Intel has put millions of dollars behind the campaign to support its Centrino notebook technology, but the message isn’t reaching the US retail market and may miss the pivotal fourth-quarter holiday shopping season, according to analysts.
The Centrino package combines the Pentium M processor, the 855 chipset family, and the Intel Pro/Wireless 2100 chip for connecting users to 802.11b networks. Introduced in March, the technology has received very positive performance reviews from hardware enthusiasts and corporate notebook users, but retail buyers have spent their dollars on other technologies, director of industry analysis at NPD Techworld, Stephen Baker, said.
Only 4.7 per cent of all notebooks sold at retail during August came with the Centrino package, according to research from NPD Techworld.
The corporate market has traditionally represented the bulk of the notebook market, but US consumer interest in multimedia desktop-replacement notebooks has driven much of the growth this year and brought the percentage of consumer notebook purchasers more in line with corporate buyers, ARS analyst, Matt Sargent, said.
Consumers had snapped up bulky notebooks that offered desktop-like performance with fast processors and large liquid crystal display (LCD) screens on which to view DVDs or play games, Sargent said.
This group of buyers didn’t particularly care about mobility or battery life, since they rarely took the notebook out of their homes or unplugged it from the wall socket, he said.
“The biggest issue with Centrino at retail is the feature set just didn’t match what people are looking for, until the last couple of months,” Baker said.
Notebook vendors such as Toshiba and HP have recently introduced Centrino into widescreen retail notebooks.
The focus of Intel’s Centrino marketing had been wireless technology, which hadn’t caught on as yet with the retail notebook buyer in the US as a must-have technology, Sargent said.
That buyer was more concerned with price and perceived performance, two areas where Centrino had an upward battle, he said.
The Pentium M processor combines architectural features of Intel’s older mobile processors with performance features found in chips such as its Pentium 4 processor. By most accounts, it outperforms Intel’s older mobile processors, even though it runs at slower clock rates.
But Intel had failed to communicate that performance difference to retail buyers, who compared a 1.6GHz Pentium M processor with a 2.4GHz Mobile Intel Pentium 4-M processor, and thought the 2.4GHz label denoted the higher performing chip, Sargent said.
And when those buyers looked at the notebook’s price tag, and discovered the Pentium M notebook costs a few hundred dollars more, they were opting for the Mobile Intel Pentium 4-M notebook, he said.
Intel admitted that retail buyers had not received as much attention in the first six months of Centrino’s life, spokesperson, Barbara Grimes, said.
The company focused its initial marketing campaign on corporate buyers and road warriors looking for lightweight and wireless notebooks as their primary targets, she said.
Consumers in other parts of the world, such as Asia, were keener on thinner and lighter notebooks than their US counterparts, Grimes and Sargent said.
Centrino notebooks had done better at retail in Asia and Europe than they had in the US, they said.
But corporate sales remain sluggish, although in better shape than recent quarters, according to data released last week from IDC and Gartner. In order to stimulate demand among retail notebook buyers, Intel needed to either cut the price of the Centrino technology, or focus on the performance benefits of the Centrino technology in addition to the wireless capabilities, Sargent said.
Intel had already cut prices on both the Centrino package and the Pentium M processor earlier this month by up to 30 per cent on the high-end chips, which should help encourage PC vendors to adopt Centrino in less expensive notebooks, Grimes said.
The company has focused on the mobility segment of the overall notebook market, which will grow as corporations start to replace older desktop PCs with mobile units, according to vice-president and general manager, Anand Chandrasekher, of Intel’s Mobile Platforms Group.
Going forward, wireless technologies would capture the attention of more consumers, Baker said. But those who had already embraced wireless were choosing a standard for which Intel has yet to offer a product.
By the end of the year, consumers would favour wireless networking equipment based on the 802.11g standard over the 802.11b standard, Baker said.
Intel has said it will release an 802.11g chip in the fourth quarter, but if a product wasn’t ready right now, it wouldn’t be ready for any notebooks sold during the holiday season, Baker said.