Thursday, July 07, 2005

Intel, a vicious company?

Stemming from a forty-eight page complaint against Intel, AMD certainly says so. The report gives insight into Intel paying other companies so that they would abandon AMD and use Intel exclusively for microprocessors. Even the Japanese Fair Trade Commission or JFTC has recommended that Intel be sanctioned for its misconduct directed at AMD. AMD complains that Intel has targeted both U.S. and around the world customers to refrain from buying AMD from any market anywhere. They say that this goal of Intel’s keeps customers dependent on Intel for very substantial amounts of their product. The forty-eight page complaint also states that companies wishing to deal with AMD to use their microprocessors in their products are threatened with not receiving any quarterly money from Intel which would result in substantial loss to their company. Such companies as Dell have been clamored by customers for AMD solutions particularly in servers. Unfortunately for them Intel has bought exclusivity from Dell with large payments and favorable pricing. AMD also complains that Intel paid Sony not to release any of it’s notebooks in 2003. They say that the payoff, which was in the multimillions, was disguised as discounts and promotional support. AMD’s share of Sony ’s business in Japan abruptly dropped sharply from 23% to 0% from 2002 to 2003.

In 2002, the complaint states that Hewlett Packard was all set to release AMD’s microprocessors in it’s “Evo” product line when at the last minute HP disclosed this plan to Intel in which Intel pressured them to stop immediate use of any AMD product. Intel went as far as pressuring Hewlett Packard’s senior management to consider firing the HP executive who came up with the AMD commercial desktop proposal. When AMD came to Hewlett Packard to convince them to carry a AMD-powered notebook, HP declined. HP explained that Intel had paid between three and four million dollars for exclusivity on HP’s notebook product line for at least one year.

The report goes into other companies like IBM were bought off as well. According to IBM executive Ed Thum, Intel paid them “millions of dollars in market development fund.” AMD also states that AMD was forced to discount their price on their products so that they could compete with Intel but that that it resulted in loss of profit. They say that each time a new line of models come out that this exclusionary practice keeps AMD from becoming a real competitor. The report also seems to say that Intel holds a sever penalty against a company that fails to meet their quarterly targets. In the fourth quarter of 2004, AMD succeeded in getting it’s product into HP’s mobile computers. These products sold very well. AMD captured 60% of HP’s U.S. retail sales for the quarter. Intel responded by withholding HP’s fourth quarter rebate check. They would not forgive HP for failing to achieve Intel’s targeted rebate goal. Hewlett Packard was forced to make it up to them by promising them at least 90% of HP’s mainstream retail business. This is an apparent taste of what Intel could leave in your mouth. The trial will be tried by a jury. So that begs the question. Should other companies even dare now attempt a partnership with Intel? Even if they donate millions to you?


posted by Phatlip12(administrator) at 3:43 PM


Add a comment