Perspective: Microsoft's message for AMD

First Microsoft. Now Intel.

The antitrust spotlight is about to fall on the other half of the Wintel duopoly. If you believe Advanced Micro Devices, Intel is guilty of abusing its dominant position to undermine would-be challengers.

So far, Uncle Sam's trustbusters are staying on the sidelines while AMD pursues a private lawsuit. We're still in the he-said, she-said stage, but the complaint against Intel does include quite a list of particulars. (Click here for a PDF of the complaint.)

For years, AMD was its own worst enemy.

I suppose you can discount some of this as old-fashioned spite. These two companies share a particularly bitter rivalry in which AMD has historically played second banana. Still, the lawsuit raises the possibility that Intel might have veered over the line separating hard-nosed salesmanship from illegal behavior.

Given the recent roll call of corporate wrongdoing, there's hardly a single American corporation that deserves the benefit of the doubt anymore. And in casting Intel as a predatory bully, AMD also invites fuller scrutiny of its own motivations.

For years, AMD was its own worst enemy. Under the stewardship of its flamboyant but feckless co-founder, Jerry Sanders, the company had a remarkable knack for disappointing Wall Street. With his white mane and tailored pinstripe suits, Sanders made for great copy, but his company remained a perennial underachiever.

The picture began to brighten only after Hector Ruiz came over from Motorola in 2000 as president. By 2002, Sanders got nudged into (long-overdue) retirement, and Ruiz got the opportunity to lead AMD back onto the right track.

Before long, AMD was enjoying increasing sales, higher selling prices and--gasp!--quarterly profits. What's more, the company stepped out ahead of Intel with the introduction of two decidedly superior products, the Opteron and the Athlon. Still, AMD couldn't translate that into lasting share gains.

Statistics hint at one possible narrative. AMD's unit share of the worldwide x86 CPU market was more than 20 percent in 2001. Last year, it fell to less than 16 percent--and this despite its tech leadership over Intel. Put yourself in Ruiz's shoes, and the necessary conclusion is that Intel was not playing fair.

We still don't know if that's true. Sometimes the best mousetrap does not win. (Despite having the best computer design in the business, for example, Apple Computer still has only a puny market share.) Nonetheless, AMD says it can back up its claims. For instance, in its complaint AMD offers the tantalizing suggestion that then-Compaq CEO Michael Capellas stopped buying AMD desktop processors only because Intel "had a gun to his head."

That one is tricky. Capellas allegedly made the comments in late 2000 when PC sales were falling off a cliff as the tech industry headed into a depression. Is it really a surprise that Compaq was hunkering down back then?

AMD's on firmer ground when it points to Intel's more recent entanglement with Japan's Fair Trade Commission. Who knows? If AMD can turn up a few incriminating e-mails during the discovery phase of the trial, then things could get more interesting.

But AMD's legal team might want to revisit the history of the Microsoft saga. While court pyrotechnics make for good headlines, you can't win lasting convictions for bad manners alone.

Biography
Charles Cooper is CNET News.com's executive editor of commentary.

More Perspectives

[mpotter28]

long weekend?

I assume that a long weekend is the reason for an article that basically says nothing (the conclussion seems to be that the legal system is a crap shoot)

[dysonl]

I Agree!

This article is pathetic. What was the author trying to convey, I have no idea.

What a waste of bytes!

[mixpix]

Message from Microsoft?

Is it just me, or did I not see a message from Microsoft...

[SeizeCTRL]

You Are Correct

I don't recall seeing any message from Microsoft either. This seems to be the usual drivel Cooper spills out. It's not that he is a bad writer, it's just he always comes off incredibily one sided with his biased articles. Right from the getgo, you had the impression he felt AMD was in the wrong with the lawsuit. Almost makes me wonder if Intel bullied his point of view ;)

Article title was very misleading.

Intel are guilty as far as I am concerned...

It's FACT that AMD have designed a far superior CPU compared to Intel. There's a BLATANTLY obvious hint on the Intel Website. The "Intel Application Accelorator".

Hardware manufaturers know that their hardware is able to do a particular job, and therefore they design it to function with other pieces of hardware the best possible way they can. Look at AMD, they don't need some cheapshot software patch to boost the performance of their CPU, they just know that it will work the best possible way that it can.

Intel on the other hand didn't do such a good job with the design of there x86 based processors and realised this after production occured. They then created this CPU FIX called the "Intel Application Accelorator" to try and resolve the issues they found in their own design. HAH!! Get out of that one Intel!

RE: Intel are guilty as far as I am concerned...

Just for your information, the Intel Application Accelerator is a ATA driver for select Intel chipsets not for the CPU. It is has the word "Application Accelerator" because it improves the performace with regard to hard drive reads and writes.

Here is the link for your reference.
http://www.intel.com/support/chipsets/iaa/index.htm

[Walt Connery]

Good point....

If AMD is AMD's worst enemy the Intel must have a death wish...;) It isn't AMD getting socked for anticompetitive trade practices by both the EU and Japan, and if Intel would try to sue AMD for the same thing AMD is suing Intel for the company would get laughed off of the face of the planet.

I've been using nothing but AMD since 1999 and found it so superior to Intel's offerings that I've never even been tempted to go back to Intel in all of that time. AMD's engineering is so much better than Intel's, in fact, that the *only* reason for AMD's stymied share of the market is laid out plainly for all the world to see in the AMD complaint.

It's as obvious as the fast-growing nose on Intel's face that Charles Cooper hasn't bothered to read AMD's 40+ page complaint. That's the only reason I can conceive of for him making the terribly uninformed editorial comments he's made--he's just pretending the complaint doesn't exist and completely trivializing it simply because it doesn't fit the his delusional picture of the world.

It's time to bring out the angry villagers, pitchforks and torches in hand, and burn Castle Intel to the ground. The monster Intel created is truly hideous to behold.

[Andrew J Glina]

Could be a riddle, or perhaps codified in some way

I have tried taking out every second/third/fourth word but it still makes no point. I will keep working on it.

[bodacious99]

oh really?

i think the point of the column is quite clear. the parallel with the MS antitrust case is something to consider with regard to the AMD-Intel spat

[robert1275]

Intel should settle this quickly

Intel would do well to settle this case quickly out of court and move on. When the CEOs and ex-CEOs of different companies are on the witness stand and start pointing the finger at Intel whatever legal points made otherwise will probably not be good enough. Intel's behaviour in Japan has already been proven as anticompetitive and another court case has been started there for the same reasons. The E.U. has also been examining Intel's behaviour in Europe

[bodacious99]

Settle?

dude, you're already talking settlement and we haven't yet seen a stitch of evidence. let's first settle on the facts of the case. and then decide what's going on.

Advertising Makes Marketshare

Of course, no one thinks that the only processor advertising the average people see is Intel. Does AMD even have an advertising campaign close to the scope of Intel? The Blue Man group, those familiar four bell tones, it sticks in the head, and people remember it. So, when they buy their computer, they'll want the one with those funny Blue dudes, or with HyperThreadedWhatchamathingy, because it's hyper... and stuff.

When I consult, I have to inform most of the people I'm trying to help that the AMD is better, they have 64 bit, it'll move into the next generation of OSes more efficiently, etc, etc, etc... because all they ever see is Intel this and Intel that.

That's part of why AMD doesn't have a better market share. If AMD wants bigger market share, they need to join the ranks of Intel, and actually Market to the teeming masses. Not product education, but "market". Just like Intel and MS. It's a dirty game, and the winners aren't always the best product. I do wish them luck in their suit, however.

[robert1275]

what good is marketing versus behaviour

If even half of what AMD has stated can be proven in court the marketing tools does not matter. Intel, according to the court filed documents by AMD, produces kickbacks and punishes comapnies who try and buy AMD processors. All the marketing in the world is not going to help you against this type of behaviour, if validated in the courtroom.

[gdmaclew]

Innovation Requires a Fair and Open Market

I have just read the entire complaint against Intel and if true is extremely damning.
I have been in the computer industry for 30 years and even I was blown away by AMD's allegations.
If Intel is proven guilty this is a major development.
To the general public, Intel "is" what the PC is...synonymous with computing. This is Intel's gameplan.
It has been said that Marketing is AMD's failing but how can you market when your competitor is poisoning the market and not playing fair (or breaking the law - if that's the case).
Marketing takes money and that money is generated from sales which apparently Intel has done everything in their power to minimize (or eliminate).

This is all about money and the various OEM's have also contributed - though not to the same extent.
By knuckling under to Intel's threats, they have stiffled competition as well. If they were truly interested in supplying their customers with the best bang for the buck, they would have individually and collectively told Intel to "take a flying leap".
Maybe now that it has become public they will.

AMD obviously has the superior technology. That has now become perfectly obvious over the past 2-3 years - witness the fact that that Intel has adopted their 64-bit extensions, something that Intel continually drummed into the public's head that they didn't need.
Intel has been passed standing still.
Believe it and live with it.
Intel is not king anymore. Big, yes. Technology leader, no.
That's the way the marketplace works - or is supposed to work on a level playing field.
I hope the courts do level the playing field. Imagine what AMD could do in that environment.

[pentium4forever]

Intel & AMD going at it again

AMD don't advertise quite as much as Intel. They do, but I guarantee not more. AMD has had more innovative breakthroughs with 64-bit technology which is the only thing I can remember they came up with off the top of my head. I heard they were doing better financially than Intel lately.