Intel Russia

Intel began working in Russia in 1991.

Performance indicators

2023: Revenue of Russian Intel companies - 0 rubles

In 2023, the revenue of Russian companies from the Intel group - Intel A/O and Intel Technologies - amounted to 0 rubles. Net losses of the first company decreased by 92.1% (to 192 million rubles), the second - by 96.7% (to 20.8 million rubles). At the same time, the revenue of the entire Intel corporation at the end of 2023 amounted to $54.2 billion (-14% by 2022), net profit - $1.7 billion (a decrease of 5 times).

2022: Loss of 630 million rubles

The net loss of the Russian subsidiary Intel in 2022 reached 630 million rubles, while a year earlier the company received a net profit of 38.5 million rubles. Such data provided by the Federal Tax Service (FTS) of the Russian Federation were released in early May 2023.

As Kommersant writes with reference to these materials, in 2022, Intel's loss from sales in Russia amounted to 423 million rubles with a profit of 74 million for the previous reporting year. The revenue of the Russian legal entity Intel in 2022 decreased to 331 million rubles after 1.28 billion rubles of sales in 2021. The company's commercial expenses for 2021-2022 were not disclosed.

Intel Office in Nizhny Novgorod

At the end of 2022, Intel's combined revenue in Russia decreased by 13.6% to 6,052 million rubles. The indicator includes the total revenues of Intel Technologies LLC and Intel A/O from the financial statements for 2021-2022, excluding VAT. In the ranking "TAdviser100: The largest IT companies in Russia 2023," such an indicator allowed the company to take 82nd place.

In April 2022, Intel suspended its activities in Russia. Then the Intel website stopped working for all users from the Russian Federation. Drivers or documentation could not be downloaded. There was a stoppage everywhere about stopping work, and to download the information, you had to use a VPN. The portal ark.intel.com worked normally, but from it many links led to the plug.

In early September 2022, a Russian team of developers and engineers of several dozen people, who were engaged in the development of emulators for new processors and the creation of special software for smart network cards SmartNIC in the Nizhny Novgorod office of Intel, fully switched to Cloud (formerly SberCloud). In August 2022, Intel planned to take 500 employees of its Nizhny Novgorod office to Germany.^[1]

2021: Revenue growth in Russia by 29.1% to RUB 7,001 mln

At the end of 2021, Intel's revenue in Russia amounted to 7,001 million rubles, an increase of 29.1% compared to 2020, which allowed it to take 77th place in the ranking of TAdviser100: The largest IT companies in Russia 2022. Total revenues of Intel Technologies LLC and Intel A/O JSC from the accounting statements for 2020-2021 are indicated. Excluding VAT.

Development in Russia

A separate article is devoted to research and development conducted by Intel in Russia:

• Intel R&D Centers in Russia

History

2024: Sale of the largest office in Russia

Intel sold its largest office in Russia. This is stated in the reporting of one of the Russian legal entities of the American corporation published in early April 2024.

According to TASS, citing materials from Intel's subsidiary in Russia, the company's Nizhny Novgorod office (building and land plots) was sold, the deal was closed in January 2024. The buyer of the assets was not disclosed. According to an informed source of the agency, Intel has long been looking for a buyer of its real estate in Nizhny Novgorod. The interlocutor also did not name the buyer. The value of the deal is also not announced.

Unsplash

By the beginning of 2024, two people worked in the Russian division of Intel, which includes two legal entities - Intel A/O and Intel Technologies. Previously, the corporation had 1.2 thousand employees in Russia.

In Nizhny Novgorod, Intel had a hub for research and development in Russia. It also included divisions for the development of cross-platform software and artificial intelligence technologies. However, all work in the office was stopped in April 2022.

Intel A/O was involved in information processing, software development and testing, as well as providing rental services, Intel Technologies provided marketing services, technical support and consulting to Intel product users.^[2]

2023

Intel and Apple stopped buying Russian metals

In early August 2023, it became known that American manufacturers of electronics and computer equipment are gradually abandoning Russian metals. This is primarily due to the current geopolitical situation.

According to the Kommersant newspaper, Intel Corporation refused to import tungsten, tantalum and gold from Russian factories. In addition, Apple stopped exporting metals from the Russian Federation. At the same time, Alphabet (the parent structure of Google) and Microsoft continue to receive Russian metals. In particular, Microsoft uses this raw material in the production of Xbox game consoles, tablets and Surface laptops, and Google in the manufacture of Pixel smartphones.

Intel and Apple abandoned metals from Russia

Most likely, over time, Google and Microsoft will join Intel and also announce that they are switching to alternative sources of supply due to the threat of fines from the US government, "said Oleg Emeralrudov, executive director of the Consortium of Russian Storage Systems Developers.

As of the beginning of August 2023, American companies have an embargo on the purchase of tantalum and its alloys in the DPRK, China, Russia and Iran. Violators of the law face penalties. But American companies continue to buy Russian raw materials through third countries, as Russia is among the top three exporters of tungsten, tantalum and gold for electronics.

On the one hand, market participants say, due to the complication of import schemes for Russian metals, the cost of electronic devices may increase by 10% or more. On the other hand, Sergei Grishunin, managing director of the service of the National Rating Agency, believes that for metals used in electronics, the purchase price is not critical, since the consumption of microcircuits is small.^[3]

Russians opened access to downloading licensed software almost a year after its closure

Intel opened access to Russians to download licensed software almost a year after its closure, which became known on January 11, 2023. The software page on the official website of the American corporation is downloaded again without a VPN, you can install drivers for any Intel product. The Izvestia newspaper was the first to draw attention to this.

Licensed Intel software is available again in Russia

Her journalist managed to download drivers from several PCs at once. In particular, an application is available for download designed to automatically update software for company processors in Windows 7 and later versions of Microsoft operating systems.

The head of Digital Consulting Solutions, Alexander Skomorokhin, suggested that the unlocking was due to the fact that both Russian citizens and companies and offices of foreign companies operating in Russia were subject to restrictions. Thus, the restriction of access prevented Intel from fulfilling its commercial obligations towards them.

In the absence of the ability to download software from the official Intel website, users were forced to search for it on other portals, such as torrent trackers or specialized forums.

Resuming access to the official site and opening up the ability to download drivers will make life much easier for users who previously did not want to purchase the company's products due to the difficulty in servicing it, said Telecom DailyDenis Kuskov, CEO. However, in relation to the Russian Federation and Belarus, by January 11, 2023, there are still restrictions on the supply of components.

According to Kuskov, if official deliveries of the company resume, it will be quite easy to return to their previous positions. So far, domestic chip developers are not ready to compete with American products, he added.^[4]

2022

Reuters: Since April 1, Intel processors worth $0.5 billion have been imported to Russia

On December 13, 2022, Reuters published a detailed article stating that despite sanctions restrictions and the current geopolitical situation, products from American microchip manufacturers continue to be supplied to Russia. We are talking, in particular, about AMD and Intel processors.

It is reported that chips are imported into the territory RUSSIAN FEDERATION through alternative channels, including through, and Turkey. Estonia Hong Kong For example, in March 2022, Azu International was registered in Turkey as - wholesale supplier IT products. It is alleged that in seven months this company shipped a significant number of various microchips to Russia - a total value of at least $20 million.

Reuters: Since April 1, Intel processors worth $0.5 billion have been imported to Russia

At the same time, the Estonian company Elmec Trade Ou, based in Tallinn, sent goods worth at least $17 million to Russia from April 1 to October 31, 2022. Such suppliers also include the Hong Kong firm Pixel Devices and a number of other companies allegedly associated with Russian businessmen.

In total, according to Reuters estimates, during the seven months ended October 31, 2022, computer and other electronic components worth at least $2.6 billion were shipped to the Russian Federation, bypassing restrictions. Of these, approximately $457 million came from Intel products. In addition, the list of manufacturers whose chips are supplied to Russia bypassing sanctions includes American Texas Instruments and, Analog Devices as well. the German Infineon

Intel processor shipments to Russia after the company announced it would wind down its Russian business, Reuters data show

A joint investigation by Reuters and the Royal Joint Institute for Defense Research (RUSI), based in London, details the global supply chain that continues to supply Western computer components and other products to Russia, despite the US ban. This is said to involve a large number of little-known firms.^[5]

Change of Intel CEO in Russia to Oleg Abashev

At the end of November 2022, it became known about the change of the general director of the Russian representative office of Intel. He was appointed Oleg Abashev, who replaced Natalia Galyan. This is evidenced by the data of the Unified State Register of Legal Entities (USRUL). Read more here.

Complete suspension of all business transactions in Russia

As it became known on April 6, 2022, Intel decided to completely suspend all its business operations in Russia due to the situation in Ukraine. She announced this in a statement on her website, which she also closed from the Russians. Moreover, this is the second time Intel has blocked Russian residents from accessing its website. This first happened at the end of February 2022.

At the beginning of April 2022, according to Intel, a total of about 1,200 people worked in its Russian offices and development and research centers in Moscow and Nizhny Novgorod.

The version of Intel's statement to foreign users also states that the company will continue to support all its employees in Russia.

"We are working to support all of our employees in this difficult situation, including 1,200 of our employees in Russia. We have also implemented business continuity measures to minimize disruption to our global operations, "the statement said[6]

Suspension of processor supplies to Russia

On February 27, 2022, it became known that the supply of Intel and AMD processors to the Russian market was stopped. This can lead to a shortage of servers in the country, as well as an increase in their cost.

According to RBC, both companies orally warned Russian manufacturers that the company's products would temporarily not be supplied to the territory of the Russian Federation. The interlocutor of the publication noted that Chinese partners were also notified about this - information about the ban on the supply of processors to Russia was brought to them by the local Intel office. A representative of the Association of Russian Developers and Electronics Manufacturers (ARPE) also confirmed the information on the suspension of processor supplies from these manufacturers.

AMD and Intel have suspended the supply of processors to Russia

Intel itself gave the publication only the following comment:

The company closely monitors the situation and ensures compliance with applicable sanctions and export control rules, including new sanctions imposed by OFAC and rules issued by BIS [the industry and security bureau under the US Department of Commerce, which is the regulator of export control - note RBC].

The publication notes that Intel and AMD are the world's largest chip manufacturers, and the products of these companies, among other things, are used in Russia in supercomputers Sberbank, Moscow State University, Yandex and MTS.

As the director of the Institute for the Development of Digital Economics of the Financial University under the Government of the Russian Federation Boris Slavin noted in a conversation with Izvestia, it will be very difficult to replace processors. Despite the fact that Russia has its own processors, they are less productive. However, the main problem is that the number of domestic processors is small.

According to a RBC source on the market, despite the fact that some manufacturers of foreign computer equipment say that the ban should not apply to the supply of assembled computers, they may subsequently reconsider their position, since "there are sanctions components inside these computers that are not subject to re-export."^[7]

Site blocking in Russia

On February 25, 2022, Intel blocked access to its website in Russia. We are talking about both the Russian version (intel.ru) and the global (intel.com).

When you try to open them, users are told "You do not have permission to access this server." You can visit Intel sites in Russia using VPN. The TAdviser journalist was convinced of this.

Intel blocked access to its website in Russia

The sites of another major manufacturer of AMD processors in Russia are available. The Russian site Nvidia also works as usual.

By February 25, 2022, it is not reported whether the blocking of Intel sites in Russia is associated with sanctions against the country. On February 24, 2022, the US Department of Commerce announced that it was tightening export rules to the Russian Federation for microelectronics, telecommunications equipment, sensors, navigation equipment, avionics, marine equipment and components for aircraft. The US authorities intend to set out the details of the scope of the restrictions in the relevant regulatory act on February 25, 2022.

RBC recalls that in Russia, in addition to personal computers, Intel processors are used, for example, in Christofari supercomputers from Sberbank and Lomonosov-2 from Moscow State University - both use a server processor from Intel Xeon Platinum.

According to Kommersant, the Ministry of Industry and Trade, the Ministry of Digital Development and domestic electronics manufacturers have repeatedly held meetings on various scenarios of technological sanctions. According to a source close to the Ministry of Industry and Trade, options for diversifying supply chains and organizing logistics are being discussed, which will allow importing both components for the production of electronics and foreign chips into the Russian Federation.

According to an Interfax source, if Intel leaves the Russian market, most likely, "gray" processor supplies will be established through India, China or Belarus.^[8]

2020

Revenue in Russia - 5,424 million rubles

At the end of 2020, Intel's revenue in Russia amounted to 5,424 million rubles.

Memorandum with the Government of the Nizhny Novgorod Region and NNSU on the development of the technological potential of the region

On March 5, 2020, it became known that the Governor of the Nizhny Novgorod Region Gleb Nikitin, Vice President of Intel Corporation Bill Sevidzh and Acting Rector of the National Research Nizhny Novgorod State University named after N.I. Lobachevsky Elena Zagainova signed a memorandum, which is designed to unite the efforts of the three parties to develop the technological potential of the region. Read more here.

Intel has changed the strategy and partner program in Russia

In February 2020, Intel Regional Director in Russia Natalya Galyan told TAdviser how the company works in the context of a new strategy and the essence of the updated partner program, which was previously presented in the world and in the local market.

From iron supplier to datacentric company

Russia is one of the key countries for Intel both in terms of business development and in terms of R&D development, Galyan said in a conversation with TAdviser. In this market, as globally, Intel is implementing a strategy to transform into a datacentric company. Vector of movement in this direction with a focus on solutions for data centers, 5G, clouds, the Internet of things, etc. Intel designated back in 2016, and in April 2019 presented the "first truly datacentric"^[9] product portfolio.

Globally, the business area of ​ ​ technologies for working with data, including servers, solid-state storage devices, non-volatile memory modules and solutions for the Internet of Things, at the end of 2019 amounted to about half of Intel's turnover.

The company does not disclose financial results in Russia either in absolute terms or in dynamics. According to the Kontur.Fokus database, the total income of two key Intel legal entities in Russia - Intel Technologies and Intel A/O - in 2018 amounted to about 5.4 billion rubles. But you need to understand that foreign vendors, as a rule, do not conduct all contracts through local legal entities, and their share varies among different companies. For 2019, the financial indicators of Intel legal entities in Russia as of February 2020 have not yet been published.

Intel's Russian business development strategy follows the global "(Photo - Justin Sullivan/Getty Images)"

Natalya Galyan says that in terms of dynamics, the situation in Russia for Intel is similar to the global one: in 2019, business related to storage and data transfer technologies showed growth in Russia, and it also accounts for a larger share of revenue.

The company sees the development of the data center segment and cloud services, AI technologies, the Internet of Things and 5G as growth points for itself. One of the drivers of these changes was the Digital Economy program, which stimulated the need to create infrastructure and, accordingly, the demand for solutions in the public sector and the large corporate sector, says Natalya Galyan. Intel actively participates in Digital Economy working groups and industry associations related to the Internet of Things, AI, 5G, as well as pilots and implementations in all these areas.

Wherever we have an examination, we are ready to share it, and if we are invited, we are ready to discuss it and help. The Ministry of Digital Development, the Ministry of Industry and Trade, for example, periodically invite me and representatives of other American and European companies to get an expert opinion on certain areas, - explains Natalya Galyan.

Speaking about its PC business in Russia, Intel cites data that in 2019 it showed positive dynamics in the corporate segment, and in the consumer sector, the year, on the contrary, was not very successful: there was a slight drop.

As for artificial intelligence and the Internet of things, in particular, here, noted the regional director of Intel in Russia, by and large, there are still more pilot projects. Many are interested in these technologies, many want to try them, notes Natalya Galyan. The direction of AI is developing in video analytics and video surveillance using Intel RealSense technology. For example, they can be used at ATMs to allow banking operations without a card using face recognition.

Natalya Galyan calls Intel's major application of solutions for the Internet of Things in Russia. In retail particular, they are used in platforms for. online cash desks In this area, Intel works with local manufacturers of solutions such as, for example,. "Atol"

At the same time, the company emphasizes, in the project of online cash desks, Intel solutions are also involved in the infrastructure necessary for storing, aggregating and processing data collected from cash desks. Intel calls this a good example of where a company is going: when a smart endpoint is not a separate object, but part of a datacentric ecosystem, and Intel solutions are present in all parts of this chain.

Updated Partner Program

At the end of 2019, Intel in the world and in Russia also launched an updated Intel Partner Alliance, which is unified for all countries. Its main feature is that if earlier the program was mainly aimed at partners in the PC market and computer assemblers, now the company intends to expand the circle of participants, attracting ecosystem partners from different areas. For example, in the direction of cloud technologies, the Internet of Things, artificial intelligence, high-performance computing.

To do this, Intel plans to attract integrators, software manufacturers, etc. With those integrators who are already partners of Intel, the company plans to move from cooperation in the field of creating "iron" solutions to a wider range of areas, Natalya Galyan explained. The overall focus on expansion is on Intel's global business strategy to diversify the company's business.

A lot of emphasis in the updated program is on education. To do this, partners will be provided with opportunities based on Intel University, training, etc.

In Russia, as of the beginning of 2020, the company has about 2 thousand registered partners with whom it cooperates in the field of equipment production, TAdviser cited data from Intel. The company expects that due to the updated program, the total number of partners in Russia will increase.

Participation in import substitution

Speaking about how the sanctions policy affects Intel's work as an American company in Russia, Natalya Galyan noted that the company has been working in these conditions for five years.

We conduct business in accordance with the law: if we cannot work with any groups of partners, we do not work with them. During all this time, we have already established work in new conditions, and now it cannot be said that we see some kind of negative effect from sanctions for ourselves, says Galyan.

At the same time, the regional director of Intel in Russia notes, the company notes a trend for import substitution. In this case, state policy encourages local manufacturers to engage in both the development and production of solutions in Russia.

We also participate in this process, work with Russian companies, share world practices, participate and help them develop, for example, server and desktop boards for Intel processors. Russia has traditionally been strong with local OEM manufacturers. The difference between Russia and European countries is that local manufacturers here occupy a rather significant share in the market, and it does not decrease. Now there is even more local assembly, although so far this is not some dramatic growth, "says Natalya Galyan.

New General Director for Research and Development in Russia - Ivan Kuzmin

In January 2020, Intel announced the appointment of Ivan Kuzmin to the post of general director for research and development in Russia instead of Marina Alekseeva, who was leaving the company. Read more here.

2019: Revenue growth by 5% to RUB 4.9 billion

At the end of 2019, the company Intel Russia took 32nd place in. Ranking TAdviser: 50 most profitable representative offices of foreign IT companies in Russia The company's revenue for 2019 amounted to 4,923,419 thousand rubles, which is 5% higher than in 2018. This indicator includes the revenue of legal entities of Intel Technologies LLC and Intel A/O JSC.

2018

Revenue - 4.68 billion rubles.

Revenue Intel Russia (Intel Technologies LLC and Intel A/O JSC) for 2018 amounted to RUB 4,681,519 thousand.

=Daria Kiryanova appointed CEO of Intel Technologies and Intel A/O

In December 2018, Daria Kiryanova, Chief Operating Officer of Intel Corporation in Russia and Scandinavia, was also appointed CEO of Intel Technologies LLC and Intel A/O JSC. Daria will retain her previous responsibilities and continue to manage Intel's operations in Russia and Scandinavia.

2016: Intel has a new regional director in Russia - Natalia Galyan

In October 2016, Natalya Galyan was appointed to the post of regional director of Intel in Russia. In the area of ​ ​ its responsibility is the general management of the company's representative offices in Russia and other CIS countries. In this position, she replaced Dmitry Konash, who decided to leave the company and switch to other projects that she planned to develop outside Intel.

2010: Trademark Protection

In September 2010, it became known that Intel Corporation had filed claims in court against three small Russian firms. Intellhands, Slavintel and the Innovative Business Club Intellcom were guilty of the fact that their names are too similar to the name of an overseas giant. Intel periodically "cleans clones" - both in Russia and in other countries of its presence. In our country, thousands of companies have a combination of the letters "intel" in their name. The American corporation is not at war with everyone, but only with those who had the imprudence to register their name as a trademark.

The head of the Internet provider Slavintel, a meeting in the Arbitration Court Moscow , is scheduled for September 21, Vyacheslav Bolshakov, two years ago received a voluminous claim from the law firm Baker & McKenzie, representing the interests of the IT giant. He made no concessions - and has not received any new information from Intel since. "We are representatives of small businesses engaged Internet in telephony. We have nothing in common with Intel except processors in our computers, "Bolshakov is indignant.

In the engineering office of Intellands LLC, a meeting in the Moscow Arbitration Court was also scheduled for October 26, they also received a demand to stop using their own trademark. The company is now negotiating a pre-trial settlement with Intel. According to the director of the company Aleksei Rimer, the draft agreement received by Intellands provides for a fine of 800 thousand rubles. for any use of the Intelhands trademark.

Natalya Zolotykh, Vice President of Opora Rossii and General Director of Innovative Business Club Intellcom OJSC (meetings on several cases in the Moscow Arbitration Court with the participation of the OJSC are scheduled for September-October 2010), said that Baker & McKenzie lawyers first approached her back in 2007, with similar requirements. Zolotykh then replied that she was open to offers, but Intel did not do such. In 2008, the conflict was considered in the Patent Disputes Chamber at Rospatent (PPS), where, according to Zolotykh, everyone remained with their own. Now the conflict will be considered by the Moscow Arbitration Court.

"This is an abuse of rights by Intel," says Zolotykh, who has the status of a patent attorney of the Russian Federation. - A significant number of Intelcom trademarks are registered in the United States, but the American Patent Chamber does not recognize them as similar to the degree of confusion. Intel is engaged in a show of strength. "

In Rospatent, the IT corporation most often manages to achieve its goal, explains a lawyer who is aware of the legal affairs of the Russian office of Intel. Sometimes everything ends with compensation of several thousand dollars in favor of a Russian company. But if Rospatent does not decide in favor of Intel, then the courts, as a rule, confirm the decision of this department. This happened, for example, with the namesake of the company Natalya Zolotykh, Moscow LLC Intellcom - this company managed to defend its name both in the PPS and in the Supreme Arbitration Court.

In Russia, thousands of companies have the letter "intel" in the name. LLC, CJSC and ICH "Intel" alone in the SPARK database is one and a half hundred. But the vast majority of these companies face nothing: They have not registered their names as trademarks. In Russia, it is difficult to make a claim about a similar corporate name - "it is like fighting windmills." The specialists hired by Intel monitor the trademarks of companies operating in areas related to the field of interests of Intel Corporation.

They have been doing this for a long time. Russian "intels" received outraged letters from an American company back in the early 2000s. In 2008, the conflict affected a large company - the telecommunications operator Sovintel. But this one hundred percent "daughter" "VimpelCom" during the reorganization of the holding ceased to exist independently. Representatives of VimpelCom did not attend the PPP meetings. According to the information from the PPS database and the trademarks "SCS Sovintel" and Sovintel were canceled at the request of Intel due to non-use.

2009: Import of equipment with encryption elements required for software development into Russia

American Intel threatened to dismiss some of the employees of the Russian R&D center due to problems with the import of microchips containing encryption elements into Russia, follows from^[10] published by Wikileaks^[11]. And she got her way.

The largest global manufacturer of Intel processors managed to bypass the rules for importing equipment into the country with encryption elements necessary for software development, follows from the text of the dispatch of the American Embassy in Moscow, published on the Wikileaks website. This happened in the fall of 2009 due to personal contacts of Intel management with Russian leaders and special services. In particular, the ex-chairman of the board of directors of Intel Craig Barrett, who now holds the post of co-head of the Skolkovo Foundation, together with the head of the American Chamber of Commerce in Russia Andrew Sommers discussed this issue with President Dmitry Medvedev. According to Wikileaks, Intel representatives made it clear to Russian officials that the company is ready to fire at least 200 employees of the Russian R&D Intel center (a total of 1000 people work there) and transfer software development from Russia to India and China. Intel management really discussed these problems with officials and competent authorities, Dmitry Konash, head of the Russian office of Intel, confirmed to Vedomosti. He does not know about the content of these negotiations, but he considers the argument about staff reductions quite logical - if there is no necessary equipment, a significant part of the employees of the R&D center simply have nothing to work on.

The problem arose in 2009, when Intel began to actively include encryption modules in its processors, explains Konash. And the new norms of the Customs Union, in force since 2010, provide for the notification of government agencies on the supply of equipment with encryption modules, says Maxim Emm, director of the audit department of Informzaschita. As a result, it turned out that almost all the equipment with encryption was in the gray zone, entire batches stood on the border. Intel competitor AMD sent confirmation to Russian partners about the lack of encryption in processors, says Alexander Belenkyi, head of its representative office in Russia and the CIS. And Acer simply did not import computers containing encryption modules, says Gleb Mishin, head of Acer's Russian office.

Intel solved the problem. During the negotiations, it turned out that the current norms can be interpreted "widely," says Konash, for example, finished products fall under the restriction, but not the components that Intel produces. According to him, as a result, the FSB issued special instructions for customs on how to import such equipment within the framework of the law.

2002: Break with "Formosa"

In 2002, the Russian computer manufacturer Formosa came into conflict with Intel, which at that time ruled the market supreme, with about 85% of computers in Russia equipped with its processors. This popularity is a consequence of powerful marketing support: the company, unlike its competitors (AMD, for example), spends millions of dollars annually on its own advertising. In addition, Intel has a Partner Advertising Sponsorship Program. Its essence is as follows. When selling processors to Russian collectors, Intel transfers up to 6% of the contract value to the marketing fund. After that, the collector can reimburse up to 80% of the cost of promoting his own products from the fund. If the advertising strip in the magazine costs, say, $10,000, then the computer manufacturer will only have to pay $2,000, the fund will contribute the rest. A prerequisite is that the Intel Inside logo must appear in your computer ads.

For all its effectiveness, this program opened up opportunities for petty fraud - for example, a computer manufacturer could informally agree with the publication on significant discounts on advertising, and Intel, without guessing anything, spent the fund's money to the maximum, based on the price list. The participants in the non-advertised transaction could share additional income among themselves.

Formosa has been a member of the Intel Inside program since 1995 and was, according to Alexei Navolokin, who led the Russian office of Intel in 2000-2003, one of the ten largest partners. But in May 2002, she was unexpectedly removed from the lucky list. In addition, she lost the opportunity to buy processors on privileged terms - at partner, reduced prices.

Read more here.

Notes