The Great Pentium Bunny Roast Intel Inside

In this environment, semiconductor giant Intel spotted an opportunity.

Earlier in its history, the company had launched a marketing campaign aimed at IT types that was designed to convince them they should be concerned about whether their computers were built around Intel's 386 processor. The program had been fairly successful, and now Intel believed it was time to be more ambitious and make Intel a household name. Though people increasingly cared less about what company manufactured their PC, they still wanted to compare their purchases and brag about them. As a consequence, computer owners had begun to worry about the specifications and speed of their processors2 in much the same way that car owners obsess over the horsepower and cylinder specs of their respective buggies.

Intel reasoned that if people were going to worry about their microprocessors, the company might as well make them worry about not

2 This obsession led to the phenomenon of overclocking, the unauthorized (by the manufacturer) boosting of a microprocessor's speed by ratcheting up its designated clock speed. The first modern overclockers were purchasers of the original IBM AT, who discovered they could open their units and easily replace the 6 MHz crystal that governed the AT's 80286 chip with a 8 MHz unit. (In point of fact, the 80286 chip in the AT was an 8 MHz unit.) The author occasionally indulges in this nefarious practice and has a collection of fried chips and motherboards to prove it.

having one made by Intel. And while Intel was at it, the company should provide disincentives to computer manufacturers in the rapidly growing home market for PCs from using anything other than Intel microprocessors inside the boxes being purchased by Joe and Josephine America. These dual motivations gave birth to the "Intel Inside" program, the most massive consumer branding campaign high tech has ever seen. The Bunny People were released on an unsuspecting world.

Intel Inside consists of two key components. The first, and perhaps most significant on a long-term basis, is the marketing development funds (MDF) (or bribe, depending on your point of view3) aspect of the program. Largely hidden from public view, Intel's MDF systems work by kicking back to manufacturers an average of 6 percent of the total average selling price of the company's worldwide monthly microprocessor shipments. In return, computer makers agree to display the Intel Inside label on their computers and in their advertisements.

The accrued MDF funds don't go directly to the vendors. Instead, Intel deposits the money in an Intel-managed account the manufacturers must use to pay for print, Web, TV, or radio advertising for their Intel-based systems. If they don't use the funding within 12 months, they lose it.

All Intel Inside participants must submit every ad, regardless of medium, to Intel for approval. Ads are checked for compliance with Intel corporate identity standards for

• prominence of Intel's logo,

• verbiage in the accompanying taglines, and

• click-throughs to Intel websites for Web advertising.

Intel also "manages" the percentage of the funds that vendors must use for advertising in each medium. Helping Intel manage the process is a 100-page manual of regulations that even dictates how ad copy must be written. Failing to follow Intel's guidelines and committing even

3 MDF plays a similar role in the software industry. In 1988, I spent a day in Buffalo, New York, handing out what are called spifs (cash payments) to telemarketers at computer distributor Ingram Micro every time they sold a package of WordStar 2000.

a minor infraction can lead to all MDF funds being frozen. Adding a product that uses a non-Intel chip to an existing line leads to forfeiture of all Intel MDF for that line. The vendor must establish a new product line to maintain access to its Intel Inside funds.

Intel Inside has proven very successful in locking Intel's competitors out of the top end of the market. Of the top-ten PC makers, only HP currently uses non-Intel chips in its business desktop lines, though nine of the ten top PC makers use non-Intel chips in brands targeted at the consumer and small office/home office (SOHO) markets. Computer giant Dell, despite nonstop flirtations with Intel's main rival Advanced Micro Devices (AMD) that were designed to keep Intel honest, remained an Intel-only shop until recently and has only grudgingly admitted a small number of AMD systems into its product lineup.

Invasion of the Bunny People

The second and far more visible aspect of Intel Inside is a massive media campaign consisting of a series of ads and commercials featuring all sorts of jiggly, jiving critters. The first generation of Intel media pitchmen were known as the "Bunny People": dancing "technicians" who leaped around in the "clean suits" worn by the people who work in semiconductor fabrication plants. Just like real rabbits, the Bunny People have been supplanted by numerous descendants, including the Blue Man Group and animated aliens who look like Bunny People whose genes have been subjected to nuclear radiation in a hidden lab. In addition to the Bunny People, Intel also created a jingle (the company calls it a "signature ID audio-visual logo") placement program—that ubiquitous 3-second tad-dah-tad-DAH song snippet millions of Americans have had pounded into their subconscious during a Dell or Gateway TV ad.

The main thrust of Intel's media campaign was to convince people that computers are more fun, exciting, and colorful if they have Intel inside, and after spending a great deal of money, Intel succeeded in doing just that. Millions of people knew about Intel (though many weren't precisely sure what they knew), bought computers that had Intel inside, and were confident that in doing so they had assured themselves of the very best computing experience they could have. That's because their computers had Intel inside, and that was a good thing because . . . Intel had spent a lot of money to hire dancing Bunny People to say so . . . and because it costs a lot of money to hire dancing Bunny People, lots of people must be buying Intel . . . so Intel has lots of money to spend on dancing Bunny People and that's . . . a good thing!

By 1994, the Intel Inside program had built up a full head of steam, and that was a good thing, too, because Intel was about to introduce its Pentium chip, a major product and marketing milestone for the company. Prior to the Pentium, Intel had identified chips via a series of numbers that also corresponded to the chip's ancestry. The 286 was the second generation of the 8086 line, the 386 the third generation, and so on. However, Intel had been told by a very unsympathetic trademark office that it wouldn't be granted a trademark on a series of numbers, and that anyone could call their chip a "486" if they felt like it. Intel promptly renamed its 586 the "Pentium," and the Bunny People were instructed to leap about with enthusiasm to celebrate the event.

People responded favorably to all of this frantic dancing, and new Pentium-based computers flew off the shelves. The computers all seemed to work very well, undoubtedly because of the Intel inside them, and America was a happy, happy place. And then a disturbing serpent appeared in Intel's sales paradise as a rumor spread through the Internet and the media about a flaw in Intel's latest microprocessor. It appeared the Pentium inside in your computer couldn't . . . well . . . count.

The Rabbits Fail Math

The problem was with the Pentium's floating-point unit (FPU). An FPU speeds up the operations of software that does extensive calculations involving decimal-point math. Unlike previous Intel microprocessors, all new 58 . . . er . . . Pentiums integrated an FPU directly into the chip itself. Prior to this, if you wanted to obtain the benefits of an FPU, you often had to purchase a separate chip, usually called a math coprocessor, and install it inside your PC. Most people didn't bother; only a handful of software packages made much use of FPU math operations.4 But people

4 Foremost among the applications supporting the Intel's FPU chips was 1-2-3 from Lotus. For the first several years of its existence, 1-2-3 almost exclusively drove sales of Intel math chips. Interestingly enough, Intel also had a text coprocessor it periodically marketed to word-processing companies, but none of them ever developed for it.

who were concerned about math operations did buy them or bought chips that had FPU capabilities, and being math types, they tended to be quite picky about the answers the chips provided.

One of these picky people was Thomas Nicely, a math professor at Virginia's Lynchburg College. In the summer of 1994, while checking the sum of the reciprocals of a large collection of prime numbers on his Pentium-based computer, Nicely noticed the answers differed significantly from the projected correct values. He tracked the error down to the Pentium by running his calculations on an older system that used a previous generation 486 chip. This unit spit out the right answers.

Confirmation in hand, Nicely promptly sent off some inquiries to Intel about his results. Intel, wrapped up in the care and feeding of its Bunny People, ignored him. Nicely thereupon posted a general notice on the Internet asking for others to confirm his findings. Intel, after realizing Nicely was not going away, talked of hiring the professor as a "consultant," and Nicely signed a nondisclosure agreement that basically said he wouldn't discuss further developments on the issue. The cat, however, was out of the bag—to Nicely's, and Intel's, great surprise.

What was actually happening inside the Pentium was fairly obscure (except to picky math people). The Pentium contains what are called lookup tables, rows of values embedded in the chip that speed up math calculations. When creating these tables, someone had put a zero in one of the columns. What should have looked something like this:

123456789 looked something like this instead: 123456089

The real-world results of that misplaced zero were that the Pentium would give incorrect answers on numbers that went past four decimals. What should have read

5505001/294911 = 18.666651973 (486 with FPU) instead came out as

5505001/294911 = 18.66600093 (Pentium)

Making matters worse for Intel was that as the investigation into the Pentium's problems continued, other, even more obscure problems surfaced with the chip's math processing.

As Intel was quick to tell everyone, a bug in a microprocessor's embedded code or data isn't a new phenomenon. An errata sheet, a document listing known problems with a chip, accompanies practically every major CPU released by Intel, Motorola, AMD, and so forth. Engineers are used to dealing with these problems and devising workarounds. Usually, the chip's maker issues a software patch to deal with any programming or application issues, the fabrication plant makes an inline change to its manufacturing process, and that's that. After all, these things happen, and Intel had never promised you a rose garden.

Um, well, yes, it had. Somehow, as the Bunny People had leaped and cavorted on the screens of America's TVs, they had failed to mention errata sheets. Software patches. Workarounds. They hadn't mentioned those at all! Millions of computer buyers were confused and amazed.

Intel's actions subsequent to the disclosure of the Pentium's FPU faux pas epitomized techno-geek stupidity at its worst. As news about the problem spread, Intel announced that

. . . an error is only likely to occur [about] once in nine billion random floating point divides . . . an average spreadsheet user could encounter this subtle flaw once in every 27,000 years of use.

Critics responded by noting that although it might be unlikely you'd get a wrong answer, if your calculation met the right conditions you could be sure of getting a wrong answer. And worse, there was no way of knowing whether you had gotten a wrong answer. In the meantime, IBM halted shipment of Pentium-based computers (which wasn't that big a deal because they were still selling more of the older 486 units) and told everyone that "Common spreadsheet programs, recalculating for 15 minutes a day, could produce Pentium-related errors as often as once every 24 days." Wow! That sure sounded more often than 27,000 years!

Then it was disclosed that Intel had known that the Pentium flunked math before it shipped and hadn't bothered to tell the public. OK, it would have been odd to have the Bunny People dancing around with signs on their chests that proclaimed "1 + 1 = 3," but still! We the people expected our Intels inside to be able to count, for God's sake.

Not content to leave bad enough alone, Intel then compounded what was a rapidly growing PR nightmare by having Intel CEO Andrew Grove issue an apology over the Internet while the company was simultaneously telling everyone it wasn't planning a mass recall of the Pentium and intended to sell its existing inventory of math-challenged chips until it was exhausted. After this you could presumably buy a computer that counted correctly. At this point the Bunny People were leaping about to the point of cardiac infarct, but not many people were watching them anymore. People were starting to get really angry or were telling mean jokes about the Pentium. Jokes like this:

Question: How many Pentium designers does it take to screw in a lightbulb?

Answer: 1.99904274017, but that's close enough for nontechnical people.

Question: Complete the following word analogy: Add is to Subtract as Multiply is to a) Divide b) Round c) Random d) On a Pentium, all of the above

Top Ten New Intel Slogans for the Pentium

9.9999973251 It's a FLAW, Dammit, not a Bug 8.9999163362 It's Close Enough, We Say So 7.9999414610 Nearly 300 Correct Opcodes 6.9999831538 You Don't Need to Know What's Inside 5.9999835137 Redefining the PC—and Mathematics As Well 4.9999999021 We Fixed It, Really 3.9998245917 Division Considered Harmful 2.9991523619 Why Do You Think They Call It »Floating* Point? 1.9999103517 We're Looking for a Few Good Flaws 0.9999999998 The Errata Inside

Intel didn't think these jokes were funny at all, but the company wasn't yet done exploring the depths of marketing stupidity. Shortly after Grove's unconvincing Internet mea culpa, Intel announced that yeah, OK, for all those whiners out there, yeah, the company will swap out your Pentium if you're prepared to explain why you need a computer chip that can count right. And buddy, the explanation had better be good.

By now the Bunny People were achieving leaps of absolutely stratospheric heights, but no one was watching, no one at all. A new joke about the Pentium began making the Internet rounds. It wasn't that funny, but to a great many people, it sounded highly accurate:

Question: What's another name for the "Intel Inside" sticker they put on Pentiums?

Answer: Warning label.

The Dark Bunny Dream of Andy Grove

At this juncture, rumors began to spread that members of Intel's PR and marketing groups, perhaps even Andy Grove himself, were suffering from a recurrent dream, a terrible nightmare that some began calling "The Dark Bunny Dream of Andy Grove." They described it like this:

In the dream I am always Andy Grove, and the dream always begins the same way. I am looking at a typical American town on a typical American day. The yellow sun shines brightly in a royal blue sky spread over a sea of prim tract houses of varying tasteful hues, each placed with geometrical precision in the center of a perfect green lawn. A neat, white picket fence surrounds every home, and each garage holds two cars, at least one being a sensible and reliable Japanese import. (Yes, we're all Americans here, but we need to make sure we get to work on time every day!)

In each perfect house is a perfect PC, all of which have Intel inside. This is a good thing because . . . Intel had spent a lot of money to hire dancing Bunny People to say so . . . and because it costs a lot of money to hire . . . well, we already covered this. In any event, each perfect PC has become an integral part of each perfect family's productive and happy life. As the dream continues, I (Andy) realize I am floating above the home of Joe and Josephine America and their son, Joe America Jr. I have taken the form of a techno-ghost, an unseen spirit who can hear and see everything that is going on in the Americas' home. But today all is not well. I feel more than see the ominous dark cloud that appears on the horizon and rushes toward their snug little abode. Quickly, before the black billows can reach me, I sink through the roof of the home below me.

Once inside I see that, like everyone else on their block, the Americas have a PC with Intel inside. Dad comes home each night to use the PC to catch up on some office work and check sports scores across the nation. Mom uses the PC to store recipes and manage her family's busy social calendar. Junior uses the PC to help him in his schoolwork as he prepares to become the sensitive and caring yet assertive and forceful high-wage earner his parents know he can be.

As I drift through the Americas' home I pass by the kitchen and see a woman sitting at the table of a dinette set with her head in her hands, shoulders shaking from the silent sobs that rack her body. It is Josephine America. On a table beside her is a letter she has just opened. What news can it contain to cause her such grief?

At the same time, I hear the wheels of Joe America's Honda crunch on the gravel driveway, then the slam of the car door and the sound of Joe's footsteps proceeding to the front entrance. When Joe returns home from work he normally comes bounding into the house to greet Josephine with a hug and a kiss, but today he hesitates to enter, his hand frozen on the doorknob as some unseen force, some unknown instinct, warns him that something is wrong. Very wrong. Inside, Josephine has heard him. Gathering up the letter, she steels herself for the ordeal ahead. The next few minutes will be hard, terribly hard, but she must be strong. For him. (Outside the home the day darkens as thunderclouds build rapidly above the Americas' home.)

Gathering up his nerve, Joe turns the knob and enters his house to see a grave-looking Josephine facing him, holding the letter by her side. Neither says a word for several seconds. In the stillness, the distance between them seems to stretch like Turkish taffy. Finally, Joe breaks the silence.

Joe: (Quietly) Hello, Josephine. What is it? Josephine: Hi, Joe. We need to talk.

Joe: (Again, quietly) I can see that. (Long pause.) What's the problem? What's wrong? I assume it has something to do with that letter?

Josephine: Yes, Joe, it does.

Joe: What does it say, Josephine? Are you ill? Has someone died?

Josephine: No, Joe. It's about Joe Junior.

Joe: Joe Junior? What's wrong, Josephine? Has he been hurt? Is he ill?

Joe: Then what is it, Josephine? For God's sake, tell me.

Josephine: (Hands Joe the letter.) Joe Junior can't count, Joe. This report from school says he has the mathematical abilities of algae. A potato can multiply better than Joe Junior. The only thing Joe Junior can subtract is food from our refrigerator. His teacher feels that to allow him to add his genes to the pool would be a crime against computation. (Thunder crashes outside the Americas' home as the storm begins.)

Joe: (Hoarsely) My God, Josephine! How could this have happened? Who is responsible?

Josephine: It's the computer, Joe. It can't count.

Joe: You mean, our state-of-the-art PC with Intel inside? The computer that Joe Junior uses to do his homework and spends all his spare time playing Alien Invasion on? That computer?

Josephine: Yes, Joe. It's the Pentium inside the computer. It can't count. It's in all the newspapers. On TV. Everyone's talking about it. It has made our boy dumber than DOS.

Joe: My God. My God. I can't. . . quite . . . comprehend this. Not yet. That boy had all the talent in the world. I always knew Joe Junior was destined for greater things, bigger things than I could ever aspire to. He was going to graduate from an Ivy League school. Get his graduate degree, maybe an MBA. I hear there's something big coming along, something called the Internet. All the guys at work are talking about it. They say it's huge, really huge. They say it's going to change everything, that one day we'll all be buying toys, groceries, furniture, even pet food on the Internet. I thought Joe Junior might be part of that—get rich, retire young, buy us a retirement home in Florida, make the old man proud.

But none of that is going to happen now. What can a boy who can't count aspire to? A life in middle management at Taco Bell overseeing the chalupa and chimichangas stations? A permanent spot in french fry preparation at McDonald's? A job as an apparel folding and hanger specialist at The Gap?

(Joe walks over to the living room couch, sinks down in despair, and buries his head in his hands, a broken man. Josephine sits next to him and puts her arm around his shoulders. They are silent for a minute. Suddenly Joe sits up, resolve stiffening his spine.)

Joe: Well, we're not going to sit here like the other sheep and take it, Josephine. Not the Americas! Those callous, cold-hearted corporate bastards, putting the almighty buck over our son's opportunity to be one of America's top one-percent wage earners! They're not going to get away with selling us a computer that can't count! They're not going to get away with destroying our son's future! I tell you, Josephine, we're going to get justice. We're going to fight for what's right! We're going to sue!

And I wake up screaming.

Joe and Josephine were as good as their word, and several class action lawsuits were filed against Intel. At this point, someone at the company finally yanked the IPU (idiot processing unit) out of the company's PR and marketing machine, and Intel capitulated. It agreed to replace its faulty Pentium unconditionally to anyone who asked and announced that the flawed chips5 were heading to the landfill. By the time it was all over, the whole mess ended up costing Intel about $500 million.

The Bunnies Hop to It

It didn't have to happen this way. But Intel had embarked on a corporate branding program aimed at consumers without understanding the ramifications of its actions. The company had spent millions of dollars promising people that having an Intel inside their computers would make their machines, and by extension their lives, better. Once publicity and perception had compromised this promise, it was incumbent upon Intel to react immediately to redeem itself. Taking refuge in technical minutiae and engineering doublespeak wasn't an option. Instead, Intel had to chart a course of

• groveling mixed with effusive apologies;

• immediate promises to make it all better;

• the ritual execution of several middle managers, if necessary; and

• if absolutely necessary, the ritual execution of several selected members of upper management, up to and including the CEO (think Enron).

Intel could have saved itself tens, perhaps hundreds, of millions of dollars if the company had immediately offered to replace any "defective" chip, no questions asked. Far fewer people than the number who actually did ask for new chips would have bothered, but the hysteria whipped up by the whole mess roiled the market and raised awareness and concern over the issue.

5 Well, most of them. For a while there was a lively gray market for cheap "defective" Pentiums.

Still, when it was all over, Intel seemed to recover rather nicely from the whole fiasco. In 1994, people were buying PCs like there was no tomorrow, and Intel had the millions available to learn its lesson. These days, the company's website brags that

Today, the Intel Inside Program is one of the world's largest cooperative marketing programs, supported by some 1,000 PC makers who are licensed to use the Intel Inside logos. Since the program's inception in 1991, well over $7 billion has been invested by Intel and computer manufacturers in advertising that carried the Intel Inside logos. This has created an estimated 500 billion impressions, while building Intel's worldwide name. Today the Intel brand is one of the top ten known-brands in the world, in a class with Coke, Disney and McDonalds, according to various rankings.

It's hard to argue with success like that! And, after all, though bunnies know how to multiply, whoever said they could count?

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