Intel service bid irks third parties

Chip giant Intel faces the wrath of manufacturers and third-party maintainers as it moves into the service and support sector to bolster falling margins within the microprocessor market.

According to observers, the move will upset Intel's OEM partners as well as computer maintenance and services firms, although Intel is marketing the service as complementary to vendors hardware and software offerings.

The service - called Answer Express - will provide subscribers in the small business and consumer sectors access to help and online support over the internet.

The chip giant announced, in a profit warning on 4 March, that long-term gross margins would slip from 59 per cent to 50 per cent. This has forced Intel to venture into other areas to support its chip business (PC Dealer, 11 March).

No time frame has been given for introducing the service in the UK, but since it is a global company, industry watchers expect this to be imminent.

Peter Blampied, Compaq UK commercial marketing manager, said provided the Answer Express is not taking business away from the channel, it should not be a problem.

Sukh Rayat, general manager of chip distributor Flashpoint UK, said: 'It seems to be Intel attacking the little guys. But it is going to come up against local support. Nationally, Intel will struggle.'

Robin Francis, MD of reseller Essex Computers, agreed: 'There may be bits of support service business it could pick up, but I don't think it's a threat to us. We'll have to see how it presents itself.'

'Intel has to keep seeking ways to broaden its base, as chips are getting cheaper,' commented Terry Earnest-Jones, a PC analyst at IDC.

Rana Mainee, European market analyst and planning manager at rival chip vendor AMD, said: 'Intel's core business should not have to be supported by other parts of the organisation.' He added that AMD would not take a similar route. 'We don't want to set up in opposition with our partners.'