On 1 Nov 2002, at 10:31, Joe Lore wrote:

> Celerons stated back in the days of Slot 1 boards, at 300mhz @66mhz bus
> with no internal cache running at 66mhz bus to have a lower cost CPU
> solution - that gave them a bad rap in the industry that for the life of
> me, I do not understand why the marketing genius's at Intel have chosen to
> perpetuate the name till this day.

  Elementary marketing theory is that the relative strength of supply and
demand determines market price.
  More complex theory indicates that with non-essential goods, bringing the
price down attracts additional demand that won't pay a higher price.  In
some cases, it attracts enough additional demand that you can sell for a
lower price and make more profit.
  Where the marketing "genius" comes into play is in finding a way to sell
to this lower-price demand *while* continuing to command higher prices from
the customers who will pay them.

  For most semi-conductor companies, the way this plays out is that
"premium" customers buy the latest and greatest, and "bargain" customers buy
last year's model, on which the price has dropped.
  Several times, Intel has run into situations where a competitor is able to
deliver current-model performance on a mature version of last-year's
technology at a discount price.  Intel has responded by creating a "budget"
version of current (or nearly so) technology to compete in the discount
market -- and since the PII days, that budget line is named "Celeron".

  (Why would Intel keep a name with a "bad rap"?  Why, to keep the
businesses that buy "premium" P4s and Xeons from paying less to buy Celerons
instead....)

  Celeron is actually Intel's fourth attempt in 20 years to "segment" the
x86 processor market.  (I'm including the derivation of the 8088 from the
8086, although when IBM chose the 8088 for their PC, the "premium" 8086
market pretty much evaporated.  The 386SX and 486SX were somewhat more
successful at attracting buyers away from AMD's 286-12 and 386-40
respectively, without seriously cutting into 386DX and 486DX sales.)

David Gillett

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