B2b Marketing

INSTITUTE OF MANAGEMENT, NIRMA UNIVERSITY

B2B Marketing of Processors

Rough Draft

SUBMITTED TO:

DR. PRABHAT K YADAV

SUBMITTED ON: TUESDAY, 07 AUGUST 2007

SUBMITTED BY - THE APOSTLES : ANUBHAV SOOD - 071106: APOORV SHARMA - 071107:ARNAB SINHA - 071108: AYUS K. MEHARIA - 071109: DEBAJYOTI SHARMA - 071110

Market Overview:

(a) The Microprocessor Manufacturers

Moore's Law states that the number of transistors in an integrated circuit for minimum component cost doubles every 24 months. In effect it has led to an exponential rise in microprocessor performance over the past few decades.

And as the microprocessors develop, so does the market. Currently, with Apple virtually opting out of the G-series processors (G5, G4) and the failure of Cyrix, the microprocessor market has come to be dominated by two players: Intel and Advanced Micro Devices (AMD).

In this report, we would be considering three microprocessor classes:

(1) Desktop Processors

(2) Notebook Processors

(3) Server or Workstation Processors

The following chart shows the processor unit market share by segment for 2007

Segment Intel AMD

Servers 70.9% 29.1%

Desktops 71.0% 21.0%

Notebooks 85.2% 14.8%

(b) The Computer Manufacturers

World Market- HP is the leader in the world market with 19.1% share. Dell is second with 15.2% share in the world PC market. Acer and Lenovo are tied for third.

Indian Market- In the overall Client PC (Notebooks and Desktops combined) market the rankings remained unchanged. HP retained the top spot with a market share* of 21%, followed by HCL at 14%, Lenovo at 9% and Dell at 6% in terms of unit shipments.

In the total desktop PC market, HP led the market in CY 2006 followed by HCL and Lenovo. In terms of total commercial desktop PC shipments* HCL and HP jointly shared the number one position in CY 2006 followed by Lenovo. In terms of total consumer desktop PC shipments* HP led the market in CY 2006 followed by HCL and LG Electronics.

In the total Notebook PC market alone, HP retained the top spot with a market share of 38% in CY 2006 in unit shipments. Lenovo and Toshiba were at second and third spots with market shares* of 17% and 10%, respectively.

Marketing Strategies

Microprocessor manufacturers:

Intel

Keeping in view the needs of rural India, Intel has launched a "ruggedized" personal computer. These computers are designed to withstand adverse weather conditions including heat, dust and humidity and can run on alternate power sources, including car batteries. The chassis is designed to keep the motherboard cool at temperatures as high as 45 degree Celsius, and resistant to humidity levels of 70-85 RH (relative humidity). The total power consumption of all the peripherals is less than 100 watts. The platform comes installed with a certificate-based access, allowing banks to verify the validity of instalment payments against the purchase of the PC.

For manufacturing of these ruggedized PCs, Intel has entered into an agreement with HCL Infosystems. HCL has a considerable experience for designing personal computers for the Indian market (an important business deal was with the State Band of India, which catapulted HCL into the top tier). It aims to leverage this expertise along with advanced know-how and components from Intel to produce this ruggedized PC. Intel in turn, stands to benefit as well from this transaction as it aims to introduce such PCs in other markets as well.

Wintel Effect

* One of the most important partnerships in the global computer industry is that of Intel and Microsoft. Cheap PCs using processors (CPUs) from Intel, coupled with operating system (OS) software from Microsoft, have defined low--cost computation for most people. The partnership was dubbed `Wintel' -- Windows from Microsoft, on computers with CPUs from Intel.

* Through the 1980s and the 1990s, the Wintel partnership worked smoothly. Intel had the highest volumes of production of CPUs, and PCs were ubiquitous low--cost computers. In order to use PCs, there was no alternative but OSes from Microsoft. Microsoft kept releasing slower software, forcing users to require faster CPUs. As long as Windows worked only on Intel processors, Intel had an interest in supporting Microsoft. As long as non-Microsoft OSes did not run on Intel CPUs, Microsoft had an interest in supporting Intel. Anyone who chose one of Wintel tended to use the other.

Apple dumps IBM microprocessor for Intel (2005, San Francisco Chronicle)

* Intel's microprocessor development roadmap promises features like more efficient power consumption that Apple did not foresee in similar plans for the IBM PowerPC processor.

* We are thrilled to have the world's most innovative personal computer company as a customer," said Paul Otellini, president and CEO of Intel, said in a statement. "Apple helped found the PC industry and throughout the years has been known for fresh ideas and new approaches.

AMD

AMD marked its transition into advanced 65-nm process technology with the launch of Athlon 64 X2 dual core desktop processors, which uses less power and gives better overall performance.

AMD has entered into a contract with Sahara Computers and Electronics Limited (SCEL), a joint venture between Sahara India Pariwar and Sahara South Africa, to build and sell a range of Sahara-branded computers based on AMD processors