Intel audits UAE assemblers

Intel’s EMEA auditing team has been in Dubai this week to examine the processor integration rates of various assemblers belonging to its Intel Inside programme. The UAE is the second Middle East market to come under close scrutiny from Intel’s bean counters in the last five months following an earlier review of system builders in the Egyptian market.

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By  Andrew Seymour Published  December 14, 2006

Intel’s EMEA auditing team has been in Dubai this week to examine the processor integration rates of various assemblers belonging to its Intel Inside programme. The UAE is the second Middle East market to come under close scrutiny from Intel’s bean counters in the last five months following an earlier review of system builders in the Egyptian market. It is not clear how many UAE assemblers Intel plans to visit during its stay in Dubai. Reliable channel sources claim that Uniexcel and FDC are two companies that have complied with the requests of the auditing team throughout the past week. Sources in the market claim the CPU vendor originally intended to carry out more audits in Dubai than it has done so far. However, at least four assemblers are believed to have forfeited their Intel Inside status by notifying Intel several weeks ago that they would not be participating in the audit. Intel has refused our request to interview members of the EMEA auditing team, instead referring us back to the same statement it issued after examining assembly partners in Egypt. It read: “Intel conducts regular audits of all Intel Inside Program licensees as part of our normal business procedure. These audits are routine and part of the terms and conditions of the program.” The statement, which is attributed to Rola Zaarour, communications manager at Intel Middle East Turkey and Africa, continued: “The Intel Inside Program is one of the world's largest branding and cooperative marketing programs. Intel and its customers have invested billions of dollars in the program to create a recognisable mark of quality, and, as such, inherent value for our customers. The company has an obligation to both customers and shareholders to protect that investment.” Intel first told UAE assemblers about its plans to perform physical audits towards the end of October. In correspondence seen by Channel Middle East, the vendor informed partners that it aimed to “validate the accuracy of the current processor integration and to ensure advertisements and claims are in compliance with the terms and conditions” of its channel programme. It instructed PC assemblers to prepare for the visit of its auditing team by compiling a broad range of company records, including manufacturing details, sales invoices and purchase records, as well as arranging private workspace for up to five auditors for the onsite visit. Intel warned assemblers that anybody found overstating their integration rates or failing to comply with the audit could face a range of punishments, including suspension from the scheme and the recovery of prior marketing payments. One Dubai PC builder suggests the audits could help to protect partners that legitimately meet their CPU integration target because by revealing which partners purchase excess inventory to resell into the market. “We are not part of the audit and in my opinion it is because we are a reasonably good partner and what we do with Intel in the market is openly visible,” said the source. “I expect Intel is dealing with the trading-oriented companies that buy in bulk quantities and claim so many things even though they are basically not really PC assemblers.” Another Intel-based assembler on Computer Street, who has not been selected for auditing, said it was relieved that it would not be receiving a visit from Intel. “They aren’t doing an audit on us and we weren’t one of the people who received their e-mail. That is one less headache for us because we know that they have asked for a lot of information and documentation. It’s a fast paced business and many times you order things, it goes in the free zone, it leaves from the free zone, and some documentation is not in your office, but somewhere else.” He added: “I really have no idea why we were exempt. Maybe it is because we are have been in this programme a long time or because our numbers are less than others; we don’t really have big numbers. We didn’t take a lot of the ECAP that they used to do either. It could be any of these reasons.”

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