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Legend & Intel: Face to Face or Back to Back?
Yang Yuanqing, president of Legend Group, China's largest PC manufacturer, and Chen Junsheng, vice president and manager-general (Asia) of Intel Corp., world largest CPU manufacturer, finally stood side by side on Sunday afternoon in Beijing.
Without any important agreement signed, the two companies just jointly sell PCs directly to the consumer. However, the significance behind the sales activity has greatly exceeded that of the 276 PCs sold by the two presidents in the one-hour on-the-spot sale.
People may clearly remember that on July 2nd, the booming manufacturer TCL, which claims to unleash the most severe PC war with Legend, burst into the same department store with their Pentium-IV LCD PCs that are marked less than 10,000 yuan in price.
Just because TCL took the lead in introducing Pentium-IV to the Chinese PC market, many persons of the circle reckoned that it is the Intel which supported TCL and controlled the reshuffle of China's PC market behind to balance the Legend.
Almost simultaneously, domestic media quoted words of the personage of Legend that as a sort of revenge, Legend will probably cooperate with AMD, the largest competitor of Intel in the world.
Under the impact of the two rumors, how long the unique strategic relationship between Legend and Intel can still survive has become a hot topic of the whole circle.
Now Legend and Intel joined hands to sell PCs in China's three economic centers (Beijing, Shanghai and Guangzhou) which actually implies that Legend is still the overlord in China's PC industry, and Intel the most important weight for strengthening the Chinese PC market.
Although Legend is not the only cooperative partner of Intel and, therefore, has neither right nor capability to monopolize its CPU sources, Legend president Yang Yuanqing said frankly, the strategic relationship between the two sides will not be rocked at all.
By the last June, the proportion of Pentium-IV PCs in the Chinese market has reached 40 percent, of which, 55 percent are occupied by Legend. Even calculated on the basis of international market, Legend ranks the sixth in Pentium-IV CPU shipment. Therefore, it is crucial for Intel to strengthen the special ties with Legend no matter for what purposes it holds: to contain its competitors or to achieve the best possible economic benefit.
In fact, Legend appeared to be overcautious when launching the Pentium-IV PCs just because it had to give an overall consideration on its considerable scale. A rush action may possibly endanger its current proportion in the market.
While for Intel, it does need a pioneer like TCL to produce a "catfish effect" and turn the Pentium-IV PCs from a sophisticated product into the main stream of the market as quickly as possible so as to minify the continuous pressure from the AMD. However, this doesn't mean that Intel has given up Legend as a partner. On the contrary, Intel clearly understands that an isolated operation only by a heralding manufacturer like TCL without the support of a mainstay such as Legend will prove to be a very dangerous approach.
In such a circumstance, both Legend and Intel showed charms, unperturbed and cool-minded enough as did mature enterprises. Legend successfully shook off the shadows that the TCL ever had a lead in promoting the Pentium-IV PCs. It made the LCD PCs as a focal product and diverted the attention on TCL in the first half of this year. Depending on its own solid strength, Legend started to expand its proportion in the mainstream market, which has been tapped by TCL. Naturally, it also increased its weight in the Intel's overall arrangement in the world.
Though it's still early to make the final conclusion now, yet one thing is quite clear that Legend still proves to be an inevitable nightmare for other domestic PC manufactures. As to the strong impact rendered by the new PC manufacturers like TCL and Haier, it is the second-rate manufacturers, such as Founder of Peking University and Tsinghua Tongfang that should be on the alert. Because their position are more shaky and dangerous than that of Legend and so they are much easier to become a victim in the shuffle movement of the PC market.
By PD Online staff member Du Minghua
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