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/

 

[verndewd]

You forget that the largest part of the market share rests in server and business. Until they can create a CPU that outperforms in those segments their market share wont increase as much.

Wish we had a number of how many CPUs each company makes so that we can figure how much each could max their market share at.

:lol: thats not what i said dewddid i say consumer and home use? yes

business class is the same dollar/ useage guideline only its focused to fit business which means if needed intel would be placed in higher perf scenarios but the dollar savings through oem for general office users may very well go to AMD. you forget that most biz users arent much above avg consumers.

geeks are 10-20% flat acrossed all spectrums of pc purchases(hpc exempt) many make buying decisions for biz based on contracts and budget. if dell is the main pc contact then the buget for pc's is spread out at dell. In the current global meltdown amd is very attractive. I can assure you not every call center person knows a pc from a cd say cell phone pc users.

I didnt forget an darned thing

 

[verndewd]

Interesting, so they will pay GF to manufacture for them, but in turn GF will pay Amd back if GF makes a profit. A question I have is exactly how is Amd going to pay GF. Will it be a fixed number or will it depend on how many wafers or maybe they will pay only for good die and GF will have to eat the losses.

we need the arrangement data in front of us, AMD still owns a large piece of GF so smitty I think is smoking his own hot air.

 

[JAYDEEJOHN]

Its no different than what they already do with TSMC, where nVidia has better deals from what Ive heard.
It comes down to orders/size/frequency etc, and being a partner itll help as well.
Incentive programd run the gamut, not just to supliers to OEMS, but from makers/fabs to client
Usually, on risk, its a bit different, as sometimes gaurantees are met, regadless ofyeilds, and the fab eats it, other times no, even early on. As process matures, then its you get what you paay for by wafer, unless the fabs targets are off, and due to their messups, which can be confirmed, and are often rolled over to nex order as incentives both ways, assuring orders for the fab, and deals for the client

 

[JAYDEEJOHN]

vern, you cant say that this current eco makes AMD looks good, I already tried that

 

[qurious69ss]

we need the arrangement data in front of us, AMD still owns a large piece of GF so smitty I think is smoking his own hot air.

Secret stuff I'm sure. Now if I remember correctly, the reason that Amd spun off the fabs is because they were losing money in operating them so this begs the question. What if GF looses money, how will that affect Amd?

 

[sighQ2]

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.

Well you mixed your apples and oranges here elmo.

And I disagree with this wild west lawless mentality - no one in business would agree with this.

Besides, it's all an indulgence in pain and misery; which, sadly, is addictive. You don't have to live, or do business, like that.

 

[sighQ2]

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.

WRONG - unless you are now doing damage control for spintel

It's far worse than what you indicate = lots worse.

Really, I thought we were over this stage - maybe you missed the real story.

http://www.extremetech.com/article2/0,2845,2355462,00.asp

 

[JAYDEEJOHN]

I see the HP thing as it having better integrity, as its always been a bit better, and just wouldnt follow this supposed dog eat dog, as some claim.
Besides, its as I said, companies such as HP know their bread will always be buttered better by having more options, which they chose to do, unlike the company Elmo worked for, where the CEO was Intesl CEOs "best man money can buy"

 

[jimmysmitty]

we need the arrangement data in front of us, AMD still owns a large piece of GF so smitty I think is smoking his own hot air.

The original agreement was that AMD was to be 50/50 with GF. That changed towards the end of the closing of the agreement it was around 30% which is why intel brought up the x86 license and the fact that that could lead to breaking the agreement. But that was recently dissolved with the settlement and cross license agreement Intel and AMD reached recently.

Thats why i think that the GF will focus on profits for themselves first considering that the majority owner is the same UAE investor that pumped AMD with $700 million and as well Citi with $7 Billion.

Wish I had that much cash to throw around.

And BTW, I don't do drugs so

Well you mixed your apples and oranges here elmo.

And I disagree with this wild west lawless mentality - no one in business would agree with this.

Besides, it's all an indulgence in pain and misery; which, sadly, is addictive. You don't have to live, or do business, like that.

Hah. Says the guy who is following the word of the Goverments of the world although they are all corrupt and bought by corporations.

Hell the fact that they do anything with antitrust is hilarious since they themselves have been bought out by the very corporations they are trying to bring the hammer down on. But I guess they do it to reline their pockets with more money since they waste the "bribe" money on a new mansion.

 

[ElMoIsEviL]

WRONG - unless you are now doing damage control for spintel

It's far worse than what you indicate = lots worse.

Really, I thought we were over this stage - maybe you missed the real story.

http://www.extremetech.com/article2/0,2845,2355462,00.asp

With all due respect...

Did you not read that article or understand the context of my post?

It is not far worse than I indicate because what you're insinuating is that Intel is Guilty until proven Innocent on all charges (this takes a leap of faith). The three words "The Suit Alleges" comes up often in that article (in front of every single claim). If you would like I could arrange to share with the the definition of the word "Alleged"?

When it comes to Dell, I am of the opinion that Intel is guilty. When it comes to HP however both Intel and HP signed agreements but HP was still able to sell AMD systems even when Intel protested due to the nature of the agreements. You see the agreements were different. In the case of the HP and Intel agreements, the talk was of market share promises to Intel if Intel supplied discounted products. This, in itself, is not illegal. When it came to Dell, the agreement was based on Intel having exclusivity (that is the difference).

With IBM there are claims of the same such practice as with Dell but nothing conclusive. Now when it comes to the allegations of Intel senior executives demanding other companies executives to be fired, that's cut throat dog eat dog business. It happens every single day. It's not like Intel could fire the executives of another company.

There is no damage control for "spintel".

 

[JAYDEEJOHN]

The original agreement was that AMD was to be 50/50 with GF. That changed towards the end of the closing of the agreement it was around 30% which is why intel brought up the x86 license and the fact that that could lead to breaking the agreement. But that was recently dissolved with the settlement and cross license agreement Intel and AMD reached recently.

Thats why i think that the GF will focus on profits for themselves first considering that the majority owner is the same UAE investor that pumped AMD with $700 million and as well Citi with $7 Billion.

Wish I had that much cash to throw around.

And BTW, I don't do drugs so



Hah. Says the guy who is following the word of the Goverments of the world although they are all corrupt and bought by corporations.

Hell the fact that they do anything with antitrust is hilarious since they themselves have been bought out by the very corporations they are trying to bring the hammer down on. But I guess they do it to reline their pockets with more money since they waste the "bribe" money on a new mansion.

You cant say this, as they tax the corps, it all comes back to higher prices, so that makes them look good, but those that choose a more open market arent doing enough for the lil guy. And they are supposed to love the corps? Where the others arent, as they tax the corps? Figure it out, whos snowing whom

 

[jimmysmitty]

You cant say this, as they tax the corps, it all comes back to higher prices, so that makes them look good, but those that choose a more open market arent doing enough for the lil guy. And they are supposed to love the corps? Where the others arent, as they tax the corps? Figure it out, whos snowing whom

I don't love the corps. In fact the only corp I have any respect for right now is Ford for not taking the bail out and doing well vs the Japanese auto makers who have a lower production costs and higher margins. In fact they took car and truck of the year yesterday.

That Fusion does look nice.

 

[qurious69ss]

You cant say this, as they tax the corps, it all comes back to higher prices, so that makes them look good, but those that choose a more open market arent doing enough for the lil guy. And they are supposed to love the corps? Where the others arent, as they tax the corps? Figure it out, whos snowing whom

Maybe they want to have their cake and eat it too. Good cop bad cop but it's still the same corrupted bunch.

Disclaimer: I'm in no way implying that cops are corrupt, especially since my cousin is a cute little porker herself. 😉

 

[sighQ2]

With all due respect...

Did you not read that article or understand the context of my post?

It is not far worse than I indicate because what you're insinuating is that Intel is Guilty until proven Innocent on all charges (this takes a leap of faith). The three words "The Suit Alleges" comes up often in that article (in front of every single claim). If you would like I could arrange to share with the the definition of the word "Alleged"?

When it comes to Dell, I am of the opinion that Intel is guilty. When it comes to HP however both Intel and HP signed agreements but HP was still able to sell AMD systems even when Intel protested due to the nature of the agreements. You see the agreements were different. In the case of the HP and Intel agreements, the talk was of market share promises to Intel if Intel supplied discounted products. This, in itself, is not illegal. When it came to Dell, the agreement was based on Intel having exclusivity (that is the difference).

With IBM there are claims of the same such practice as with Dell but nothing conclusive. Now when it comes to the allegations of Intel senior executives demanding other companies executives to be fired, that's cut throat dog eat dog business. It happens every single day. It's not like Intel could fire the executives of another company.

There is no damage control for "spintel".

That may have been normal fifty or eighty years ago; which is interesting, cos the whole thing is like a return of al capone. What's really interesting is that the influence of that era seems alive and well in you - I really cannot accept that dog eat dog is considered normal and acceptable as a daily diet or lifestyle or even a nice way to do business - no wonder cancer is such an issue. Careful what you support - all that weird hate mentality is really toxic. It's war; and it is not necessary. This seems to be a spin off of being American; and I don't get it - cos most Americans I meet live, in person, aren't like that - but the one's I meet on the internet are sick with this. I suppose you think guns are really good for normal society also.

This is a recipe for war - so what's wrong with peace? When you end a war, what do you do then? Suicide out of boredom? whew.

way over my head man

makes no sense - and this idiocy of man's cruelty to fellow man is a philosophy of the Dark Ages - welcome to present day reality where spintel simply sux - it's real easy.

And re ASSUMED GUILT? They have already been found guilty for all the same crap different day in three previous cases - ya think maybe they were practicing advanced angelism here in their own backyard? nah, they eat their young.

And they haven't stopped yet.

doomed.

 

[JAYDEEJOHN]

Thing about good cop bad cop is, what if we decided not to be the greedy ones? If we educated average well enough to show going after corp does no good in the end, then what? The Dems couldnt claim the Reps were for the corp when we are also, meaning no taxes?
Thatd screw the good cop bad cop, so we should go to the Reps on this one and call their bluff

 

[qurious69ss]

Thing about good cop bad cop is, what if we decided not to be the greedy ones? If we educated average well enough to show going after corp does no good in the end, then what? The Dems couldnt claim the Reps were for the corp when we are also, meaning no taxes?
Thatd screw the good cop bad cop, so we should go to the Reps on this one and call their bluff

I think we're on the same page. Unfortunately though that's not reality. Gov and corps are ran by people and no matter how many good people you have in them all it takes is a few bad apples to spoil the rest rest.

 

[jimmysmitty]

That may have been normal fifty or eighty years ago; which is interesting, cos the whole thing is like a return of al capone. What's really interesting is that the influence of that era seems alive and well in you - I really cannot accept that dog eat dog is considered normal and acceptable as a daily diet or lifestyle or even a nice way to do business - no wonder cancer is such an issue. Careful what you support - all that weird hate mentality is really toxic. It's war; and it is not necessary. This seems to be a spin off of being American; and I don't get it - cos most Americans I meet live, in person, aren't like that - but the one's I meet on the internet are sick with this. I suppose you think guns are really good for normal society also.

This is a recipe for war - so what's wrong with peace? When you end a war, what do you do then? Suicide out of boredom? whew.

way over my head man

makes no sense - and this idiocy of man's cruelty to fellow man is a philosophy of the Dark Ages - welcome to present day reality where spintel simply sux - it's real easy.

And re ASSUMED GUILT? They have already been found guilty for all the same crap different day in three previous cases - ya think maybe they were practicing advanced angelism here in their own backyard? nah, they eat their young.

And they haven't stopped yet.

doomed.

Different laws in every country. Look at Chine. They have no laws protecting any IP for anyone hence why the Godson CPU can exist there.

You forget that every country has different laws.

Look at the EU. Now MS can't even include IE as part of Windows yet Apple can include Safari as part of OS X. Same thing but different too. The EU wont go after Apple because they don't have a majority of the OS market. If AMD did the same thing with say eMachines then you know the EU wouldn't go after them.

You can't take Japan or South Koreas actions into affect in the US because they are different.

 

[sighQ2]

Well japan and korea are different culturally. But you forget a lot of things; and pointing out what people forget is like - you just have no idea.

Laws are different - but remarkably the same. Culturally, a great many, people, laws, cultural stuff, etc etc is all descended from EU-ROPE. Therefore, I don't know how you get to where you are; but the rest of us are highly influenced by simple history. Founders and early governments were formed for protection against all kinds of obvious evil and against tyranny. hello? are we still on the same planet, or did you and toto find yourself not in kansas anymore?

It is also known - that the US and the EU share information in regards to the EU case - it's called evidence. And the US has it's own list. And the antitrust division of the US gov has recently been overhauled to beef it up.

Now maybe, just maybe, that could be about some monster that's running amuck and doing whatever the hell it pleases; without restraint; without even a notion of respect for personal or business boundaries, and with only intent to crush, stifle, suppress, etc and on and on it goes.

Somehow, all that garbage flies in the face of the very foundations of our societies.
This is not rocket science - but if you have no appreciation for the society you live in, or respect for the freedom and other benefits of that society, then you might just ok a helluva lot of crap. In which case, you would recommend the country go to hell in a handbasket. sure sounds like terrorism in it's essence, to me; but your experience is perhaps that that is also just fine.

 

[JAYDEEJOHN]

It comes down to majorities. They dont have programs that help majorities, only minorities, as its seen as a needed implementation to lift them up,whether its people or business, and its very obvious govs do this.
The very definition of a monopoly plays into this

 

[sighQ2]

Yeh, and they also prop up failing big companies, which destroys the natural order, and preserves status quo. That's often about employment figures, but it can be about other concerns such as IP, power, influence, etc. but I don't see this in play here. AMD had to find it's own way out.

I don't see what you mean - def of monop plays into this????

Recently, in Canada, Nortel went down; lots of fuss over that one - people losing pensions while ceo's got bonuses, blocked sale of assets to RIM, really messy, and a lot of protests. I don't know whole story; but it happened years ago, was salvaged for a while, then boom, gone. Stock was high and fell to near nothing; a lot of messy stuff. The gov (i think) blocked RIM from buying; assets were sold to some foreign country - like I said I don't know the details - but the mess was all over the news for weeks.
It was strange that they blocked RIM, also a Cdn company. RIM's owner was also blocked from buying the Phoenix Coyotes - which also made no sense. The NHL kept them in Phoenix; where they went bankrupt in the first place - duh.

 

[Chad Boga]

If a family sold all its cooking instruments, cutlery, plates,glasses, kitchen table etc and then decided to eat every meal at a restaurant, do you think they would be saving money by doing this instead of cooking their own food?

 

[jimmysmitty]

sighQ2 the US government is based off of what the Romans started a Democracy. Most European governments still run a Heirarchy system based on kings/queens ect. And a funny thing, the Asians (Chinese specifically) are probably culturally older than Europe itself considering that their history goes back to at least 200 B.C. (read Romance of the Three Kingdoms, good books).

So no, Eurpoe, Asia and the Americas Culturaly and goverment style differ a lot. The US is a melting pot. And thing is, if we are going after intel in the US we will use info and evidence for the US, not the world. As I siad what we consider ok such as exclusivity contracts or discounts for bulk may not be ok in other countries.

Laws are different per country. Intel could have just given away a free promo CPU to a company and the country wouldn't accept that.

 

[Guest]

Secret stuff I'm sure. Now if I remember correctly, the reason that Amd spun off the fabs is because they were losing money in operating them so this begs the question. What if GF looses money, how will that affect Amd?

AMD are still piling $hundreds of millions into global foundries every year, and still own 35% as well as 50% voting rights. As much as some of you would like to pretend globalfoundries is ready to ditch AMD or something else, the reality is AMD is still a huge investor, and in more ways than just money. Who do you think the scientists and engineers are anyway? They are all AMD people.

 

[Chad Boga]

AMD are still piling $hundreds of millions into global foundries every year, and still own 35% as well as 50% voting rights. As much as some of you would like to pretend globalfoundries is ready to ditch AMD or something else, the reality is AMD is still a huge investor, and in more ways than just money. Who do you think the scientists and engineers are anyway? They are all AMD people.

I suspect that AMD will divest itself of that 35% within the next two years in order to pay down debt.

 

[Guest]

Considering how much AMD has already put into Globalfoundries, and considering how much Dresden and Fab 2 is worth, ATIC would need to shell out a forture for that remaining 35%, a lot more than AMD's remaining debt.