Dec. 30 (Bloomberg) -- Intel Corp., whose marketing made its computer chips a household name, is changing its logo for the first time in 37 years to help promote its push beyond personal computers.

The dropped ``e'' in Intel will be shed in favor of a swoop around the company's name with the tag line ``Leap Ahead.'' The ``Intel Inside'' phrase, a fixture since 1991, will be dropped, Santa Clara, California-based Intel said yesterday.

Intel's image change, to coincide with next week's Consumer Electronics Show in Las Vegas, is part of an effort by new Chief Executive Officer Paul Otellini to expand Intel into home entertainment. The company, whose processors run more than 80 percent of personal computers, is trying to gain a foothold in the consumer market to counter slowing growth in PC chips.

```Intel Inside' is one of the great ones, one of the most brilliant marketing strategies in the last 10 years,'' said Peter Sealey, former head of marketing for Coca-Cola Co. who now runs Los Altos Group, a California-based management consultant. ``Now they achieved awareness, it's over and they need to move on.''

Intel shares, up 6.7 percent this year, fell 11 cents to $24.96 at 4 p.m. New York time in Nasdaq Stock Market composite trading.

The change in Intel's brand is the first step in a $2.5 billion marketing campaign, BusinessWeek reported earlier, without making clear where it got the information. Intel spokesman Bill Calder declined to comment on the number.

Intel also plans to introduce a new chip, which will be called ``Core,'' to complement its Centrino laptop and Viiv home entertainment components.

After averaging growth of more than 13 percent for three years, Intel is expected to increase sales 8 percent next year to about $42.3 billion, according to analysts' estimates.

Outside Intel

Intel marketing chief Eric Kim, hired in September 2004 from Samsung Electronics Co., outlined a plan to dump ``Intel Inside'' at an Oct. 20 meeting of company executives, Calder said.

Kim, Intel's first chief marketing officer, was brought in by Otellini, 55, to oversee the creation of a new image and catch phrase. He is credited with helping Samsung transform its image from that of a maker of cheap household appliances to having a brand more valuable than Sony Corp.'s.

McCann Worldgroup, a unit of Interpublic Group of Cos., was picked by Intel in March to run a global advertising campaign promoting the Viiv chips for home entertainment devices. Havas SA had handled Intel's advertising business.

``Intel has been struggling to find a way out of PCs for the last six or seven years,'' said Eric Ross, an analyst at ThinkEquity Partners in New York, who rates the stock ``buy'' and doesn't own it. ``I never dreamed they'd drop `Intel Inside.' Their marketing has been exceptionally successful.''

Broader Changes

The new logo reflects broader changes inside Intel. Otellini, who took over from Craig Barrett in May, is the first company leader without a background in science or engineering.

In January, Otellini began Intel's largest reorganization since its founding in 1968. He created business divisions, including one called digital home, based on the uses of Intel chips, and said he is making the company ``outward facing'' rather than focused on producing faster semiconductors.

``Otellini isn't a technologist,'' Ross said. ``He has more of a marketing and sales background. He's attacking the problem from a different angle. A good brand in consumer electronics can double your margins, even with the same components. That's something Sony did for years.''

Living Rooms

Central to Otellini's plan for Intel's future growth is getting the PC into the living room to replace digital video recorders, videocassette recorders, satellite set-top boxes and other home entertainment products.

The first step came with the announcement of the `Viiv'' chips and platform in August. The chips and label will go with home PCs that let users download music and films to be played and shown on home audio systems and televisions. Otellini is expected to unveil new products next week at the Las Vegas convention.

The Viiv label, like Pentium and ``Intel Inside'' before it, will show up on computers made by Intel customers including Dell Inc. and Hewlett-Packard Co., the world's two largest PC makers. Intel will continue to foot some costs for computer makers that display and advertise the labels and logo, Intel's Calder said.

``Intel Inside'' was used to persuade consumers and businesses that the processor inside a computer was more important than the brand name on the outside.

That helped make Intel's brand worth $35.6 billion in 2005, or No. 5 in the annual survey by London-based market researcher Interbrand Corp. General Electric Co., International Business Machines Corp., Microsoft Corp. and Coca-Cola are the top four.

Intel's marketing was ready for a shakeup, said Doug Freedman, an analyst at American Technology Research in San Francisco.

``That they're going to focus on `Leap Ahead' makes me think about the technology,'' said Freedman. ``Not, `buy me because I'm inside,' but `buy me because I'm doing something unique.'''

To contact the reporter on this story: Ian King in San Francisco at ianking@bloomberg.net

Last Updated: December 30, 2005 16:25 EST