View Full Version : AMD is suing Intel
Betty 06-28-2005, 09:21 AM Uh oh... judging from the list of allegations, this is going to get UGLY.
There's a 48 page complaint sheet. Most of it is legal crap that'll put Ben Stein to sleep, but here's some little tidbits that inq (http://theinquirer.net/?article=24236) was able to dig up:
AMD says Intel has paid Dell and Toshiba huge sums not to do business with AMD. It says Sony was paid "millions for exclusivity" and as a result AMD’s share of Sony’s business went from 23 percent in 2002 to 8% in 2003, down to 0% today.
It claimed Intel paid NEC several million dollars for caps on NEC;s purchases from AMD. And it further complains that, when AMD succeeded in getting on the HP retail roadmap for mobile computers, "Intel responded by withholding HP’s fourth quarter 2004 rebate check and refusing to waive HP’s failure to achieve its targeted rebate goal".
It says that in 2000, then Compaq CEO Michael Capellas said that because of the volume of business given to AMD, "Intel withheld delivery of critical server chips. Capellas, says AMD, told the company "he had a gun to his head," and had to stop buying AMD.
As much as I despise open letters, here's one from AMD's CEO Hector Ruiz (http://www.amd.com/us-en/Weblets/0,,7832_12670_12684,00.html?redir=CORBF02)
Also, if you've got a lot of time on your hands, have a look at the copy of the full complaint (http://www.amd.com/us-en/assets/content_type/DownloadableAssets/AMD-Intel_Full_Complaint.pdf) that was submitted. It's an acrobat file, so it'll be easier to just rightclick and "save as".
Most of the good stuff starts around page 15.
Dr_EluSivE 06-28-2005, 11:39 AM Alright i may be biased since my last 4 systems have been AMD powered, but I bet alot of those allegations are true. It seems like the better the AMD chips get, the less Manufacturors use them. We all Know how much cheaper individual processors are on AMD's side, why wouldnt companys such as dell Want to go with a cheaper, better product? I have been wondering if stong arm tactics have been going on at intel for a while, i will be interested to see how this turns out.. if there is ever a ruling. One of the reasons i dont buy Pre bult computers (and there are many reasons) is you cant get AMD chips in them.. AMD has always treated me right, and my pentium owning friends have been jelous of my "slower" chip giving me better performance. I just hope something good comes out of this.
boedicca 06-28-2005, 11:47 AM I don't think there is really any new news here about Intel's business practices. The way they work (Microsoft uses a similary method as well):
- The OEM commits to a forecast of units going out several months into the future.
- At various commitment levels, Intel provides matching "co-operative marketing" funds. They subsidize the marketing under conditions that the Intel Inside logo and sound be included and that mentions of other compenents be excluded (or they can be included for lower marketing support).
- The OEM is required to take delivery of the forecasted units, even if demand slumps. If they don't, they lose their priority for fugure allocations - which when a new processor is released, can be very damaging.
- Given the financial risk of having to commit to buy to a forecast, the OEM is motivated to ensure that they use as much of the forecasted units in production as possible.
In essence, Intel shifts its inventory risk to the OEM/Channel by forcing the discipline of them making realistic forecasts or eating the overages.
M$FT also requires purchases to forecast - although the have no real inventory risk - they just use it to manage predictable growth.
I would not bet those allegations are true persay.
For example, if Intel say "sony, here's 10 million dollars to sell only intel" that is illegal and they should pay.
If, for example, Intel said "as a benefit of being an intel only shop, we'll cut your chip price from X to X-10" that is not illegal and they should not pay.
I am willing to bet the latter happened.
RedLine99 06-28-2005, 02:55 PM alot of business intelligence takes time to develop..so AMD might have some valid points. Hopefully they aren't basing their case on trade show gossip and new hires bringing insider information into the organization. for them to take actual legal action though you would have to assume they aren't just pulling a publicity stunt.
boedicca 06-28-2005, 03:01 PM Intel has an army of lawyers. There business practices are heavy-handed, but I seriously doubt they have broken the law.
Betty 06-28-2005, 03:43 PM According to the allegations in the complaint, Intel used it's influence to ensure that OEM's were not buying AMD. In one of the accounts on pg 30, Intel threatened to raise prices on chipsets "if any processor business was awarded to AMD outside of Europe."
Here's one from page 31
When such more nuanced means of achieving exclusivity fail, Intel has
simply bribed distributors not to do business with AMD. For example, a high-ranking Tech Data executive turned down $1 million to stop doing business with AMD, which caused the Intel representatives to ask, “How much would it take?”
and page 34
Intel instituted a rebate program similar to what it foisted on OEMs, with similar exclusionary effect. Under this program, Intel provides full MDF payments to retailers, such as Best Buy and Circuit City, only if they agree to limit to 20% not just the shelf space devoted to AMD35based products, but also the share of revenues they generate from selling AMD platforms. IfAMD’s share exceeds 20%, the offending retailer’s marketing support from Intel is cut by 33%across all products.
boedicca 06-28-2005, 03:54 PM The first quote is highly suspicious.
The second one is a standard Intel business practice - as well as one commonly used by many manufacturers. Retailers sell shelf space. That's how they make money.
Betty 06-28-2005, 08:32 PM It's "highly suspicious" only because at first glance it's hard to believe. All the claims are on paper, whether AMD can back it up with testimonies is something we'll have to wait to see in court.
As for the second quote, you forgot the part that said but also the share of revenues they generate from selling AMD platforms
So if AMD products are selling too well, Intel punishes the "offending retailer" simply for the crime of an AMD product selling too well.
The Frog 06-28-2005, 09:30 PM If these come out to be true, not only will Intel pay heavily legally, but think how that will cut their market share- when Joe Q Public hears that Intel was so scared of AMD's prodct that they had to cehat like this, mmore Joe Q. Publics will be in terested in AMD ware.
RedLine99 06-29-2005, 06:38 PM aha! explains why we'll find them in Apples all of the sudden, eh?
DJ NoDoz 06-29-2005, 07:18 PM If these come out to be true, not only will Intel pay heavily legally, but think how that will cut their market share- when Joe Q. Public hears that Intel was so scared of AMD's prodct that they had to cehat like this, mmore Joe Q. Publics will be in terested in AMD ware.
I've just recently bought an AMD machine and am quite pleased with it, (price was the motivating factor) but I tend to dissagree with you Frog, you'd be amazed at how much "repitition of product name" plays as a selling tool. Even bad press is good press for said items. True some of the practices may seem a little dishonest even downright unethical, but in the end we all bow to the almighty dollar. There are some educated people out there, but most are sheep, willing to be lulled into a comfortable spot where all "name" brands are the better item.
C-Bad 07-18-2005, 12:16 AM This is interesting stuff....
I love my AMD64 3000+, was a very cheap system to build compared to old school P4 processors which cost quite a bit more.
XP Pro x64 (which I'm currently using) runs very nice and quick, and Longhorn x64 beta I have runs awsome as well. 32bit-teh suck.
Erhnam 07-18-2005, 03:00 AM Here is to hoping Intel gets a nice chunk torn out of them.
Monster 07-18-2005, 04:10 AM I would like to see Intel take it up the ass personally, but I think it'll really come down to a jury's decision about whether skirting the edge of the law is breaking it or not--and if someone really screwed up at Intel or not.
|
|