile technology

Effective market development activity Strong govt support–tenders specify Intel systems Large channel (GID) network

Saturation market-share: only way ahead is down; growth dependent on new markets Zero channel margins–reseller discontent and churn; loss of Tech-Pac was AMD’s gain Some gaps if the very low end (15k-class) of PCs develops

When you next wonder if faster computers really help business, look at Intel.
Those P4s helped it clock 22% growth, against 4% for the PC industry.

How? Well, the market was three-quarters P4s, from just over a third a year
ago. And so while the average PC dropped 8% to Rs 33,000, Intel’s ASV grew 8%.
And its share of the PC value went from 16% to 19%. (Intel did lower Celeron
prices to counter AMD and Via in the Rs 20k category.)

But Intel’s channel success story hit some rumblers–discontent among
distributors on margins and gray sales. Top distributor Tech Pac switched to
AMD. That left Redington, Ingram, SES and Nebula (now eSys). Intel finally took
steps to curb gray sales, such as "de-listing" defaulters from its GID
list. These helped bolster margins, interest, and CPU prices.

An upcountry program took channel and consumer activities such as "PC
parties" into the lower half of the top 23 cities, ahead of a
small-business-user thrust.

Intel dropped its WiFi products (it will only supply chipsets). Network cards
and mother-board sales ramped up. The Dialogic division (a 1999 acquisition)
sold computer-telephony cards worth an estimated Rs 40 crore.

Intel’s India Development Center (IIDC) in Bangalore created a new wireless
mobility design center to focus on Centrino work, inter al. Intel Capital made
some new investments after negligible activity for two years. Intel’s
education added up to a score of 200,000 teachers trained.

Intel is now pushing portables through the "white-box" model. But
its big mobile play is the all-new Centrino, with integrated WiFi–the main
message during president Paul Otellini’s first India visit in June. Intel also
launched the P4HT (with hyper-threading), and faster Itanium and Xeon chips. The
Itanium did not take off–the CIO still doesn’t see Intel inside big iron.

But the big believer is the government. Its tenders mostly specify Intel
systems, and its lakhs of PC purchases on the cards could help maintain that 90%
share.