IBM to Brand OEM Business

In a historic effort to tweak its time-honored brand, IBM Corp. is taking a page from rival chipmaker Intel by calling attention to its technology’s uses in consumer products.

Intel, of course, saw tremendous success with its “Intel Inside” program during the mid-90s, a branding, marketing and business development effort that helped make the chipmaker’s name one of the world’s most recognizable.

Now, Armonk, New York-based Big Blue is aiming to do the same thing, starting through an agreement with Japanese gaming giant Nintendo.

As a result, When Nintendo rolls out its new GameCube in mid-August, the video game console will be the first to bear a new “IBM Technology” logo on its external packaging, attesting to its use of IBM’s PowerPC processor.

The logo, which was designed internally by IBM with input from its ad agencies, resembles a light blue flag that is pulled back at the corner, revealing the IBM name.

Soon, IBM says it imagines the design appearing on products themselves — on PDAs, cell phones, set-top boxes, digital cameras, and other electronic devices. In fact, the company plans to ask all partners that purchase technology or intellectual property from IBM to use the logo.

IBM spokespeople said the company is currently in discussions with different customers, but would not disclose names.

Unlike some providers to OEMs, however, IBM says it’s making use of the logo voluntary, without any financial incentives. But spokespeople said that many are likely to adopt the “IBM Technology” brand because it enhances their own product.

“What we’re finding out is that many of our customers are seeing value in leveraging the IBM brand … to enhance their own product,” said a spokesman. “It’s not paid for, and there’s no marketing fees involved in this initiative. Basically, we just put it out there, because customers are finding that it’s adding value to what they do.”

Indeed, Genyo Takeda, who is the general manager at Nintendo’s integrated research and development division, said that by displaying the new logo, “the public clearly sees we are including the latest in IBM technology in our legendary product — technology that enhances the overall gaming experience.”

But IBM expects to see a return from the initiative as well. The company’s OEM business, which is less than a decade old, brought in about 11 percent of Big Blue’s revenue last year, and is seen internally as an important source of future revenue growth.

Accordingly, the branding push is intended to convey Big Blue’s readiness to establish sales and licensing partnerships with OEMs — a message that the company would like to see reach prospective clients by way of boosting awareness of the IBM Technology brand among end-users.

“As we move truly advanced … technology into the marketplace, it’s filtering down to the consumer space,” said a spokesman. As a result, reaching consumers with the logo will be “definitely significant in moving our silicon into [the OEM] space, where we traditionally haven’t played before.”

Added Lee Green, IBM’s corporate director of identity and design, “IBM’s growing business of selling and supplying technology to makers of consumer devices in the post-PC era has come of age.”

Additionally, IBM is considering using the logo elsewhere in the company, such as in its software group, although the company said at present those are “potential” uses of the new device.

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