Intel Rejiggers Compensation

Steve Dallman, director of North American distribution and channel marketing at Santa Clara, Calif.-based Intel, said the majority of the changes will go into effect Aug. 22 to coincide with a "possible price move" on some of Intel's products. He said the decision was made earlier this year after Intel executives met with partners to talk about compensation concerns.

"August was selected to provide a decent amount of notification and allow for worldwide coordination," he said. "To do it otherwise is to destabilize [the market] and harms those with planned builds and who are holding inventory."

The compensation changes will not affect Intel's mobile processor products, which may experience their own price and compensation changes later this year, Dallman said.

The impending changes are not completely new to Intel Product Dealers and Intel Premier Providers. The chip maker began changing compensation on other products earlier this year.

"In order to make the motherboard pricing more competitive across the board, [Intel] lowered pricing consistent with what the rebate was and did away with the rebate," said Steve Bohman, vice president of Columbus Micro Systems, Columbus, Ohio, and a member of Intel's system builder advisory panel.

Intel will unveil other program changes later this month, Dallman said.

Some Intel Premier Providers said the upcoming changes will have little impact since the compensation dollar amounts would largely remain the same. But some fear that Intel could silently eliminate the compensation down the road.

"We treat it as if it's not here," said David Su, president of Jetta International, a Monmouth Junction, N.J.-based system builder and Intel partner. "We're not going to change anything because of the change.

"In the long run, that rebate is going to disappear, from our perspective," Su said. "Every time they make a price drop, how do you know that rebate is included?"