Intel cutting back on the Intel Inside program,and it might lead to price increases?!

[CAT-THE-FIFTH]

Some news articles have popped up about this,and it might lead to price increases on PCs:

https://www.pcgamesn.com/intel-inside-partner-program-cut

Intel's Inside program getting cut would hit us right in the wallet with a PC price hike

Intel have been funding system builders indirectly for years - aiding in the marketing for builders and keeping prices down for the consumer. Sounds good for everyone (except AMD), right? Well, it might get cut.

Through their Intel Inside partner program, they have been strengthening their own market position among OEMs, system builders, and PC owners. Those third-party builders get a heap of rewards - indirectly, monetary, or otherwise - to help them along, too.

Members of Intel’s Inside program have been reaping the benefits of the system for some time, with Intel lending a hand in ‘co-marketing funds’, ‘marketing activities’, and other cooperative business stuff. All the OEMs need to do in return is buy a certain number of Intel’s products and place the Intel logo on their products to reap the benefits.

A report from CRN suggests that Intel are planning on undergoing huge changes to this OEM/Intel co-venture program, with Intel supposedly cutting funding across the board. Intel’s proposed cuts are supposedly up to a whopping 60%, which may leave OEMs and enthusiast builders to largely fend for themselves, or possibly start striking deals with alternative primary colour branded competitors.


“While we are evolving how we co-market with our OEM customers, the Intel Inside brand continues to be an important symbol of performance and quality,” an Intel spokesperson says in conversation with CRN. “The changes we are making are intended to help customers more efficiently and effectively market with Intel, while helping us market with more precision in alignment with Intel’s business priorities.”

It’s a strange time for Intel to ditch their ‘gold standard’ marketing model, considering 2017 was the first year in a decade that Intel have been under any kind of threat whatsoever, with AMD’s Ryzen processors arriving on the scene. It is especially a poor time for PC builders as prices are already sky-high from multiple fabrication issues for components.

It seems Intel are committed to their new vision of moving away from client-based computing and their ‘business priorities’ seemingly no longer lie with enthusiast gaming rigs. That’s because AMD aren’t Intel’s only competition, with Samsung quickly rising to the potential top-spot of semiconductor production in 2017, and Nvidia ushering in the end of the world as we know it with AI. Intel can potentially no longer justify the self-spending marketing budget in this segment.


But this is not hugely surprising. Intel have been repositioning themselves since CEO Bryan Krzanich announced the company’s departure from client-based systems in 2016 to move into the expanding cloud-based data, memory, and Internet of Things markets. This move seems to be following Intel’s push into forward-thinking markets, and we may be seeing less involvement from Intel in the direct sales and marketing of their ‘Intel Inside’ brand throughout 2018 and beyond because of it.

With Intel possibly ditching the marketing brand, many OEMs and system builders may find themselves in a difficult position, which could lead to more bad news for gamers. These potential cuts may lead to yet another pricing mountain that gamers have to climb in 2018 and beyond - as if GPU, SSD, and memory pricing increases weren’t bad enough.

 

[CAT-THE-FIFTH]

Yep seems odd, as would imagine it only really affects the really large OEM's like HP, Dell, Lenovo, Fujitsu, Acer etc. which then surely makes AMD processors on par cost wise, and so more incentive to offer.

For smaller/boutique builders (including OcUK), I imagine it makes little to know difference

It depends - in the US there seems to be far more rebates on DIY parts and far more deals too from the larger computer retailers,so it might mean less offers on Intel parts in those stores.

 

[CAT-THE-FIFTH]

I said in the OP it might lead to price increases for PCs,since if Intel is cutting money which subsidises their PCs,prices will probably rise,and by extension AMD won't need to price products as agressively too,so it might work both ways.

OTH,we will need to see how things pan out. I honestly hope prices don't get worse!!

 

[CAT-THE-FIFTH]

I don't understand how prices can affect the people in this forum. Surely it will only affect those that buy pre-built systems from Dell and the like.

The retail outlets and the customer then have the responsibility to decide if the price increase is worth it or not, especially now that their is a viable alternative.

If you have been following Intel for a while they are trying to diversify away to other areas outside the consumer market like the data centre,etc and this seems to be a continuation of that.

In places like the US it has the potential to increase prices. These kind of programmes most likely also cover some of the special deals like free games,free motherboards,etc which have been bundled with Intel CPUs. Just go onto certain famous retailers over there and it is shocking what they bundle with CPUs!! Then to fight such promotions you see AMD then dropping prices,etc to look more attractive.

Its good news for AMD as they simply don't have the money to usually fight all that all the time,so more OEMs will consider them for prebuilt PCs but also OTH,it puts less pressure on them to try and massively undercut Intel - remember even with Ryzen,AMD prices their cheapest overclocking motherboards lower than Intel,and bundles a better cooler,so they are already offering better value additions outside performance,together with a longer lived upgrade path. Once Ryzen starts hitting better clockspeeds,AMD will be offering twice the threads of what Intel offers at many price points,and also with much closer ST performance in games.

 

[CAT-THE-FIFTH]

I didn't know that, CAT, why don't we get those deals? :O

Lots of instant rebate,or in-post rebate,free games and free motherboard deals,or reduced cost bundles.

The US has mental deals - Corsair is famous for having some of their CX series CPUs for many years selling for like £15 to £20. Even with State taxes,it was still massively cheaper than here!

Plus the UK is not even as expensive as some other countries,so its even worse for some others!!

So basically without knowing all the in's and out's it's sounding like a bit of a non story. If you want to pay more then buy Intel if you don't then buy Amd.

I have very little sympathy for anyone willing to pay over the odds for something unless they are being told false information to male the sale, and I have even less sympathy for corporation/big businesses loosing revenue in kickbacks and what not.

It is actually a HUGE story. The Intel Inside programme covers the adverts on TV and YT,magazines and that little jingle that plays on adverts,when Lenovo,et al, advertise their latest laptop. Remember the last time you saw an AMD advert on TV,a billboard or YT??? I don't.

This is why despite the Athlon 64 utterly kicking Intel's arse,and most enthusiasts still getting an AMD CPU,mass sales still went to Intel. Even walking into the large retailers(or even online back then) you could hardly find an AMD laptop or desktop,which is even more surprising when the P4 had such bad performance/watt. I wasn't even a big enthusiast back then,but I did my research so was perplexed why there were so few AMD systems.

I remember when looking for a desktop replacement laptop back in 2003 to 2004 with a discrete graphics card,me and my mate could not find a single Athlon based laptop with one,and they were all P4 based!!

For many years I wonder why this was the case,and now we know.

Plus for years after that,many still bought Intel since they just saturated shops,and TV and magazines with their Intel Inside programme,and this is why Intel even know has such strong mindshare even amongst gamers.

 

[CAT-THE-FIFTH]

Also,have you noticed why many AMD laptops actually seemed to have worse build quality and specs?? As part of an extension to the Intel Inside programme,Intel actually subsidised cheaper unibody chassis,etc for laptop companies(I think this was mentioned on a website yonks ago),but it also meant OEMs who were part of this had to use them only for Intel laptops. If Intel is cutting back on this,it does also present AMD with a chance to even the playing field,and probably make a bit more money,which they desperately need for R and D!! You need to realise AMD had to drop prices much lower than was required to fight this - at one point years ago,they even offered OEMs FREE CPUs and they declined due to what Intel was doing.

 

[CAT-THE-FIFTH]

I'm happy for Amd potentially having a level playing field and we already know how naughty Intel and the suppliers have been.The advertisement industry is a multi $billion industry all in its self, they pay millions or billions to advertise for a reason because it gets results. Have you ever heard of a man called Edward Bernays? Not many will have yet his impact on the world is huge.
http://theconversation.com/the-mani...rnays-and-the-birth-of-public-relations-44393

But in what way will this be relevant for people like us?

Easy - Intel undercutting AMD and AMD needing to compete only on cost,ie,in cheaper products makes it look the lesser brand. The moment AMD can get into better products it uplifts the brand,so it makes it more likely people will spend more on products with their CPUs in it,and by extension AMD does not need to discount its products as much to compete. Like I said AMD in the past has had to do this,if they wanted to get into prebuilt computers even crappy ones,but all this does have an effect.

Also,there are plenty of people who do build PCs and will probably only buy Intel based on this perception - even during the P4 days plenty of DIY PC builds stlll used Pentium 4 CPU. Enthusiasts are not all DIY PC builders,just the ones who look at it as a hobby. Now consider that in places like the US,where Intel and its partners had lots of promotions for even DIY builders - AMD obviously would need to respond to that by dropping prices to make themselves look better value. Also apparently in some other PC markets,the Intel CPUs seem to be relatively better value than the AMD ones(!),which indicates they might possible be subsidising prices in one way or another. The moment Intel starts not doing that as much,AMD needs to compete less on price and TBH,AMD does need to grow its margins if we want them to compete for the next few years,since it means they can invest it back into better products.However,they will still undercut Intel prices,but if Intel prices go up,AMD will probably raise them too.

Now we need to wait and see if prices on Intel CPUs will go up or not,or will Intel be looking at other strategies outside "Intel Inside" and so on??

This is interesting.

Why do you think Intel would cut 60% of that budget? have they lost enthusiasm in the consumer markets, is it just not sustainable anymore, perhaps Intel no longer think its worth giving their stuff away to stop a competitive AMD march.

I mean if you're giving away or bundling at practically 0 cost motherboards and various other components as to pay 'in a legal way' not to use AMD then you're not making a lot of money out of that yourself if you have to keep doing it, what you are doing is just giving your products away to spite the competition, its not sustainable long term, OEM's are now using AMD's products so its not working anyway.

It appears Intel doing that has gained enough sales,for them to have quite high margins - even higher than Nvidia AFAIK. Remember,for Intel even a billion dollars barely dented their profits after the SB chipset issue,whereas for AMD it would be impossible. In fact look at the various companies Intel have bought and the tens of billions they have wasted,and it still does not seem to have really negatively affected them. It is not only that they have deep pockets,they seem to be able to borrow money relatively easily due to their size.

However,over the last few years,you have seen Intel investing more and more away from the consumer market,and into areas like the datacentre and AI,hence why you have all these 18 core Xeons since they probably think the PC market is getting smaller,and doing all these kind of rebates,etc is going to be spread over less and less sales. They also failed with Atom - billions spent on contra revenue and ARM based CPUs still won in many cases and its why you see less and less Atom based tablets and phones. This has meant pressure from the bottom too. For AMD OTH this works out quite well,as they have designed Zen to be quite scaleable and economical to produce,ie,almost like the ATI small die strategy but for CPUs.

Edit!!

It also could be cynical ploy - Intel can outproduce AMD,so maybe they realise even if AMD is at full pelt,they still will have the volume,and its more profitable for them to not bother now,and it is better spent elsewhere.