Ramblings, just ramblings
DING!
Published on July 12, 2005 By Amitty In Gadgets & Electronics
So, AMD (American Micro Devices) has decided ot wage a war against it's only competitor, Intel, for unfair business practices, a'la DOJ vs Microsoft back in 97. The processor manufacturer is calling Intel's business influence unfair.

What started as a lot of back and forth, AMD has decided to push it's suit onward to the American leagal system and taking its competitor to court for praciticing 'monopolistic' practises when it comes to selling processors. This harkens back to the anit-trust lawsuit that the Department of Justice and 20 States in the US files against software giant Microsoft.

In detail, AMD accuses Intel of:

1. Putting conditions on rebates, allowances and market development funding on customers' agreement to severely limit, or forego entirely, purchases from AMD;
2. Establishing a system of discriminatory, retroactive, first-dollar rebates triggered by purchases at such high levels as to have the practical and intended effect of denying customers the freedom to purchase any significant volume of processors from AMD;
3. Threatening retaliation against customers introducing AMD computer platforms, particularly in strategic market segments;
4. Establishing and enforcing quotas among key retailers, effectively requiring them to stock overwhelmingly, if not exclusively, Intel-powered computers, thereby artificially limiting consumer choice;
5. Forcing PC makers and technology partners to boycott AMD product launches and promotions;
6. Abusing its market power by forcing on the industry technical standards and products which have as their central purpose the handicapping of AMD in the marketplace.

AMD claims these potential antitrust violations have occurred over all levels of the IT industry on a global basis. But these were things that we heard back in the Microsoft antitrust case to begin with. Where does the IT community sit?

First off, while AMD does indeed make a better processor, the company has shown no growth and in fact has been losing market share. By siting the reasons above, it could be a decent arguement that AMD is unfairly being hasselled out of the market. While Intel does have a television presence, AMD has forgone this. Intel is a wider reconized name than AMD, regardless. It is possible in my mind that part of this really has to do with the branding of the products. IT is not unreasonable that companies carry a processor make that consumers reconize.

I personally see this as a weak attempt to try and bring some attention to a company that is starting to lose out. I beleive that a part of a successful business formula is exposure. Intel has always hooked great deals with large computer companies, be it IBM or HP. Intel also puts itself out there at events and sponsors things. AMD sits quietly in the corner and makes processors. While it is a good company for processors, I really can't believe that Intel has forced it's presence in the IT world to cripple the competitor. After all, I know hundreds of people on my IM list alone that will pick AMD just because it ISN'T Intel.

AMD is willing to take this all the way for a verdict in their favor, but will it continue if revenue starts to spurt up? I think not. Then again, maybe they have a legitimate case. Bullying in the business world is not unheard of, and if Intel is guilty of it, so what? Business is a rough world, and only the strong survive. Good luck AMD.





Comments
on Jul 12, 2005

Good Article!  Thanks for boiling it down. 

And while I will not debate the AMD vs Intel who is better thing (others will I am sure), the fact that Microsoft writes for Intel means that AMD does have some bugs when running software.  I have run into a few.  I like AMD but cant afford it due to the minor incompatibilities.

But I hope they dont lose out.  We do need competitors to keep intel honest!

on Jul 12, 2005
I went out and bought an AMD machine, and I also got one for my Mother and my sister as well. The fact is for consumers, the only 64-Bit machine available is the AMD XP chip line. Now with that in mind I can agree with business being a rough world, but when you have as much market share and leverage as Intel you have the ability to effectively stifle competion to the point that you are the only company left. I think that AMD has solid grounds to move ahead. Do I feel that it's going to seriously alter the current market? Of course not. Do I feel that AMD will be around a few years from now? Maybe. I hope so though because without them you effectively have a monopoloy and technology will be invented at Intel's pace which will be stagnet. Intel will have no reason to offer 64 bit processing to the customers, till they discuss it with Microsoft and agree upon a good time to "release" the techology so they can sell that and say, hey look at this "brand" new technology we are releasing and this brand new OS that we are releasing so you HAVE to buy it. Done after maximizing their sales of their 32-bit processors.

Point is...Intel - competition will = Increased Prices and Decreased Innovation.
on Jul 13, 2005
THe thing is that it is great the the AMD line of 64 bit chips are out there, and gret for them to jump the line and be first. The problem I see with AMDs move is that they put so much time and effort into producing 64 bits chips without the support of 64 bit programs/OS. Sure, XP 64 is supposed ot be somewhere (has someone actually seen it yet? I haven't) and all that time and resource could have gone elsewhere. I have a feeling that AMD will stay in there for the long run, but as a small market share until there is a need for the technology it brings us. I love the 64 bit processors, but I would like something comparable to use with it.

As far as the MS and Intel venture, it is true. Intel won't say boo without listening to MS. While Intel chips were iffy in the past, I do have to give them a kudos for improving the line and breaking through with great Hyper threading technology. Unfortunately, like in all forms of business, it's not what you know, it is WHO.
on Jul 13, 2005

Sure, XP 64 is supposed ot be somewhere (has someone actually seen it yet?

I think MS is waiting for Intel's 64 bit desktop chips before 'releasing'  it.  You are right, it is WHO.

on Jul 13, 2005
I would concure that statement
on Jul 20, 2005
AMD claims these potential antitrust violations have occurred over all levels of the IT industry on a global basis. But these were things that we heard back in the Microsoft antitrust case to begin with. Where does the IT community sit?


Not quite. These have allegedly occurred over many levels of the PC Manufacturing industry, which is a smaller (though clearly very important!) portion of the overall IT industry. If you read the actual complaint, the allegations are very specific and quite damning. Companies like HP, Dell, and IBM were making deals with AMD and then having to back out at the last minute because top-level Intel executives (including the CEO, in at least one case) would threaten them with economic retaliation for supporting AMD. (Economic retaliation was generally in the form of either the withholding of credits and rebates, or in delaying or denying shipments of Intel processors.) AMD has top-level executives from those companies on record as saying that Intel forced them to renege. The CEO of HP was quoted saying that Intel "has a gun to my head" when he backed out of a deal.

The IT community at large has very little to do with the fracas; but it's hard to buy and support AMD-based computers when no manufacturer will make them.
on Jul 24, 2005
When I read the first of the allegations, these were some of the hard points that were pointed out. Now that they have started in earnest, and I have read a lot more about it, this is my response:

" Yes, AMD is a superior chip, and yes it is hard to buy and support a AMD-based computer." While I was shocked to read some of the ensuing media, I have changed my stance. It does make sense the Grove and company would end up using retaliation for people using their competitors chips. I was amazed that the information is coming streaming out now, and I am a little ashamed that I supported Intel in this fight.
on Sep 17, 2005
You may buy AMD machines, but they won't be Dell computers.
Dell doesn't sell AMD and this is a PRIME example of being able to sue Intel for billions.

Dell and Intel signed an exclusive contract, and Dell is one of the TOP pc makers. This is highly speculative business practice, and I think AMD has a suite against Dell as well.

Regards,
Fox
on Sep 25, 2005
Yes, DELL is exclusive to INTEL, but that is just more of a image thing. In talking with many people, including some marketing people that used to work for Microsoft, it only makes sense.

Intel has played the market relatively well. They are well-known, through tie-ins and commericals. AMD is a word of mouth company that has grown fast. I tend to shift back and forth between who I am siding with. While AMD is, as I have said, makes a superior chip, the more I read of unlawful practice on Intel's part, the more I wonder.

Name reconition is a big draw for a industry that moves as fast as the computer industry. Intel has spent a lot of time putting itself out there and broadcasting it. More computers are sold with Intel chips, but is that from pressure from Intel? I am on the fence about that, citing that it is a 50/50 possibility. In a world driven by branding, couldn't it be true that Intel has a larger marketshare because of that, simply, they are well-known? It isn't something that will be figured out soon, but I watch it carefully now.
on Sep 26, 2005
Yes, DELL is exclusive to INTEL, but that is just more of a image thing.


"Just an image thing"? No, I think if you dig you'll find that there is BIG MONEY behind Dell being an Intel-Only company; Intel is giving Dell a *lot* of economic incentives to stay Intel-Only.

It's certainly true that Intel has a larger marketshare because they started earlier and are extremely well-known. That's not the issue. The issue is, has Intel used its market position to bully companies out of using a technically superior product?
on Oct 19, 2005
I really enjoyed your article. I think intel is great, but their business practices do suck. With the little knowledge that I have AMD is totally justified in their case and I think it is great that they are doing it. There should certainly be more competition than just AMD & Intel for processors. Personally, I think AMD is better and will be much better if they can get an equal chance at the market!

The first processor that I ever tried to truly understand for an architecture was an AMD processor. I like computer hardware; I guess that makes me a geek! Down with Intel-they suck just like Microsoft sucks. Monopolies might make a lot of money but I think monopilies often lack quality: Microsoft for example. The average user buys it, but its not good for the average user!
on Oct 21, 2005
Although I am a fan of AMD chips and feel that they certainly have grounds for the suit, they still don't have the manufacturing capability to actually compete for exclusive contracts similar to the one Intel has with Dell.
They were rumored to be in discussions with Dell to supply AMD 64 processors to them but due to their lack of Fabrication facilities it came to nothing.
IMHO: For gaming there is no comparison; AMD is the boss.