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Technology Stocks : Intel Corporation (INTC)
INTC 41.41+2.2%Dec 5 9:30 AM EST
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To: Mary Cluney who wrote (144560)10/2/2001 11:51:48 AM
From: Road Walker  Read Replies (2) of 186894
 
Mary,

re: It's not as if Intel is selling razors and razorblades. My guess is that the top 20 customers account for 80% of Intel mpu sales. The number of marketing people Intel needs is probably far less than most manufacturers in other markets.

The Intel Inside program has created tremendous value. It has been the most successful marketing program for a component ever. The value is reflected in the higher ASP's that Intel enjoys, compared with AMD.

Without brand value, created by marketing, Intel products become commodities, sold strictly on specifications. To figure the value of Intel marketing, just figure what the higher ASP's mean to Intel in gross margin dollars each year. It's huge. Plus the barrier to entry, to unseat a top 10 respected brand, keeps the competition at bay.

Brand preference doesn't just happen. The engineers may or may not make a superior product; the marketing folks are the ones that create the perception of a superior product.

John
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