Market cap

* For banks, enterprise value is substituted with market cap. Source: Bloomberg Finance L.P.

Performance of the brand

Intel Corporation is the world’s largest semiconductor chip maker and inventor of the x86 series of microprocessors found in most personal computers. Founded in 1968 as Integrated Electronics Corporation it saw massive growth during the 1990s, its designs fostering the rapid growth of the computer industry whilst becoming the market leader. With only Advanced Micro Devices (AMD) to challenge them in the microprocessors industry Intel has more than 80% market share.

2011 saw Intel’s brand value increase thanks to strong sales in all of Intel’s key areas. With the advent of cloud computing Intel’s future revenue looks good as they will continue to provide processors for the majority of new servers.

Major acquisitions

In 2011, Intel made two major acquisitions of McAfee and Infineon Technologies’ Wireless Solutions business.

The leading software security firm McAfee, bought for $7.68bn, added 12,000 software engineers to Intel’s ranks. Intel will look to integrate the security software with their hardware giving McAfee a performance advantage over other security rivals, helping to strengthen and diversify their portfolio.

The second key acquisition of the year for Intel was Infineon Technologies’ Wireless Solutions business. Bought for $1.4bn it signals Intel’s intent to move into the smartphone and tablet markets. Processors for these handheld devices are currently dominated by the British company ARM, Intel may be looking to take on ARM to replicate the huge market share they have of the PC market.

Chinese smartphones signals intent

Intel’s willingness to enter the handheld devices industry is clear in China where they have teamed up with ZTE Corporation to produce smartphones for the domestic market. Intel obviously sees Asia as a key market with 67% of revenue already coming from the region.

Cloud computing boosts core business

There are currently by some estimates more than 44 million servers in the world, the large majority installed with Intel processors. With cloud computing starting to take off this number will only increase, securing Intel’s core business for years to come. A key area of development in the server industry is reducing power usage because of the rising cost of electricity. With around 60% of a server’s power goes to the processor Intel will have to innovate in this area if it wants to stay competitive. Early signs are good for Intel as they look to code energy saving functions directly into their hardware.

Continuously increasing brand awareness

As the market leader Intel may be forgiven for resting on their laurels, however this is far from the case. Reportedly spending around $1.8bn a year on advertisement Intel’s brand awareness continues to grow. From an unknown in the 80s Intel and their range of Pentium processors are now a household name. Part of this success has not only been because of the huge amount spent, but excellent brand consistency. In particular there is the use of their sonic logo at the end of every advert by Intel directly and for any product using an Intel product – this consistency helps increase the brand recognition and awareness for Intel immeasurably. 

Court cases

The only blotch on Intel’s copybook is the large amount of lost lawsuits for anticompetitive behaviour such as paying suppliers not to use competitor’s products. In 2009, Intel agreed to pay $1.25bn to AMD in an out of court settlement and a recent case in 2010 saw Dell paying a $100m fine in relation to accepting rebates from Intel for not using AMD processors.

Although quite damaging to Intel’s bottom line, these incidents seem to not have impacted their brand value too negatively. Consumers and businesses alike continue to choose Intel as long as their products are of good enough quality, a trend that looks unlikely to stop any time soon.

 

 

Last changed September 30, 2011

League tables

Intel appears in the following brand league tables:

Rank 20 in the Global 500 2012.
Rank 27 in the Global 500 2011.
Rank 27 in the Global 500 2011.
Rank 29 in the Global 500 2010.
Rank 25 in the Global 500 2009.
Rank 15 in the Global 500 2008.
Rank 13 in the Global 250 2007.