AMD Files Antitrust Complaint Against Intel In U.S. Federal District Court - Page 5

Reread my comments - I said they team up with game publishers to release ads - I did NOT say the ads were in-game. If you look at MaximumPC, PC World, etc. you will see ads for FarCry, Chronicles of Riddick. You don't have to buy the game to see them. They target publications that their target users read - Maximum PC, PC Gamer, etc. Likewise, they target publications like eWeek because those are the publications that the people most likely to be in charge of IT hardware purchasing read. I.E., thay are targeting the CORPORATE clients through those publications. So yes, they do target both end-consumers and corporate clients alike through their advertising.

To say they have 'x' dollars, so they can afford to advertise is irresponsible advocacy at best. Unless you can vouch for their entire fiscal status, you can't possibly make that claim, especially if you use Yahoo! Finance as your source. Companies can't invest, expand, or even offer dividende to their stockholders if their net cash flow balance is $0 each year. That's why companies tend to pocket profits and not spend every last dime they bring in. Intel brings in far more money than AMD - that means they can SPEND more and still return a reasonable amount to their stockholders. Since AMD has less capital to begin with, they can't spend the amounts of money that Intel can and still have a reasonable rate of return to its stockholders. That's why AMD spends less overall on marketing and focuses more on targeted advertising.

So the fact that a company is profit-oriented means they WILL commit illegal acts? . That's a stereotype - not a fact. Not only is it a stereotype, but it falsely assumes that every for-profit venture is out to screw someone over. I know many small businessmen who are in it for profit that would take great offense to that statement. Maybe they teach you in business school that no businesses have ethics and morals, but that's not the truth. I would also point out that that statement above also would imply that you think AMD has committed illegal acts, besed on the simple fact that they are a for-profit company.

In an IT setting - most of the employees. It's important to know what processors the server you're updating is running, because there's usually different versions of the software for each processor. You can't run an Apache web server for SPARC on an Xeon or Opteron-based system.

Thanks for posting examples of the ads I was referring to, snorre.

Ok. What does that mean though...

Expand all connections with customers, partners and end-users.
Evolve beyond products and technologies to solutions.
Enable customer differentiation at ever-declining costs.

That sounds more like a marketing strategy than an add. I would like to know if anyone has seen this add before... it still seems like they are catering to people who know something about computers and catering to experts is not how to establish a brand name. Also that picture with the man in it doesn't show a home, it looks more like a tv studio with tape and video decks for different feeds. Have you seen apple ads? or Target ads? Those are DIRECTLY made for customers that's what I am talking about. I DO realize that AMD adverstising to people doesn't guarantee that prices will be cheaper because Intel still blocks OEMS from using AMD chips but at the same time allowing OEM's to use AMD chips doesn't guarantee they will sell any better either.

THANK YOU SNORRE FINALLY AN ARTICLE THAT CLEARLY DEFINES MY POINT

THAT IS EXACTLY WHAT I HAVE BEEN TRYING TO SAY BUT MY WORDS FAIL ME. THAT IS MY POINT AND NOTHING MORE. Intel is not the only one to blame.. they are to blame but AMD has to take some of that blame too. I do think AMD realizes this but the AMD fanboy bandwagon on this forums does not.

AMD has bad marketing, so Intel's abuse of their market leader position is more acceptable?

NO CAN YOU READ? Where does it say anything is more acceptable please show me? Intel is responsible for their actions but they are not the ONLY reason AMD does so poorly. That is all I am saying and AMD fanboys don't want to accept that. They say 'if Intel didn't do this this and this AMD would be SO much better blah blah" All I am saying is you can't blame Intel for all of AMD's lack of success. AMD has to share some of the blame for that, and that is all I am saying. Let me simplify that quote for you.. it says Intel is only so good at bullying because there is a perception among computer buyers that AMD's products are somehow inferior and AMD has NO ONE to blame for that perception but itself. That is the point and nothing more.

CollegeStudent, go to the XPS2 forum, and post on the Rep point thread, I'll hit you up tomorrow since it seems some of the AMD fanboys neg repped you.. if they signed it please PM me the name

LOLOL I don't even know what rep points are I thought those bars had something to do with number of posts.

Of course they're not the only reason, but there isn't much goddamned point in advertising to the average joe when the average store is being paid off so that they don't carry your products. If Intel wasn't strong-arming the market, AMD would be considerably better. More advertising from the OEMs, as you'd have more of them, and simply more advertisements from AMD, due to increased sales and a lot more point in advertisements.

The perception amongst computer buyers comes primarily from the fact that they purchase based on brand-name, and they've heard Intel more, which is in large part due to Dell commercials. It's partially because of AMD's old processor lineups, but it has a hell of a lot more to do with the fact that Intel gets shoved into nearly every PC by every major retailer. It doesn't help that the OEMs are kept from wanting to advertise their systems by the fact that >5% AMD sales could cause a huge spike in costs.

There's blame to be laid on AMD, to be certain, but Intel's tactics are certainly responsible.

Incidentally, Intel is this good at bullying because it's ten times the goddamned size. Do you think that Walmart drives local businesses under because people think that those businesses are inferior?

And how can AMD overcome this perception if they can't put their products in the market because of Intel's practices? The perception is NOT comething that only AMD can be blamed for. When Intel subsidizes Dell's ads (which is why they run that Intel jingle at the end of every one), how can AMD compete when HP or Gateway can only sell 1/9 as many AMD systems as they can sell Intel systems? What you have filed to realize is that Intel is financing the majority of Dell ads, and buying up much of the ad space that would be available to other companies, INCLUDING AMD. If a.) AMD doesn't have the market capitalization to afford endless runs of ads and b.) can't get prime ad slots because Intel or its partners have already bought them up, what the hell is left for them to work with?

If you are the CEO of HP, are you going to run Superbowl ads for AMD-based PCs and pay the full cost out-of-pocket, or are you going to run an Intel-focused ad and split the costs with Intel? Unless you're a moron, you're going to go with whatever plan will cost you less. After all, the purpose of business is to make a profit, isn't that what you've been saying all along?

Ok you see my point and I see yours, and people don't go to walmart because its superior they go to walmart cause its cheap... I don't know if that was a good example to portray what you meant because a local businesses are in no way able to compete with wal-marts low prices and range of goods.

Also does it make sense for a company to advertise more when they are making more money already? Increase in sales shouldn't cause increase in advertising.. increase in advertising should cause increase in sales. If their products were selling well already don't waste money on marketting, pump development and when they develop new technology they put money to advertise that.

And like the lawsuit said OEMs advertise Intel because Intel pays them too... but think about this if the name Intel was synonymous with crap would companies really want to advertise them? And who is responsible for Intel having a name associated (to the general masses) with quality, even though AMD makes better processors? (for desktops) Thats right Intel... promoting your company name and making sure it gets associated with quality and AMD has failed to do that at least when it matters.

So I agree intel is responsible but AMD can't sit there and not even agressively advertise your product and then whine Intel stomp their face into the ground. Seriously Intel practically has AMD bent over the chair taking it up the rear while AMD cries for mama. They need to fight back aggressively market their product because the 37 AMD fanboys aren't going to make sales increase and all the people who don't know anything about AMD think that Intel is the best so given the choice they will choose Intel over AMD. (even if AMD goes cheaper Intel is much larger they can always drop their chips even lower to a point where AMD would have to produce at a loss to compete price wise) So the key for AMD to make any significant gain is to establish a brand name.

And for anyon in the process of making another post saying.. "So you think its ok for Intel to do cheat?" NO I DON'T so actually read my post this time and don't waste your time.

ONe last time - AMD doesn't have the capital necessary to invest millions in advertising. If they spent their profits, then they'd have less to show in terms if returns to its stockholders. Intel can spend much more money, and still show a reasonable rate of return to its shareholders. That's advantage one to Intel.

Intel also can offer deeper discounts of its products than AMD because of volume. Therefore, while Intel can afford to drop the price of a processor by 15% or more, AMD can only afford 5%, maybe 10%. So even though the Intel may cost more initially, the discounts drop its price lower than the AMDs to the OEM. The OEM passes on the normal retail price to the consumer, which means that their profit margins go up. That's advantage two to Intel.

When Intel runs its own ads as well as partners up with Dell and HP in massive TV as campaigns, they are utilizing their additional capital to buy up ad time that would otherwise be available to other companies. Consequently, even if AMD had the capital to run a full ad blitz, they would then face the dilemma of trying to find ad space after Intel snatched up most of it. So access to advertising opportunities is as much of an issue as access to OEMs. Advantage three Intel.

Finally, one of the best ways to promote a product is word of mouth - having customers satisfied with a particular company or product recommending it to their friends, family and coworkers. When Intel is establishing market quotas for its OEMs by linking discounts to the number of AMD units sold, they are limiting AMD's exposure to the market. That in turn limits the ability of consumers to tell others about their experiences with AMD products. After all, if you can't buy it, you can't recommend it. Advantage four for Intel.

It's not the simple, black and white issue you try to make it. There's other factors besides simply how much profit a company makes and what they do and don't do. that's why I just listed those four areas in which Intel has a distinct advantage over AMD. While only the market quotas really applies to the case brought before the courts, a ruling in AMD's favor could easily shift the balance of power towards them, thereby leveling the playing field and providing opportunities to address the other areas in which Intel has an advantage in.

Actually, that was a prefect example. Both Wal-Mart and Intel use their volume to their advantage. Because Wal-Mart buys in such large quantities, they can negotiate discounts that a local grocery store or general store couldn't possibly match. Because Intel sells in such quantities, they can afford to offer steep discounts on their CPUs, whereas AMD can't match those offers because they don't deal in the quantities Intel does. It's the exact same issue - uncercut the competition by offering deals you know they can't match.

its not illegal to offer deals you know your competition can't match, its competitive pressure, and capitalism encourages it..

I'm not sure if this has been posted, but here is the full text of the complaint:

http://www.amd.com/us-en/assets/cont..._Complaint.pdf

I think it would do the discussion a lot of good if everyone actually read the entire length of this first. There just seems to be so much misinformation floating out there.

I am reading it and I notice they use the term anti-competitive to refer to Intels efforts to eliminate AMD as a competitor, I find that funny. So in a sports competition... say boxing it is actually ANTI-competitiove to try and knock out your opponent. WOW Does anyone else realize that in its beginning Intel was strong-armed by a larger company into sharing its technology with AMD. By of all people IBM and they are also named as one of the companies strong-armed by Intel. Does anyone see the hypocrisy here? I still don't excuse Intels action but in all this deceit and lying I find it hard that AMD is the blameless angel. So far we only have one side of the report and anyone who has a brother or sister know that when one reports their side of an incident it is often very biased and leaves out important facts and details to give the whole picture. So I am not going to make any judgements until the WHOLE story is represented and if anyone has a link to somewhere where an objective source explains the history between the two companies till where they are today I would appreciate a link.

Also frankly I don't trust judges I wouldn't be surprised if Intel pays him off too so he will rule in their favor. Or this case may come to nothing if anyone else has been paying attention to news headlines this isn't the only case where a smaller competitor has sued the larger 'monopolist' I will be waiting for that link

It's not the price drops that are the issue here - it's the fact that Intel is tying those price drops to how many AMD systems an OEM is allowed to make. By doing so, Intel is placing artificial limits on the ability of the competition to grow market share. That's the core of the complaint, not the fact that they dropped prices below what AMD can compete with.

CollegeStudent,

I have also explained the relationship between Intel and AMD. When INtel was signing the original contracts with IBM to supply chips for its PCs, IBM required a reliable second source supplier. That is a common clause in such contracts, as it allows for an alternate source of a specified product if the primary supplier can't produce sufficient quantities. As a result of this contrract, Intel selected AMD to be the second source and signed a contract with them whereby Intel would share its reference designs and production technologies with AMD. Therefore, your contention about Intel being "strong-armed" is false.

When Intel released the 386 processors, they filed a suit against AMD to prevent them from making compatible processors anymore. After three years of legal wrangling, the courts ruled against Intel, thereby allowing AMD to continue making x86 processors. After having a good run with the K6-2 series of processors, AMD decided to make x86 processors that were not based on Intel's reference designs. That is where the Athlon line came into play. While the Athlons are fully compatible with their Pentium 4 counterparts, they are based on AMDs own designs. The ruling over the 386 series besically gave AMD the right to make x86 compatible processors until the end of the series' line (which is where the Athlon64 comes into play). I don't have one link, as this is based on what I have read over the last several years, and my knowledge of the history of both Intel and AMD.

I read that same information from the complaint, since it was supposed to be background information they tried to make it seem objective but throughout the whole thing there were subtle references to Intel being something evil... Like how you said
"IBM required a reliable second source supplier. That is a common clause in such contracts, as it allows for an alternate source of a specified product if the primary supplier can't produce sufficient quantities." The version in the document states IBM's reason for doing this was to prevent Intel from being a monopoly. I don't doubt it contains facts but it is a complaint and it is clear that everything said is to portray Intel in a bad light. Thanks for the info, what I am now wondering is since the original contract was with IBM if Intel starts supplying chips to other companies should they be forced to continue sharing. And when Intel filed the suit after releasing the 386 processors were they still even supplying IBM computers exclusively? And if AMD is supposed to be simply a second supplier (which means the competition should be in supplying cost not actual difference in technology) why would Intel file suit against them? As a second supplier it basically makes you a subcontracted manufacturer right? So was there some indication that AMD planned to use Intel technology make improvements then branch of to do their own thing? We may never have the full story of everything that happened but I would like to see what the Intel historians have to say about the early relationship and what exactly went wrong between the two companies.

I also think the idea of a second supplier is unfair. With Intel initialy being the company that does all the reseach and put money into development than AMD just gets a nice little package with all the information how could Intel maintain progressive development and still manage to produce the chips at an equivalent price to AMD? And when I said Intel was strong-armed into the deal I was referring to the fact that they probably would have wanted to be the single supplier but if they were to get the contract with IBM they HAD to get a second supplier, there was no choice so even if it was a common practice signing a contract that adds a clause you don't like but do anyway because your company needs the business is very similar to what Intel does today. They aren't technically forcing the companies but if the companies want to make more profit they have too. Anyway I was just stating a similarity I saw and thanks for the information about Intel and AMD.

Within six months after the IBM deal was signed, Xerox, AT&T, Wang, and severao other companies were making clones of the PC. When Intel sued to prevent AMD from making the 386, they used the argument that the IBM contract only applied to the original AT/XT and 286 processors. The courts saw it differently, and ruled that AMD had the right to legally make versions of all x86-based CPUs. Keep in mind that during the three years that this lawsuit was dragged throught the courts, that AMD could not produce 386 or 486 equivalents, because Intel refused to share the relevant information with AMD.

The reason that second suppliers are so common is that chip makers can be dramatically influenced by weather, supply shortages, etc. When most of the Malaysian chip fabs that produce RAM were wiped out in a cyclone, it took almost two years for RAM prices to drop back down because of having to build new fabs from scratch. When Intel was first getting into the PC business with IBM, nobody had chip yields that were even close to the success rates of today, because the entire fabrication process was much more rudimentary and used far less refined tools and materials. Compare the size of an Intel AT/XT core to the size of a Pentium 4 core, and you'll understand the differences in chip yield alone. At that time, CPU manufacturers also were using smaller wafers of silicon, making the total number of chips you can priduce at one time even less.

Even though Intel was giving AMD a head start by sharing the information, they still had the advantage of making more units. So even though AMD could make x86 processors for less than Intel, Intel could still discount them more by leveraging its volume to discount their CPUs at a price equal to AMDs prices. Here's the scary part: back when AMD was the second source, there was no processor branding on PCs like we have today. Therefore, the only way to tell if your PC has an Intel or AMD processor was to open the case and look at the CPU itself. It wasn't until Intel released the original Pentium that you began to see the "Intel Inside" stickers on every PC case.

There's a lot of things that were done in the industry that are not done today because of refinements in processes, equipment, and technology. But you have to look at the agreement Intel signed in 1982 with the mindset of the industry in 1982.