RSSAMD CEO: Intel Is a Monopoly, Microsoft Isn't
By Scott M. Fulton, III | Published June 21, 2007, 3:09 PM
In a keynote address this morning to the American Antitrust Institute in Washington, D.C., AMD CEO Hector Ruiz gave attendees what he described as "an idea of what it's like to do business day in and day out when you are competing against an abusive monopolist." Although he also invoked the phrase "illegal monopoly," he left a convenient 846-word buffer zone between that phrase and his first invocation of the term "Intel."
"I do not need my fortune teller hat to tell you one truth about which I am absolutely certain," Ruiz told attendees, "There is no proper or defensible place for illegal monopolies in the 21st century global marketplace...My purpose is not to argue for competitive advantage - we know how to compete. My purpose is to lay out the facts so that law and economics can do their job to protect consumers."
When a certain unnamed monopolist is permitted to do business as it wishes, Ruiz explained, its competitors may be more efficient and more innovative, though it cannot form partnerships and engage in cooperation with other players in the market. "All of that yields the one outcome antitrust law is designed to prevent," he continued, "consumers suffering at the hands of a monopoly by being forced to pay higher prices for what are all-too-often inferior products."
Evidence of that inferiority, he stated, comes from the fact that desktop computers have not fundamentally changed in the last decade-and-a-half, except perhaps for the introduction of flatter monitors and wireless connectivity.
When new laws brought an end to monopolies such as Standard Oil and the original AT&T, Ruiz' speech went on, a multitude of players were enabled to enter those markets, creating not just more competition but more cooperation and innovation. New players could enter markets and compete on a level field.
For instance, he cited, "Google, Microsoft, and computer manufacturers like HP and Dell all owe their existence to the simple fact that competition replaced forced exclusivity and allowed a variety of players to compete and succeed."
Only after Ruiz mentioned those four names did he invoke the dreaded "I" word.
An iSuppli quarterly report issued in April showed Intel was responsible for having earned 80.2% of the world's global sales of microprocessors, with AMD earning 11.1% and smaller players the remainder. Though this is down from a high of 86% for Intel in the first quarter of 2004, it's a sizable 4.5% gain over the previous quarter, and a drop of 4.6% for AMD over the same quarter.
US law does not explicitly specify how much share a manufacturer must have of a given market to qualify as a monopoly. However, it does not stipulate monopolies to be illegal either, as so many discovered over the course of the Microsoft antitrust trial. Being a monopoly means a company has certain extra responsibilities to maintain and ensure competitiveness, and prevent erecting barriers to entry for competitive players.
Ruiz cited examples of both upheld and alleged anti-competitive behavior on Intel's part, including findings that it paid for exclusivity rights among Japanese computer manufacturers, Intel's alleged exclusivity deals with German retailers (which is the subject of AMD's antitrust suit against it in the US), and a shareholder lawsuit against Dell alleging that company received $1 billion per year in rebates from Intel prior to its decision last year to end its exclusivity arrangement and do business with AMD.
But analysts credit Intel's recent market share gains over AMD to its introduction last summer of far more competitive processors at price points that were near to, or lower than, AMD processors - in many segments of the market, for the very first time. Recent performance tests from respected independent sources show Intel has not yet ceded that price/performance lead, though its margin has slimmed somewhat since last year.
In a recent conference call with AMD senior vice president Henri Richard, he advised reporters to no longer expect any one company -- Intel or AMD -- to hold the performance lead in CPUs for any more than a six-month stretch.
But in response to a question as to whether AMD now considers itself in a performance disadvantage against Intel, Richard alleged that Intel was being anti-competitive not because it failed to be innovative or was overcharging customers, but that by his description, Intel had decided to release a major new series of CPUs that it was not prepared to sell in volume.
"Our competitor, because they were under such duress given our leadership in the marketplace, elected to announce an architecture in the middle of last year that was not available in volume," stated Richard in April. "So what you had was a lot of hype around Core 2 Duo and a lot of Pentiums [that had reached their] end-of-life in the marketplace. So I'm confronted into a situation where, who am I competing against? A product that's being talked a lot about but that's not available, or a product that's being dumped because it's end-of-life, running too hot anyhow, and why should I chase that product down?"
As Richard put it, AMD was faced with a situation where it had to decide whether its Athlon 64s, Athlon FXs, and Opterons were to be price-competitive with the new Core 2 Duos or the older Pentium Ds, which were then being phased out.
"We found ourselves with a single product line," Richard continued. "We're not in that product transition, and frankly, in some case, at a disadvantage because it made no sense to devaluate our products to compete against old Pentium products. But on the other hand, I needed to be competitive if I was actually sold against the Core 2 Duo, which was a much better product than their preceding generation."
But this is not the same story Hector Ruiz told attorneys at the American Antitrust Institute conference this morning.
"The IT industry is being held hostage by Intel," Ruiz proclaimed, "a fact that has detrimental effects across the board, and it has gone on for too long. Consumers are punished by less choice and innovation, and higher prices.
"Some of you know enough to agree with me," he closed. "Some of you do not know enough yet to decide. But all of you should agree on this: There are serious issues about the microprocessor market that need to be examined without taint of politics or ideology. Your devotion to the enforcement of antitrust law makes you ideal candidates to assume this responsibility. Not for me. Not for my company. But for the values for which you strive - competition, choice, consumers."
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|There was no misleading information on Intel's part - they just built a better processor. Building something that works swimmingly doesn't mean they're taking advantage of a market - it just means their product performs better on every level.
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|I believe the suit regards Intel's actions during the early dyas of AMD (back when Cyrix was still kind-of in the game).
I worked for a computer manufacturing company at the time and we had several memos indicating exactly what AMD is claiming. Intel lowered our prices dramatically so long as we would not use AMD or Cyrix CPUs in our systems. If we did, it was a sure bet we'd be out of business in weeks because the Intel CPUs would have cost a fortune.
It is my understanding that they've stopped most of that by now, but for anyone who wanted to add AMD to the list in the early to mid 90's, it was an all or nothing deal.
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|AMD missed the point. MS is definitely the darkest monopoly as she never allows competitors to release an OS to run Windows applications perfectly.
Intel did try to innovate in the past years, but AMD just stopped them. Intel developed Itanium to replace aging x86, but AMD and MS teamed up and stopped Intel with x86-64. Pentium 4 was not designed to live that long.
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|Instead of complaining that their vagina hurts, maybe AMD should re-group,go back to the drawing boards, and figure out how they are going become a competitor again. So, Intel has made some better business decisions than AMD and AMD has surely paid the price. Maybe it is time for AMD to lay everything on the line again like they did with the Athlon 64. That was the best decision that they ever made. Without it, we might still be stuck in the 32 bit world.
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|a la verga con todo esto
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|AMD, Intel has you beat just fess up instead of throwing alligations. I have AMD processors in 2 of my main computers at home but at work its all Intel and trust me its SUPERFAST.
You have lost the race, just merge and let it truly become a monopoly.
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|Now there's an informed opinion...
"Fords suck, Chevrolet's are better cause they're better than Fords."
"PS3 rulez dude, cause Xbox 360 is loud and crappy"
"Ipods kicks butt because everyone else sucks"
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|AMD were sitting on their collective butts for over 4 years when they had the best chip in the market in Athlon. Intel stumbled from one mistake to another with the Netburst architecture but finally came up trumps with adopting an integrated memory controller, an efficient branch predictor and cache management architecture for the Core series. AMD's response? Cut pricing and dig into the already shallow corporate reserves. Not to mention buy ATI and screw themselves over with corporate restructuring.
Meanwhile Intel invests heavily into R&D and comes up with 32nm and high-K transistors for better power consumption and greater efficiency.
AMD's response, go to the talk circles and cry wolf. Sure, Intel did adopt predatory marketing practices but AMD should have raised a big stink about it then and not now. They should have aggressively pursued Intel then and not whine right now. Now they are in a situation where I heard they are planning to sell off their fabs in Austin and Dresden and go fabless. I also hear that they are also being sought after by investment companies and hedge funds for a majority stake. Looking at their history, AMD shot themselves in the foot and all the while Intel was a mere bystander to the situation.
I was an AMD fanboy and was with them ever since their K3 processors were out. I built systems right from the K3 450 to the Barton 2500. Not any more. You can only be with the minnows for so long as they are fighting the good fight. Once a company loses it's engineering core values it's time for goodbye. So long AMD. I hardly knew ye.
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|As a former employee of a key supplier of assembly equipment to both Intel and AMD, it's easy for me to see why the tables have turned so far against AMD.
I have visited both companies' factories in Asia and there is a tremendous difference between them. Clearly Intel is head and shoulders above AMD in all facets of manufacturing. They practice "copy exact" principles andare so far more efficient and mature that it's plain to see even from the untrained eye.
That Intel strigently adheres to their core manufacturing philosophies(often at times to the chagrin of its suppliers) has enabled them to produce the same basic components in terms of manufacturing processes at a greatly reduced cost. By doing so, Intel has been able to afford to focus on capacity expansion, development, and marketing, especially name recognition.
I'm not an expert on processor performance; I want my PC to work as advertised. As a consumer, my preference has always been toward Intel because of their overwhelming presence in the market. Their success is largely driven by their culture, which in my book does not constitute a monopoly. Either eat or be eaten.
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|AMD is going bankrupt and so they are attacking Intel and kissing Bill Gates b**t ... They think to be smarter this way just because Gates and Microsoft are the untouchables ones while Intel could be ordered a split up by judges if AMD CEO convinces "uncle Bill" to go the gifts route to kill Intel...
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|If you want to do business in the USA you had better get used to the feel of slime and the taste of corruption.
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|Because there's not a single business in the US that has any integrity?
Give us a break.
If you live in the US, please leave.
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|His company must have no integrity what so ever.
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|He's a Clinton/Obama fanatic elector that wants "to save the world from the bad Republicans and Bush" .. well, he's noglobal '68 neo-communist stuff,indeed...
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|When there are money on the line, there will be corruption, regardless what kind of business.
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|I don't care much what processor is in my PC as long as it does what it is supposed to do.
I've had 2 AMD boxes and probably 10 Intel boxes.
The Intel boxes always ran faster and quieter. That did it for me. :)
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|If the roles were reversed who would be crying. Welcome to the the wonderful world of capitalism. You either compete or you die.
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|AMD does sucks in the earlier year, however they get better when Athlon was introduced. What was happened during that period Intel forbid competition by off manufacturer such as Dell with deep discount if they use Intel exclusively.
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|The key word in your statement about capitalism is 'compete'. The theory of capitalism may work well if there are enough number of providers for a certain good or service. The providers may compete with each other and the market may balance itself. In AMD's case, AMD claims they cannot/couldnot compete fairly because of unfair market practices of Intel where they attempted to setup a monopoly.
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|The thing that must be so frustrating is that a 7 year run of having the best processor on the market at the best price compared to Intel. They managed to only get 20 percent of the market. That was it, now Intel finally got a competing product out the door and instantly within months Amd's momentum is gone and they are now losing the little bit of market share they had.
I am not quite sure what the problem is, Intel just has the household name. People ask for it and look for it like they do windows. To most people Amd sounds generic and a mystery, like Brand x or something. So company's give what customers ask for. Just like windows and microsoft. Not much you can do. If linux wasn't free they would also be bankrupt right now, you just can't compete with someone who has 80 percent plus market share. Mad marketing with all oem's on board pushing your products.
I must admit I was an amd fan and while they had the suprior product I bought them, but when core 2 duo came out I was there. So can Amd survive? who knows, I hope they do for the industry's sake. I am sure Intel will be found guilty in the trial, even Dell has already gotten into trouble for this, so its already a known point, think Intel will get off just like Microsoft did? time will tell.
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|The whole Intel Inside thing had been over with for quite some time by the time AMD released their AMD64 processors. The main reason people still bought Intel processors even though AMD's processors were better in every way is because most people read marketing materials instead of tech speak.
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|How true!
I have come to realize that People will follow the marketing propaganda because people are like sheep ! lol
I just baught me a AMD Athlon 64 X2 5600+ Windsor 2.8GHz on a new build because of the price ...........
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|Jerk.
Prices dropped about a week after I bought my 4400+. Talk about harshing my mellow.
*grin*
Caffeine, the cause of all kinds of wonderful, unpredictable, and often disturbing mood swings.
Life would be so dull without it...
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|Someone forget that Microsoft Windows is located in 99% of home PCs sold in commonly known computer companies? I only know of Dell selling Ubuntu/FreeDOS pcs. Both AMD and Intel chips are present in the products of these same companies. I can assure you that if I picked up a computer advertisement in my newspaper, I would see the acronym AMD before I see the words Ubuntu or SUSE. Who is the monopoly again?
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|I only know of Dell selling Ubuntu/FreeDOS pcs.
Free OSes aren't sold. Anyone who *buys* Ubuntu needs to have their head examined.
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|What's that say about Windows and Mac when people are willing to pay for the free $h!t. LOL
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|It says the average user has more important things to worry about and to not live at home with their parents in the basement because they tout something as free but spends hours upon hours getting drivers compiled and making applications and hardware work.
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|I only know of Dell selling Ubuntu/FreeDOS pcs
There is a good reason for that look at the average windows user they need everything dumbed down so it is just point and click and when something does go wrong most companies have dumbed down documentation with plenty of pictures or in the case of my IPS they even have a detailed video showing people how to set up outlook to their email.
Unless linux comunities have changed since i've looked at the suport forums and it has been a while but almost all average windows users i know will end up looking like a deer caught in the headlights the instant they see geek speak and not understand what to do.
So hear is a question is Microsoft realy a monoply or is it the user base that makes it seem that way and think of Windows and Linux as car makers the Windows car comes preasembled all you have to do is turn the key and go The Linux car is more of a do it your self typle deal only those willing to learn would pick the Linux car and how many places would sell the Linux version knowing knowing it will just take up space since the demand is low.
Microsoft may have abused its power in the past but the last few years i would say they are playing fairly nicely people camplain about how long it takes Microsoft to patch things but consider whats taking so long they test as much as they can to make sure that patches break as few as posible competing pieces of software.
Yaya call me a windows fanboy just remember the big picture for why Microsoft is in the position it is in now just like car owners people do not care whats under the hood just as long as it runs and thats the group Microsoft targets.
As for the article thats just sour grapes AMD did have better chips out there and where gaining market share then Intel came out with something better so naturaly the marketshare went back towards Intel all AMD has to do is come out with something better and the s*** will be towards them again since other than Apple does Intel have any other exclusive Intel only system builders anymore?
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|The verb "selling" here refers to the noun "pcs" and not to the modifier "Ubuntu/FreeDOS"
PCs are in fact sold.
Matter cleared up. Grammar learnt.
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|Hey! Be nice! ;-))
We keep hearing from the legions that Linux is about to take control of the desktop!
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|Wouldn't it be nice if the erudite MS users "hear" knew what a spell and grammar checker was!?
...Far from calling you a "Windows fanboy", just where did you learn English? Start typing this in Word and use the built-in spell and grammar checker - or get Firefox and learn what a plug-in is.
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|Oh no it's the spelling and grammar police like i realy care in my free time i like to type carefree.
So here is a suggestion if you see my screen name on top of a post just skip past it or if you are going to read don't complain.(there simplified it for you)
Plus why would i use Firefox when IE7 in Vista is better(the xp version was still buggy last time i tried it about 3 months ago) or atleast i find it to be better since Firefox crashed to often even with default settings and no plug-ins(thou i haven't tried Firefox 2 yet)
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|in my free time i like to type carefree.
You meant "slaughter the English language", right?
Is it really that hard to use punctuation?
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|I slaughter it every day M8
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|Proof that some people just can't be taught. :p
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|YES I AM SLOW :=)
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|...and now he's yelling. :p
Let's see... Slow, can't spell, can't punctuate, no grammar... Must have been edumacated in the US. :p
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|Whats the fun in that when spelling and grammar nazis are like hardcore religous people when they see something they don't like they start foaming at the mouth and have to tell you everything you do wrong.(and yes i do find it fun irritating those type of people)
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|I understand the joy of irritating the power tripping, but making yourself look like an idiot in the process just doesn't seem to have that much of a draw for me.
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|Your reply doesn't really make sense, unless you were replying to "What's that say about Linux when people would rather pay for Windows and Mac."
Just an observation:-)
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|Gotta admit, he's right. You're usually on it, but that one slipped by ya, bud. :)
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|"Ya, in a statue like florida were edumakation is rilly down write pitiful!"
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|You should edit your post so peoeple stop "camplaining" about it.
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|"There is a good reason for that look at the average windows user they need everything dumbed down so it is just point and click and when something does go wrong most companies have dumbed down documentation with plenty of pictures or in the case of my IPS they even have a detailed video showing people how to set up outlook to their email."
Translation:
Average Windows users are complete morons.
There, short, sweet, and to the point.
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|An idiot perhaps however unlike most posters here i give reasons for my way of thinking(notice all the examples I give for my way of thinking)when i could have been like many here and just posted something like
Microsoft isn't a monopoly Linux users are just the hippies of the software era wanting everything for nothing and expecting everyone to support them.(followed by links to the EC ordering Microsoft to remove the media player and complaining about how Microsoft charges to much for its protocols)
See an idiot maybe but not realy any worse that the others here.
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|Heh.. Comparing anyone to the masses would make them look better.
Using punctuation would make you look even better. :p
Not being a jerk. Hard to tell sometimes, I know. ;)
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|Ouch.
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|His point was that no-one else was selling computers with free operating systems on it.
Several of them sell computers with *no* OS on them.
Anyone "selling" a computer with Linux on it is selling Linux. Don't believe for a second they're not charging you for the installation.
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|I've been a regular on this site for years(not normaly a poster)and can normaly tell when you're joking.
You are one of the more funny guys on this site.
Trust me i used to be a lot worse instead of breaking it up a bit it used to be one big sentence.
but then even i didn't want to re-read it to make sure I included all the points that I wanted to make:)
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|lmao.
You know it's bad when you can't stand reading your own posts. :p
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|if amd sold software, he'd be screaming that microsoft was a monopoly. better off improving his product. for several years they proved that a better product will sell and they gained market share. he needs to get back to that. i guess when you don't have the product, you can always go to court.
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|100% agree.
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|He has a fortune teller hat?
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|Welcome to being the center of criticism from all forums worldwide, Mr. Ruiz.
Seriously, he just made himself a target from just about every direction. Bad timing on this as well, IMO. Even if he's right.
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|AMD had all the chance in the world become a monopoly like Intel. But they weren't as aggressive as Intel to get ahead. Just like Apple and M$ back in the late 80's early 90's. But the fact of the matter is that Intel makes faster chips and that's all there is to it. Until AMD brings in new chip technology and surpass Intel in speed, energy efficiency, price and PR. Intel will remain king of Silicon Valley.
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|Until he produces better processors than Intel he should shut the fu** up really shouldn't he...
(P.S: and i'm an AMD fan boy!)
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|Captain obvious here. Yet, it does seem like Intel gets away with much more than Microsoft.
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|Well I understand where he's coming from, Intel agressively competes to have their processors in Apple as well as PC's and most of the servers in the world and no one talks.
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|A monopoly has no "competition". So what's your point?
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|Intel didn't compete to get their processors in Apples. They used to run Motorola then they went into IBM now they went to Intel, what they ran before Motorola if it was different, i am not sure.. I don't think AMD was ever really a thought.
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|Apple's first chip was a MOS 6502 built by Commodore. This was the same chip used in the Commodore Pet and the VIC 20
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|ABSOLUTELY!!!
One sentence sums it up.
Does that mean AMD does not beleive they are a competitor to Intel now?
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|So that means Apple, Linux, Sun, et al. do not produce competing Operating Systems for Microsoft's?
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|"So that means Apple, Linux, Sun, et al. do not produce competing Operating Systems for Microsoft's?"
Not according to far too many of the rocket scientists on this site!
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|"A monopoly has no "competition"."
Actually, that has little to do with the actual definition of a monopoly.
But AMD's crocodile tears are a bit much.
Quit crying and compete.
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|Monopoly does not mean NO COMPETITION. Microsoft was ruled a monopoly but you can put quite a few different OS's on a PC and if you extend the definition further you can buy a Mac or a Sun Workstation, etc.
As the article state U.S. law doesn't specify EXACTLY how much market share a company must have to be declared a monopoly... something that caused MS a great deal of frustration during their trail. A good rule of thumb however is if you have > 50% market share and more then twice that of your nearest competitor... you're at risk of being declared a monopoly.
Intel could easily be declared a monopoly with > 80% share. Again though as the article states it's not illegal to simply be a monopoly, it just means they'd have to obey more rules in order to prevent them from harming competition.
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|One of the many wonderful reasons I love coming to this site on a daily basis... tech news with humor! :)
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|You bet. Its darn right funny.
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|If you own the market and you decide to bribe companies using your software/hardware to keep using it (HUGE volume discounts for exclusivity rights - Hello Microsoft :D or HUGE volume discounts for exclusivity rights - Hello Intel! :D) then this is abusing your power as a monopoly. You have deep pockets, you can outprice the competition in a secret deal until the competition goes away. This is NAUGHTY, folks. Ranting about crocodile tears is pretty pointless when the facts are in and AMD is being reasonably truthful.
As for Apple, Linux, Sun, et al competing with Microsoft's desktop OSen...well. Who will supply different OSes for home users and incur a huge bill for one of the OSes, when they can simply only supply Microsoft and get a huge discount, ie no huge bill.
Still. MS made a little bit of a ****up with Vista, let's see if anyone leaps up to try and take their crown...
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