Brand Failures

Internet and new technology failures 245
86 Intel’s Pentium chip
Problem What problem
In 1997, a professor of mathematics found a glitch in Intel’s Pentium chip.
He discovered that the mathematical functions for the chip’s complicated
formula were not consistently accurate. The professor decided to send an
article about his findings to a small academic newsgroup. Word spread
through the university community and the editor of a trade title caught hold
of the story. The general press then reported the professor’s findings and
sought Intel’s response. Intel denied any major problem, declaring it would
only affect a ‘tiny percentage’ of customers. They failed to take responsibility
or replace the affected chips.
The issue grew online, as it became a key topic in an increasing number of
online discussion groups, which kept on feeding the offline media. Intel’s
share value dropped by over 20 points. It was only when IBM’s declaration
that it would not use Intel chips in its computers made the front page of the
New York Times that Intel went back on its previous position and agreed to
replace the chips. Even today, evidence can be found of how Intel’s poor
response to online criticism has affected its reputation on the Net. The ‘Intel
Secrets’ site at www.x86.org, which was set up at the time of the media’s
damning coverage of Intel’s unhealthy chip, still emphasizes the faults to be
found in various Intel products.