Photographs by Jim Wright
When Paul Otellini, Intel's famously reserved CEO first heard the news, he got quiet. "The madder I get, the quieter I get," he says, an important footnote for any Otellini user manual. He was hushed via press conference by Neelie Kroes, the European commissioner for competition. "Intel used illegal anticompetitive practices to exclude essentially its only competitor and thus reduce consumer choice in the worldwide market for x86 chips," Kroes read last May from the 542-page decision on an antitrust case charging Intel with unfair trade practices. The fine: a record 1.06 billion euros, about $1.45 billion U.S.
Kroes ended pointedly: "Finally, I would like to draw your attention to Intel's latest global advertising campaign, which proposes Intel as the 'Sponsors of Tomorrow.' Their Web site invites visitors to add their 'vision of tomorrow.' Well, I can give my vision of tomorrow for Intel here and now: Obey the law."
For Sean Maloney, then Intel's chief sales and marketing officer, Kroes's parting shot was a cheap one. "That was almost the most emotional thing about the whole day," he says, his face a storm cloud. "We were bracing ourselves for what was going to happen, and then this sarcastic remark." He makes a motion with his hand, a knife twist in the air.
Chipzilla, as Intel's snarkier critics call it, has a decades-long history of high-stakes litigation, first defending against the Japanese in the 1970s, and lately going toe-to-toe against Advanced Micro Devices. It was former Intel CEO Andy Grove -- decidedly not quiet when angry -- who was famous for his "silver-bullet test": If you had only one bullet left for your competitors, which one would you shoot?
But to Otellini and Maloney, who was recently elevated to executive vice president, Kroes's slap about the ad campaign had a particular sting. To be on the losing side of a billion-and-a-half-dollar judgment -- which they are appealing -- is a blow. But to Intel insiders, the ad campaign already signals a new kind of Intel -- no less ambitious, but more collaborative, more sympathetic, more human. And greener too. Their past may still haunt them, but the path they are on is far, far different.
Grove famously bet the company on a new chip architecture in the 1980s; Otellini has bet a now far larger company on at least as dramatic a shift -- without explicitly calling attention to it. Since Craig Barrett term-limited out as CEO in 2005 (Intel chiefs must retire at 65), Otellini has been subtly remaking the company: aligning with Apple, in a step away from the company's PC-only heritage; pushing the Atom mobile chip, in a dogleg pivot from Moore's Law, the founding axiom behind Intel, that chips get exponentially faster; and embracing new territory, new markets, and new ways of playing with others. The goal is to better compete in a world in which computing is everywhere, from laptops to tractors. Maloney, Otellini's right hand, whose sphere grew dramatically in the company's recent restructuring, has been crisscrossing the globe to tap the deep wellspring of cash that is worldwide government stimulus money. And this past winter, Otellini decided to sink $7 billion into U.S.-based manufacturing, just as other businesses outsourced to limit costs.
There is no better prism through which to see Otellini's reengineering -- and his spur to action -- than that ad campaign. "I was seriously worried about the timing," says Deborah Conrad, Intel's branding chief. Launched just a few days before the EU announcement, it is Intel's boldest new marketing effort in 15 years: a series of clever -- and, yes, funny -- commercials emphasizing not Intel's products, but the people who make them. In the first spot, a geeky engineer, the inventor of the USB, struts into a shiny lunchroom and is accosted by fawning autograph hounds and love-struck women. The punch line: "Our rock stars are not like your rock stars." Despite Conrad's concerns, the ad quickly racked up millions of YouTube views, inspiring fans to create T-shirts with the engineer's likeness and prompting a flood of résumés to Intel HR.
For all the economic turmoil, Intel has been delivering: After a brutal 2008, when net income was down 24% from the prior year, the chip maker managed $9 billion in gross revenue for the third quarter of this year, up nearly $1 billion from the previous quarter, beating estimates by a half-billion dollars. Investors are noticing. At press time, the share price flirted with its 52-week high, up 36% for the previous six months.
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Recent Comments | 8 Total
October 15, 2009 at 9:52am by Mark Martin
Re:
"If the company controls manufacturing, it can control quality. "Now, we're going to be a generation ahead." He had another motive, too: "I wanted to get the attention of the government and to send a message to other companies that Intel was investing in the United States at a time of great uncertainty, and that we should reinvest together in the infrastructure of the country.""
Amen.
October 15, 2009 at 11:23am by Canonical SEO
Honestly, I think the EU needs to get a grip. I'm beginning to wonder about them and all the huge fines they're handing down these days.
I haven't really followed this particular case that closely, but the EU seems to be cracking down hard on anything that even appears to be a monopoly. And the targets often appear to be US companies.
Don't get me wrong, I like having options... but sometimes I wonder if it's not just a case of the European socialist roots coming through in their decisiones... perhaps a lack of tolerance for "free market", competition, and survival of the fittest.
Canonical
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October 15, 2009 at 5:38pm by Varun Arora
I think the story of the Atom needs to be told in greater detail. How often is it - as you've rightly pointed out - that a company introduces a product that's CONTRARY to their philosophy with everything they've done so far, and that product becomes a run-away success? An Atom in a sewing machine? Awesome.
- Varun
Founder, www.homecamera.com
October 16, 2009 at 11:03am by Pam Davis
Congratulations! I love the ads for Intel. They always get a hardy laugh out of me! I think it’s great to put real faces with the product’s innovators; they are truly the stars behind Intel! Intel has become a more humanistic, green, and innovative company, which all starts at the top! My future is anything with "Intel inside". I wish them the best with not only their original and creative ad campaign but also the refreshing new outlook of the whole Intel team!
October 16, 2009 at 7:35pm by Fred Friend
Intel's done a lot of great things and doesn't always deserve the hits to their reputation - but the ads declaring Ajay Bhatt as the inventor of USB are conceited. USB resulted from a 3-way collaboration between Intel, Microsoft and Compaq, with a team of people, and it would be both gracious and honest for Intel to share the credit with their partners.
October 17, 2009 at 9:26pm by Paul Gittings
@Pam Davis: First of all, devoting your purchases for whatever reason it may be is just unintelligent. Doing it because you like the Ad campaign is probably the most silly thing you can do with stron anti-societal repercussions. Secondly, you seem to be willing to accept intel's new direction without accepting its old practices that stifled competition (read AMD).
@Fred Friend: The ad declares him as the co-inventor, not the sole inventor, so I think they are right in their ad content.
@All Intel and AMD Fans: Please learn to be reasonable. To brag about a company's greatness even when you do not work for them is kind of stupid. Both Intel and AMD have made mistakes. Both have to face legal action for any wrongdoings for they are against society as a whole given their magnitude of operations. I am a not a fan of either company. I only want them to play on a level field without cheating because I know that's the only way I will be benefited as a person.
October 17, 2009 at 9:35pm by Paul Gittings
@Canonical SEO: And what is so wrong with having socialist roots. Naming every effort of any governing body to curb anti-competitive practices as "Socialism" is just plain nonsense. you use the terms "free market, competition, and survival of the fittest" as if they are a virtue. You know how you have freedom to carry a weapon until you misuse it, its the same way with all that you stated. All of them have been abused beyond our limits of our understanding and the companies that abused them HAVE TO PAY. What is so wrong with that. Intel may be painting a rosy future now, but the fines are for Intels practices before all this started.
October 26, 2009 at 7:45pm by Sean Flanagan
Please, this is just a fluff piece kissing Intel's butt. Don't tell me how much they are worried about Americans and the maufacturing infrastructure as they sent thousands of maufacturing jobs overseas. This year, they closed the factories in Colorado Springs, Santa Clara, and other sites(I used to work at D2), putting thousands of middle class Americans out of work, who had given decades of hard work, while opening a $450 million dollar technology Campus in India and Five new production facilities in China. So much for quality control. As a fellow person of Irish descent, Mr. Maloney has been given the gift of gab, as it this article proves. However, now I would like to see him put his money where his mouth is, stop outsourcing and re-invest in America. The Europeans protect their prime industry manufacturing and so should we. Intel has always been famous for thinking outside the box, now they are just following the herd overseas.