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Technology Stocks : Intel Corporation (INTC) -- Ignore unavailable to you. Want to Upgrade?

To: Paul Engel who wrote (74004)	2/18/1999 8:36:00 PM
From: puborectalis	Respond to of 186894

All-out advertising blitz to promote Pentium III by David Segal The Washington Post With a splashy daylong sneak preview, Intel unveiled a souped-up microchip, part of the company's bid to recapture market share it steadily has been losing to upstart rivals. The new chip, the Pentium III, is targeted at the high end of the personal and business computer market, generally computers costing $2,000 and more. Intel officials say the chip will offer jazzier three-dimensional graphics, smoother video images and enhanced voice-recognition capabilities. Some analysts, however, contend the chip is only a marginal improvement over Intel's current offerings. Intel is betting heavily on the Pentium III, backing it with a $300 million promotional campaign on radio, television and the Internet that will be hard to miss in coming months. Since last year, the chip giant has watched competitors including Advanced Micro Devices (AMD) and Cyrix invade its turf, with AMD making impressive inroads with computer makers selling machines for less than $1,000. Intel rolled out the Pentium III yesterday in an exhibition hall in San Jose, where more than 200 companies showed off programs built around the chip. The company, which will begin shipping the product to PC makers Feb. 26, will blanket the media with ads featuring people and animals walking through a blue door, symbolizing the enriched Internet experience they'll enjoy with their computers courtesy of the Pentium III. The chip is being launched as privacy advocates are organizing a boycott of it. They object to a feature that allows the chip to send an identification code over the Internet, arguing that it could allow operators of Web sites to easily track consumers. In last year's fourth quarter, Intel commanded 76 percent of the chip market - a huge share, but significantly less than the 85 percent it held a year earlier, according to Mercury Research, a market-research firm. Analysts said Intel lost ground because it failed to anticipate the popularity of low-end computers, though it has recently responded aggressively by cutting its prices. The Pentium III underscores that competition in the chip business is increasingly about hype and good marketing. There have been few significant advances in performance specifications in recent years, experts said, because of constraints imposed by the basic architecture of chips compatible with most PCs. Some industry watchers predict Intel's marketing muscle will ensure the Pentium III is at least a modest success, even though it's only a baby step forward in terms of performance. They say that users accustomed to its predecessor, the Pentium II, are unlikely to notice much difference. "Intel used to run ads that spotlighted specific improvements in its new generation of chips," said Drew Peck, an analyst with SG Cowen. "If you look at their ads for the Pentium III, however, you'll see they're just offering vague promises about having more fun with your computer." "This represents a missed opportunity for Intel to open up a technological lead," said Linley Gwinnap of Micro Design Resources, a research company based in Sunnyvale, Calif. "The Pentium III just isn't that exciting." When Intel first gained its dominance in the market, it spent little on advertising because consumers and PC makers flocked to its new and enhanced chips. The company now is spending mightily to stir demand for incremental improvements. Intel spokesman Michael Sullivan said the Pentium III contains special instructions that software makers can use to produce more sophisticated graphics. More graphically rich online-shopping experiences also are anticipated, he said. "Our view is that the people who use this will be those enthusiastic about computer use and people who really want to get the most out of the Internet," he said. Copyright © 1999 Seattle Times Company