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/

 

[ElMoIsEviL]

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

From an OEM standpoint (and having worked for a large one). When an OEM is looking for a new processor for a new system they entertain all the competition (within reason). So for GPUs they obtain OEM X-rev ATi and nVIDIA cards and for CPUs AMD and Intel. They also obtain various chipset etc.

They then choose a product based on the mixture of aforementioned characteristics in my previous posts. I have several such products here at home. Including X-rev Dell XPS systems, nVIDIA graphics cards and ATi Graphics cards. Some call them "engineering samples" but in truth they are a step past the engineering samples.

 

[JAYDEEJOHN]

And, knowing that a competitor needs your business plays into your decisions, of whivch you never saw, unless we all know you?
Those decisions are made aways up the ladder.
Now, undertsand what Im saying here. This in no way makes AMD look good on what Im saying, and actually Im denying AMDs nerit, but only doing so to show other aspects of business your product model may have not been privy to.

 

[Guest]

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...

What I think is a lot of the OEM's are scared not to go with AMD products now, in case the world governments start asking awkward questions of them.

On top of that, they all realise that they have better margins selling AMD products. The only thing keeping most of them from doing it before was fear - fear of intel.

 

[Chad Boga]

What I think is a lot of the OEM's are scared not to go with AMD products now, in case the world governments start asking awkward questions of them.

On top of that, they all realise that they have better margins selling AMD products. The only thing keeping most of them from doing it before was fear - fear of intel.

And in a number of instances, uncompelling offerings from AMD.

 

[Guest]

And in a number of instances, uncompelling offerings from AMD.

That's just totally false. AMD wins in price performance and it's not even up for discussion.

The average buyer might know the intel brand but that isn't as important as price for most. And even now, with intel releasing 32nm cpu's with on die IGP, if you put that up against AMD's equivalent cpu platform on cost and showed a person each pc running a selection of media, they would buy the AMD.

AMD aren't behind in market share because they can't sell their chips, they are behind in marketshare because they haven't been competing properly - Dirk said as much, especially in notebooks where AMD only has 2/3rd's of their desktop share. A lot has changed the past 6 months, and it will change more in 2010 too, but the real change is coming in 2011.

 

[JAYDEEJOHN]

It does come down to, how often can AMD meet these requirements.
People still bought the NV30 for OEMs as example, since the cpu past has been tainted, we really cant use that.
You hit and you miss, but having a competitor is a factor at some point, regardless

 

[Chad Boga]

That's just totally false. AMD wins in price performance and it's not even up for discussion.

No it's not.

AMD have over the last few years been horribly uncompetitive in mobile, so who would blame an OEM for not going to the trouble of having an AMD range in their laptops.

Be more rational and not such an absolutist.

 

[Guest]

AMD laptops are absolutely fine for what laptops are, in fact the igp alone makes them better than intel cpu + intel igp.

The problem was AMD haven't really tried to put that point across until Vision launched. Mark my words, AMD have made inroads into intel's notebook market share this quarter, not through any great tech advance but simply through trying.

 

[Chad Boga]

AMD laptops are absolutely fine for what laptops are, in fact the igp alone makes them better than intel cpu + intel igp.

The problem was AMD haven't really tried to put that point across until Vision launched. Mark my words, AMD have made inroads into intel's notebook market share this quarter, not through any great tech advance but simply through trying.

Even the nutjobs on AMDZone conceded that AMD laptop offerings were crap, and complained they had to go Intel as a result.

AMD may have improved on that recently, but it still shows how your blanket statement before was wrong.

 

[Guest]

Even the nutjobs on AMDZone conceded that AMD laptop offerings were crap, and complained they had to go Intel as a result.

AMD may have improved on that recently, but it still shows how your blanket statement before was wrong.

Amd laptop cpu's are pretty woeful yes, but the igp is miles better than any intel igp.

For a laptop with integrated graphics, I'd take AMD every time as would anybody who saw both in action.

My blanket statement was about price performance however, and even in laptops any AMD will beat any intel on p/p. They aren't *slow* they are just bad on battery life.

 

[JAYDEEJOHN]

Overall, I think AMDs on the verge of some decent moves.
Saying how well theyll do is one thing , but it is true to a point, they really havnt been trying.
The new approach has been selectively handled, starting with the ATI cards, moving to the x3 and the P2s.
AMD didnt offer anything compelling and didnt push the mobile market till they actually had something decent, which is coming. Not trying with bad solutions vs trying with better solutions are worlds apart, and for this, I see what jenny is saying, but again, I wont say as to how good theyll do, too early yet

Let me say this. Didnt the x3 come first? Then the better chips?

 

[Guest]

http://www.itp.net/578576-exclusive-dirk-meyer-president-and-ceo-of-amd

That's a good interview with Dirk Meyer, it explains a lot.

Scott Rothbort of the TheStreet.com recently added AMD to his list of ‘worst run companies' stating that "the entire smartphone boom has left AMD behind in the dust, and the company still resides in a desktop business model mentality". If AMD is focused purely on the classic PC client device, without getting into smartphones, embedded processors and so on, can you still remain viable?

Dirk -

Absolutely yes. Somebody called me up with that comment - part of running a business is deciding what you are going to do, and more importantly what you are not going to do. As we stand back and look at the technology that we have, we can create products around those technologies that target a lot of markets - PCs, smartphones, consumer electronics, embedded and so on - but the reality is, that like any company, our resources have a limit, and the immediate opportunity, in front of us is clearly in the PC market, which is still a gigantic market, the total available market for the components of the type we can make is in excess of $35 billion. We have today only a small fraction of that, and meanwhile we have a customer base that wants two strategic suppliers, and we are under represented in the market. We are under represented in notebooks, we are under represented in emerging markets, we are under represented in some aspects of the commercial market, so I think we have got a huge opportunity to grow in the PC business, and that is what we aim to do for the time being.

 

[verndewd]

If this is the "start" of oem backlash, we should see a notable increase of AMD's marketshare in six months.

Will we?

it should show in the quarterly, likely a slow steady trend upwards. my concern here is fab capacity; if trends continue like this GF will have a tough time keeping up. They dont have anymore fabs now than they did during the 939 dominance and they were heavilly constrained, lets hope abu dahbi can throw out mass cash for fabs.

sure theyll increase production with node shrinks and wafer size increases but realistically how far does that go in the global market?

 

[verndewd]

Try AMD was linked to IBM's left small toe ... that might be more reflective of the actual relationship.

no. a bit of research goes a long way here. AMD is no more linked to IBM than Intel is.

 

[JAYDEEJOHN]

Well, production yields alone allow for more than double, just on nodes, and as was said, having more fabs than they used to also allows for those fabs to make do where theyre needed as well for other customers, since cpus are usually cutting edge in nodes, and GPUs dont have nearly the sales numbers compared to cpus

 

[Guest]

That's why they will go with light versions of chips now Vern.

The Athlon X4 was probably the best chip of 2009, and I'm sure it surprised the hell out of everyone with its performance.

For a long time AMD have been chasing behind Intel at Intel's strengths, now I feel they are concentrating on AMD's strengths instead.

Can you imagine what would have happend had AMD released the Athlon II X4 a year ago? They would cost $50 now. AMD aren't shipping a lot of high performance parts anyway and though I wouldn't advocate a total abandoning of the high performance market, cheap and cheerful is what will hurt intel most.

"We will make electricity so cheap that only the rich will burn candles." ~ Thomas Edison

AMD will make cpu's so cheap, only the rich will buy intel.

 

[ElMoIsEviL]

What I think is a lot of the OEM's are scared not to go with AMD products now, in case the world governments start asking awkward questions of them.

On top of that, they all realise that they have better margins selling AMD products. The only thing keeping most of them from doing it before was fear - fear of intel.

I see the idea you're trying to convey but I don't see how Intel's past practices with Dell somehow frightens other OEMs.

Again, a business is run to make money... that's it. The Bottom line is all that matters in the Corporate world. The majority of people who don't think this is true are Free Market ideologues who actually believe that Corporations have the people's best interests at heart. I say bullocks. A Corporation will have the bare minimum interests of the people at heart. They will prefer a neutral or slightly bad/slightly good reputation in the eyes of the public... but the moment when their bottom line is threatened, Corporations get pretty nasty.

It is true of Intel as it is true of any other entity operating in the Free Market. When I state that AMD would do the same if they were in Intel's position I do not state in order to deflect criticisms of Intel. I do so rather to instill and certify my criticisms of the Free Market as a whole. Competition does not only bring the best of us it also brings the worst out of us. In competitive sports, when your team is down... you will often see people resorting to violence.

We see it in the football (soccer) stands just as we do in the Hockey rinks (5mins for fighting) or the deliberate attempt to decapitate or permanently injure the other teams star players. We cheat, lie, steal, rape, murder and pollute all in the name of Greed.

Businesses live by those rules. Therefore your notion that somehow a business is frightened by government is laughable. Government is in the pocket of Big Business and has been for a long time now (since around the 1960s after the assassination of JFK). No Corporation fears today's governments as today's governments (in the western world mostly) are pro Free Market Corruption.

Lenovo picked AMD because the product from AMD just happens to offer the qualities which Lenovo wants and that is it. Trying to make it seem like it is anything more than that ignores the big picture.

 

[Guest]

I'm not necessarily disagreeing with a lot of what you say elmo, but if you believe Lenovo didnt use AMD processors for any reason other than intel 'financing' then I think you probably should look at the dell history.

Who the hell are Lenovo to not use AMD cpu's anyway? Good enough for HP, Acer and Dell (now) but not good enough for upstart Lenovo? 😗

There has been a lot of Chinese officials, Lenovo management and Intel bribery salesmen making a nice sum of money on this for the past few years. I think both of them have decided to end it asap and move on before questions start getting asked.

 

[notty22]

That's why they will go with light versions of chips now Vern.

The Athlon X4 was probably the best chip of 2009, and I'm sure it surprised the hell out of everyone with its performance.

For a long time AMD have been chasing behind Intel at Intel's strengths, now I feel they are concentrating on AMD's strengths instead.

Can you imagine what would have happend had AMD released the Athlon II X4 a year ago? They would cost $50 now. AMD aren't shipping a lot of high performance parts anyway and though I wouldn't advocate a total abandoning of the high performance market, cheap and cheerful is what will hurt intel most.

"We will make electricity so cheap that only the rich will burn candles." ~ Thomas Edison

AMD will make cpu's so cheap, only the rich will buy intel.

Imagine if
Imagine if
Imagine if
If the i5750 came out a year ago, couple months after the i7, AMD may have never sold any 955's.
A year ago the PII 720 was released , its not 50 dollars, in fact its more expensive.
You make the ra ra ra zip boom bah shiny AMD outlook conclusions that don't reflect reality.
Chip of the year without a doubt was the Intel I5 750
only in my opinion.

(Credit: iSuppli)

 

[Guest]

I'm sure a bunch of votes on cpu of the year were taken already notty, and yes it was the x4 620 that walked away with it.

 

[B-Unit]

Damn, where are my thumbs?!?

+1 Elmo

 

[qurious69ss]

I'm sure a bunch of votes on cpu of the year were taken already notty, and yes it was the x4 620 that walked away with it.

Really, that's your response? Anyways does anyone know if Jake Barnes is still around?

 

[verndewd]

That's why they will go with light versions of chips now Vern.

The Athlon X4 was probably the best chip of 2009, and I'm sure it surprised the hell out of everyone with its performance.

For a long time AMD have been chasing behind Intel at Intel's strengths, now I feel they are concentrating on AMD's strengths instead.

Can you imagine what would have happend had AMD released the Athlon II X4 a year ago? They would cost $50 now. AMD aren't shipping a lot of high performance parts anyway and though I wouldn't advocate a total abandoning of the high performance market, cheap and cheerful is what will hurt intel most.

"We will make electricity so cheap that only the rich will burn candles." ~ Thomas Edison

AMD will make cpu's so cheap, only the rich will buy intel.

google amd intel chip costs neck and neck.amd profits less.

 

[randomizer]

Once again enigma need only start a thread and it gets messy. Come on man, at least respond to the threads you post 😀

 

[ElMoIsEviL]

I'm not necessarily disagreeing with a lot of what you say elmo, but if you believe Lenovo didnt use AMD processors for any reason other than intel 'financing' then I think you probably should look at the dell history.

Who the hell are Lenovo to not use AMD cpu's anyway? Good enough for HP, Acer and Dell (now) but not good enough for upstart Lenovo? 😗

There has been a lot of Chinese officials, Lenovo management and Intel bribery salesmen making a nice sum of money on this for the past few years. I think both of them have decided to end it asap and move on before questions start getting asked.

I worked for Dell. I can't tell you my position or what I did there though due to the agreement which I signed when I left the company but I can tell you that I am very familiar with what it is you're talking about.

I am of the opinion that Intel is guilty of most of the accusations leveled against them by AMD. What I am not prepared to do though, is to use the example of Dell in order to speculate about Lenovo.

Dell was the only major OEM to allegedly subscribe to the Intel rebate program (there are speculations surrounding IBM but no smoking gun found). Other major OEMs (such as HP for example) began selling AMD processors in protest of this (at the time). Intel is a large Corporation but so are HP, Dell, Acer and Lenovo. Intel does not have the capital to leverage them all and thinking that Intel does, in my opinion, ignores the sheer size and magnitude of those particular OEMs.