Intel responds…at last

Intel’s wall of silence regarding its role in the creation of the credit crisis engulfing the Dubai-based channel has finally cracked. The vendor giant has, in its own gracious words, ‘decided to make an exception to its normal practice of not commenting on this type of speculation, to ensure that its position on the subject is made clearer’.

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By  Stuart Wilson Published  June 15, 2006

Intel’s wall of silence regarding its role in the creation of the credit crisis engulfing the Dubai-based channel has finally cracked. The vendor giant has, in its own gracious words, ‘decided to make an exception to its normal practice of not commenting on this type of speculation, to ensure that its position on the subject is made clearer’. Intel issued a written statement outlining its position regarding allegations from runaway resellers claiming that Intel’s channel policies had been responsible for their business debts and the financial collapse of several companies including Fortex-MID, Micron and MST. All of these players were operating as Intel sub-distributors and participated in Intel’s channel programmes. The statement, sent from Dania El Kadi, Intel’s marketing manager for the GCC, read: “These companies had been part of our regional channel for several years and we regret that they have run into financial problems. However, it is worthwhile noting that in the past these companies have not raised with any us concerns about any potential negative impact that they considered our programmes or activities would cause them.” Runaway reseller Micron had alleged that the non-payment of monies owed by Intel in relation to marketing, rebates and incentives, related to the vendor’s channel programme, was a significant contributing factor in its financial collapse. Intel’s statement focused almost entirely on this area but did not respond to many of the other allegations made by the runaway resellers including Intel’s excessive channel stuffing in recent months. The statement continued: “As it is our standard practice, all steps are taken to ensure timely payments of the amounts due to all of our customers. As is always the case receipt of these payments will depend on compliance with the terms and conditions of the relevant programme and on receiving appropriate evidence of documentation substantiating co-marketing, each recipient’s banking and financial situation, especially if any bank accounts are frozen.” “The same market players have been circulating a copy of their Intel Inside statements, claiming that Intel owes them this money. The amounts accrued through the Intel Inside programme are for the sole purpose of co-marketing, with a focus on above the line advertising. There are clear terms and conditions and guidelines governing the refund process. All payments are made strictly in accordance with these terms and conditions as soon as we have received the relevant documentation and ensured that the advertisements are compliant with the guidelines of the Intel Inside programme," read the statement. "When payments are not processed immediately upon receipt of the documentation, it is because we have either not received the correct supporting documentation or have found a gap in compliance with the guidelines, in which case the customer is informed of this gap. All members of the Intel Inside programme receive regular training on the guidelines and should be fully aware of the terms and conditions regulating this program. In no case should these co-marketing funds be regarded as a rebate or e-cap," the Intel statement continued. Senior executives from Intel EMEA will be in Dubai early next week according to the vendor’s local PR agency. While Intel’s statement has outlined its position on one of the contributing background factors behind the latest Dubai-based credit crisis, it fails to answer the vast bulk of the allegations made against the vendor and its overall channel policies in the wider Middle East region. The statement concluded: “Intel is committed to its channel in the UAE and the Middle East region in general. We have been here for over 12 years, where we have worked together with you to help develop our respective businesses and support the growth of the industry. We remain committed to this market and look forward to recording continued success with all of our channel members, just as we have been in the past years. Intel’s management has an open door policy and we are happy to hear any concerns that our channel members may have in regards to our programmes and activities.”

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