Channel partners have been a driving force behind the early migration of quad-core processors, an Intel executive said yesterday, with the chip giant expecting momentum to build on the heels of deep price cuts.
"We passed the million mark [of quad-core processor shipments] in June, and it's been expanding ever since," said Eric Thompson, North American channel marketing manager, in an opening session at CMP Channel's XChange '07 conference Sunday.
"I want to thank the channel," Thompson said. "They are leading the world in transition to quad-core."
Thompson's remarks kicked off the conference at the Walt Disney Dolphin Hotel in Orlando, Fla., where more than 1,000 channel and vendor executives—from a range of technology areas—are gathering this week.
While Thompson spoke, a ticker on a large screen behind him showed a number crossing the 1.2 million mark in tandem with his comments. He said recent Intel price cuts on quad-core units for servers and desktops could add another spark.
"You can now order quad-core servers or desktops at about the same price as a dual-core," Thompson said. With average selling prices on the low end of the PC industry under continuous pressure, Intel has been working overtime to grow sales on the higher end of its product line.
The company's appearance at XChange '07 comes as it has been increasing its bets on virtualization technology, including a $218 million investment in VMware's recent initial public offering. Intel is also in the midst of transitioning from a server blade technology offering for the channel to one based on an enclosed, rack-mount design.
The Santa Clara, Calif.-based processor manufacturer has been relatively successful to date in combating the steep price erosion because of brisk sales of higher-end notebooks, among other things. For Intel's most recent financial quarter, executives said that the company's channel sales grew in what was described as a "seasonally down quarter," with lower inventories at the end of the quarter. Intel CEO Paul Otellini recently told financial analysts that the company's channel partners were making "good margins" on Intel products.
But Intel itself poked fun at some marketing challenges it faces. The Intel World Premiere event at XChange—a keynote session hosted by Shirley Turner, Intel's director of North American channels—included a whimsical mock game show where people on the street were videotaped as they tried to guess what various Intel product names stood for.
One of three people on the street interviewed in a video had an idea what Centrino meant (one thought it was a brand of automobile). And one man, when asked what he thought vPro was, answered this way: "Something that starts with a 'V' and is pretty professional?"
But Turner's lighthearted session, which also included a duet between her and a Diana Ross impersonator and was patterned on a daytime talk show, didn't hide the underlying business issue facing many attendees: Price stability and sales growth.
While Turner and other Intel executives spoke during the XChange event about vPro and dual-core opportunities, the headline was its emphasis on quad-core solutions in the channel. Brian Gregory, president of Network Innovations, an Olathe, Kan.-based solution provider, said he thinks Intel's price cuts on quad-core units will have an impact. "I think we'll start with them in the fall," Gregory said.
Vlad Mazek, CEO of OwnWebNow.com, an Orlando, Fla.-based global data solution provider, was less sold on the necessity of quad-core. But while saying customer conversations focus less on speeds and feeds than solving business issues, he did say customers would find some benefit in the power savings delivered by the new Intel platforms including quad-core.