Intel Inside Intel

A-4

Industry Characteristics
Short product cycles and steep performance curve Rising cost of New Microprocessor and Wafer Fabrication Hidden Product High Risk High Return

Intel Customer Segments

Two types
Original Equipment Manufacturers End users

Alternative 1: Yes
Stagnating sales of desktop computers Growing sales of portable digital devices such as PDA and cell phones Leverage the existing brand strength: Save time and money

Alternative 2: No
Consumer psychological acceptance? Experiment with Connected Products Division Failed May dilute the equity of the company

Recommendation
Alternative 1
Cell phones becoming increasingly complex Increasing costs of high end cell phones New Positioning: Computing Co-op advertising program