Intel Gets Start of Antitrust Backlash from OEMs

[enigma067]

Intel Gets Start of Antitrust Backlash from OEMs

By Erik Sherman | Jan 4, 2010

A recent announcement that Lenovo would use CPUs from AMD (AMD) in a couple of its ThinkPads rather than chips from Intel (INTC) is the beginning of the price the chip giant could end up paying for its alleged anticompetitive activities: OEM customers shifting their orders.

In two separate statements, Lenovo said that it would use AMD chips in the ThinkPad X1003e ultraportable as well as the 13-inch ThinkPad Edge series, which is aimed at small- to medium-sized businesses. This is the first time that the ThinkPad brand, originally owned by IBM, will have used non-Intel chips:

An ultraportable PC positioned between a notebook and a netbook, the ThinkPad X100e can be equipped with AMD’s Athlon Neo single-core and dual-core, as well as the Turion dual-core processors. The ThinkPad Edge model, the smallest of three offerings in this product family and targeted at small and midsize businesses, may be paired with dual-core AMD Turion and Athlon Neo processors. The 14-inch and 15-inch ThinkPad Edge versions will still be powered by Intel’s Core 2 Duo chips.

Before you say, “But those are the small systems,” remember that the smallest systems, like netbooks, are the ones whose sales are really growing. To put it differently, AMD may not be in the prestige machines, but they’re going into the ones that may get the greater volume sales.

Starting in mid-November, I began noting that the upshot of all the antitrust activity focused on Intel would be customer defections:

PC vendors get completely wary of being sucked into the investigatory void and start shifting a significant portion of their purchasing to AMD. Forget fines and forget legal fees. That’s going to be the real price tag for years of allegedly using money and influence to keep a competitor constrained, and it will be a number with a whole lot of zeros.

I think the Lenovo switch is the first sign of that real price tag. Who knows how large a card it will need to be to record all the potential long-term loss for short-term gain?

Image via stock.xchng user MeHere, site standard license.

http://industry.bnet.com/technology/10004584/intel-gets-start-of-antitrust-backlash-from-oems/

 

[theholylancer]

And AMD and nVidia both relied upon TSMC to fab their GPUs, so they were on a level playing field (unless there were some volume or other deals TSMC made with one party to the exclusion of the other). At the moment, Intel and GF are not at the same level - Intel has at least a year's lead over GF, familiarity with HKMG, and is basically leading the industry (e.g., their push to 450mm wafers).

AMD has already tried cutting prices, and I don't see any significant increase in marketshare.

And let's keep the discussion civil, by not referring to 80% of the CPU customers as "idiots", please. 😛 After all, Intel needs to fund their market-leading R&D efforts so that AMD can tag along while denying that they are doing so .

sadly when ur in university (or a while back when I was in HS and they taught us blind type while I was running a private proxy for bypassing firewalls) and is seeing these mandatory CS courses that is pushing the PC onto users without any technical content i can safely say that calling 80% of these people as idiots in terms of their hardware knowledge is justified.

 

[roofus]

No it wouldn't surprise me that it will perform better at graphics but what about cpu tasks? BTW, wasn't fusion suppose to of been out last year? When are they releasing it now?

CPU tasks it is a complete wash. AMD and Intel are fairly even there and trade punches depending on the application. I don't think they will release it until they are comfortable with performance, thermals, power consumption.

 

[fazers_on_stun]

Last I read Fab 36 or Fab 1 is the only one they have up and running. Fab38 is still in conversion to 300mm.

He's probably referring to the Chartered acquisition. IIRC Chartered was not competitive with TSMC so maybe useful for chipsets or 'glue' logic, but not GPUs or CPUs. I don't think they do SOI either for that matter.

 

[Guest]

There's one flaw in your argument - GF isn't going to be sitting around with tons of extra capacity waiting for orders from AMD to show up. They're going to be busy making chips for other customers too. The capacity they have to dedicate to AMD will be limited. That capacity may (and probably will) exceed today's, but there will always be limits.

Well intel have limits too. The more they get into other areas, the less capacity they have for desktops/servers for example. The only way around it is to build more fabs, which cost a lot of money.

It is most likely that AMD have both Fab 1 module 1 and Fab 2 to themselves, after all it was AMD who started the whole idea of Fab 2, what 4 years ago? Don't forget Global bought out Chartered and all their fabs too, that is where a lot of the new business will be going.

You mean Intel does not have the power to control pricing in the x86 CPU market?

There are limits. Nvidia controlled pricing in the gpu market for a long time but who controls it now? The truly amazing thing about that is, for 10 out of 12 months last year Nvidia had the fastest gpu available.

Being fastest doesn't make you money, especially when 'good enough' is becoming more apparent. Intel need a certain pricing structure to increase profits, AMD simply need to not lose money.

People switched from Nvidia to ATI because 5-10% slower at half the cost almost made too much sense to ignore. Why wouldn't that happen with cpu's?

 

[fazers_on_stun]

sadly when ur in university (or a while back when I was in HS and they taught us blind type while I was running a private proxy for bypassing firewalls) and is seeing these mandatory CS courses that is pushing the PC onto users without any technical content i can safely say that calling 80% of these people as idiots in terms of their hardware knowledge is justified.

My point was that just because 80% of the computer-buying public, buy an Intel CPU doesn't make them stupid. And why should a secretary or business professional have to know beans about computers? It's just a tool for them to do their job.

Should Joe 6-Pack have to get a Ph.D. in Electrical Engineering just so he can watch Dancing with the Stars on his TV? 😗

 

[Guest]

Also look at Bulldozer and Bobcat. AMD have never had anything remotely close to Bobcat and this thing must be tiny.

Bulldozer has given up floating point to Sandy Bridge while keeping the same integer prowess. What did it gain? It has to be smaller size, less transistors, heat etc.

If you assume that both intels and AMD's 32nm process is practically identical, the smaller chip should have higher clocks and/or overclock better right? That makes Bulldozer faster in integer ops while costing less to produce.

The benchmarks that show intel up so well? The huge majority of them are based on integer ops I'd bet. It's worth thinking about at least.

 

[Guest]

My point was that just because 80% of the computer-buying public, buy an Intel CPU doesn't make them stupid. And why should a secretary or business professional have to know beans about computers? It's just a tool for them to do their job.

Should Joe 6-Pack have to get a Ph.D. in Electrical Engineering just so he can watch Dancing with the Stars on his TV? 😗

I didn't actually say people who bought intel were idiots, I said intel have been selling to idiots. Maybe I just think most people are idiots?

Anyway if people know nothing about computers why would they buy the more expensive one? Unless they were idiots?

 

[roofus]

brand recognition.

 

[Guest]

brand recognition.

Perhaps you have a higher opinion of people who blindly buy brands than I do.

To me, a smart person would look in depth at everything when about to make a purchase (quite a substantial purchase for most people). They would then decide whether or not paying more for the intel was really worth it. You won't find many graphs showing intel cpu's beating AMD's on price performance, put it that way.

 

[JAYDEEJOHN]

Look to ATICs moeny being spent, as some has already, and distributing resources over capable needs seems to be what a higher customer count/usage of all thes fabs will work.
As for Intels lead, it appears to be disapated somewhat, and certainly TSMCs, as their 28nm is nowheres near it needs to be.
As for Intels push to 450mm, itll be a lonely and expensive place, since the majority is going to stay 300mm, and buying so few tools will cost them

 

[Guest]

ATIC didn't spend $4bn on Chartered as a sign of goodwill for sure. People really seem to forget that AMD still own a large share in Global, and are by far Global's largest customer.

 

[JAYDEEJOHN]

All this "as soon as GW gets customers, AMD will be secong fiddle riddle drizzle" has to stop.
Its ludacrous ( or is that snoop) to propose such things, especially after the current acquisition. All those hopes have down by the way of the mighty buck, which will be more than Intels in the fab sector per fab, so it doesnt play at all

 

[JAYDEEJOHN]

Im thinking 2 reasons for more AMD visibility from OEMs. One is, they want to cut the strings for various reasons from Intel, as a few were mentioned already, but also, for the sake of diversity, seeing what can happen with all your eggs in one basket

 

[roofus]

Perhaps you have a higher opinion of people who blindly buy brands than I do.

To me, a smart person would look in depth at everything when about to make a purchase (quite a substantial purchase for most people). They would then decide whether or not paying more for the intel was really worth it. You won't find many graphs showing intel cpu's beating AMD's on price performance, put it that way.

It doesn't matter. You cannot walk into a retail electronics store and not find one or several people relying solely on the recommendation of the store attendant they are speaking to as to what to buy or some stupid commercial they sae to prompt them to buy something. Of course its silly and I have little to no pity for them but it is what it is.

 

[ElMoIsEviL]

Hehehe,

How does any of this have anything to do with an OEM backlash or the anti-trust case? Can someone please link me to a statement from IBM which reads something like:

"Due to the anti competitive practices from Intel we have chosen AMD".

Didn't think so...

 

[JAYDEEJOHN]

But you can use my reasoning above for such actions. Which wasnt possible some years ago, which ties this together

Or, do you think thaat IBM would throw Intel under the bus?
And saying what youre saying, would put IBM under the scrutiny of some as well, and besides, actions speak louder than words, which spoken causes more harm to IBM, than actions themselves

 

[Chad Boga]

As for Intels lead, it appears to be disapated somewhat,

When then do you anticipate that Joe Sixpack will be able to buy a 32nm AMD CPU product from NewEgg(i.e. in stock, not pre-order)?

 

[ElMoIsEviL]

But you can use my reasoning above for such actions. Which wasnt possible some years ago, which ties this together

I don't see a link at all.

The business world is cut throat, dog eat dog, Capitalism. It's all about maximizing profits... there is no morality tied to what companies do. When companies do something we perceive as being "good" it is because they've found what they think is a new market to exploit what it is we find to be "good". In essence the incentivization of "good".

In this case... the fact that Lenovo chose that particular CPU could be for various reasons. It fits the power envelope, it is priced appropriately and it performs adequately based on the aforementioned benefits (what I have mentioned are not absolutes but rather "some" of the reasons why Lenovo could have picked that AMD CPU they did).

As another user mentioned, IBM and AMD are pretty much tied to the hip and have been for some time now (working and funding process technologies). I understand that Lenovo is no longer owned by IBM though which does seem to indicate that this line of reasoning doesn't totally add up.

I don't know much about the author but I would think that perhaps he is a tad bit subjective because anyone who is truly objective would notice that the pieces of the puzzle don't fit (as the author claims they do). In other words the way the author links the Intel anti-competitive practices to Lenovo's adoption of an AMD CPU is purely circumstantial/assumption.

 

[JAYDEEJOHN]

But automatically assuming it wasnt a part of IBMs decision isnt being fully honest here, as you said, companies are cut throat yes? And what a better way of showing Intel that they shouldnt have done this to IBM back in the day, according to the EUs PDF, as well as the FTCs?
I agree with all your points, but omitting mine isnt looking at the whole picture.
I dont claim this as to be so short sighted as it being the only reason, and quite possibly, it isnt one at all, Im just dsaying I can see it as part of the decision making process for said reasons

PS As for the aythor, hes brilliant, as it gets hits. Right or wrong

 

[ElMoIsEviL]

But automatically assuming it wasnt a part of IBMs decision isnt being fully honest here, as you said, companies are cut throat yes? And what a better way of showing Intel that they shouldnt have done this to IBM back in the day, according to the EUs PDF, as well as the FTCs?
I agree with all your points, but omitting mine isnt looking at the whole picture.
I dont claim this as to be so short sighted as it being the only reason, and quite possibly, it isnt one at all, Im just dsaying I can see it as part of the decision making process for said reasons

Lenovo is not IBM though and businesses don't seek to reduce their profits they seek to maximize profits and thus a return to shareholders.

Any business who practices any sort of "revenge" does so at it's own peril. I would only see it logical, from a business point of view, if Lenovo chose the AMD chip due to all of it's aforementioned characteristics and that by chance it was also a way of exacting revenge. But this line of reasoning sounds tenuous at best.

 

[ElMoIsEviL]

It's also important to mention that I am not pro-capitalism or a capitalist. I really find the entire system immoral (from an obvious subjective point of view). I'm an anarcho-syndicalist.

So for me to be making the statements that I am is not because I will it to be the case.

 

[fazers_on_stun]

Hmm, this whole thread is kinda pointless IMO. First, consider the OP is known as a total fanboy. 2nd, two low-end models from one OEM does not make for a trend, let alone a "backlash".

AMD is very very late to the netbook feeding frenzy, which is predicted to start to decline in a couple of years anyway as full-featured notebooks become smaller & more efficient, and cellphone-type PDAs get larger and less efficient 😀. And AMD, when they do show up to the party, will be sandwiched between Atom & Arrandale anyway.

 

[JAYDEEJOHN]

IMHO, having competitive pricing and perf, and very possibly wanting to keep more than 1 iron in the fire, this was done.
@ Elmo and everyone else, think first.
Since its only good business to have competitors for your parts, and thereby get better pricing, regardless of Intesl prior illegal acitivites, if these companies dont at least throw a bone to AMD, then how can they secure that competitive scenario, if nt them then who?

These are reasons for such things, add a lil spice, and you have a story, which may be about the headline, or not

 

[Chad Boga]

As for Intels lead, it appears to be disapated somewhat,

When then do you anticipate that Joe Sixpack will be able to buy a 32nm AMD CPU product from NewEgg(i.e. in stock, not pre-order)?

 

[roofus]

Always smart business to offer SKU's with competing CPU's. It could be the deciding factor in selling a couple thousand of them to some corporation if their IT department is bent on going AMD.