The Bloor Perspective: Intel gadgets, Xbox opportunity, and brand values

As the PC market has continued to slow down, Intel has been suffering a significant downturn in fortunes. Compaq, Dell and other leading PC suppliers have issued profit warnings forcing Intel into a similar situation. At the same time, there is now a much more credible alternative in AMD chips offering good performance at lower cost. So, it comes as little surprise to find that Intel is looking to diversify with the announcement of a new line of gadgets.

The first is the Intel Pocket Concert, a portable digital audio player expected to provide up to four hours of music programming and 20 hours of voice audio. It has 128MB of memory that can store the digital data in both MP3 and Windows Media Audio formats. It uses a USB connection to PCs and there are other optional add-ons that allow it to be plugged into hi-fi equipment or car stereos.

Intel places the Pocket Concert alongside its other PC-related products such as the PC camera, its Intel Play PC toys and other wireless peripherals. More is to come, however, and CEO Craig Barrett was expected to demonstrate another two gadgets last week. These have been labelled the ChatPad and WebTablet. Other details are somewhat sketchy but we can probably guess what they do.

Intel's plan is to offer the market a trusted brand alternative to many of the devices already in the marketplace and add more credibility to the concept of connected portable devices. Like other suppliers before it, Intel is using the personal entertainment market to plant ideas in the minds of business users in the hope that this technology will find its way into corporate solutions in the future.

Whichever way you look at it, this is an interesting diversification. It addresses the problems that exist when one business is heavily reliant on the success of others. This is an opportunity for it to prove its technology further and then to develop its own markets.

*The Xbox cometh*
Microsoft is to release its Xbox gaming system at the Computer Show in Las Vegas this week, so it is rumoured. Will this be another world domination of a great giant, this time in the gaming market, or is this something of a spin?

This is an early launch for the Xbox, the Microsoft version of the gaming machine, set to compete against Sony's PS2. The strategy is no doubt to tumble the competitors' lead, capitalise on the PS2 delivery trouble this Christmas and give consumers the much awaited reduction in the price of games.

There is a cunning strategy being played by the Microsoft team, one that has been played before, albeit on a different stage. The aim is to embrace the world wide independent video game developer community, to introduce another one of those developer programmes for the community, and supply - so far free of charge - a prototype development kit to budding "game swatters". Using similar programming tools to those found on standard PCs, gamers now have the opportunity to realise their creative visions and make them available to the rest of the world via a licensed Xbox publisher.

The idea behind a gaming community and a development programme gives a solid footing for creating a wealth of exciting and new entertainment foundations. High performance hardware with connectivity provides an excellent future from here on. The proof in the pudding, is going to be reliant upon market pricing that is bearable by the consumer and a commitment to the development of software that runs on the Xbox.

Microsoft, in playing its cards right, can be a major winner with the Xbox. It is certainly an alternative to struggling server and desktop markets. With lots of financial backing, many strategic alliances and some experience in the gaming arena, Microsoft shouldn't lose. One slip up though, or one undeliverable, will give them the PS2 syndrome that Sony is suffering.

*Brand e-quity*
One of the key factors in the success of Amazon, eBay and Yahoo is branding. In the bricks and mortar world everyone knows about branding but it is really with the move to clicks and mortar that it has attained prominence and become an essential part of any new company's business arsenal.

Branding is money wisely spent, but a dilemma faced by the bricks and mortar companies is how to avoid dilution of their existing brand. The solution is often to treat the internet as a separate business entity and leverage off the bricks and mortar brand while establishing a separate, but associated, online brand. This has been done successfully by the Prudential with Egg.com.

However, the internet is only another channel to customers. So remember:
- the brand message should be easily understood and not gimmicky, just like a mission statement
- it should simply and concisely convey a compelling message for consumers to visit your site as a first point for the goods and services you provide
- you must be able to differentiate yourself from your competitors and convince consumers that your products and services are based on marketplace needs that you have identified and clearly understand
- once at the web site it is the role of content and site navigation to provide the consumer with what they want, when they want it and how they want it
- make sure that the goods and services measure up to the assertions made by your brand
- carry out user research, understand what message consumers are getting from your brand
- ensure the brand is carried consistently in all communication channels, not just your website.

Branding is important, but getting it right is more important. If you can't get it right, then don't bother.