February 13, 2006 4:00 AM PST

Intel's mantra: Let's make a deal

Would you avoid buying a PC with an Advanced Micro Devices chip inside because it wouldn't let you host an Internet conference call with six of your friends?

Chip giant Intel is betting that at least some people would. Last week, Intel cut a deal with voice over Internet Protocol provider Skype that calls for the VoIP company to provide advanced conference-calling features exclusively on PCs that run Intel chips. As long as the deal is in place, it could effectively keep customers who want to take advantage of multiperson conference calls from going with AMD-based machines.

Though few would argue that a niche feature like that is going to be a deal breaker for most PC buyers, the importance of the Skype-Intel alliance goes well beyond VoIP conferencing. Indeed, it's the latest, and certainly most prominent, example of Intel's new take on marketing: Lock in software partners as well as the PC makers.

Intel executives have talked at length over the past few years about moving past a marketing strategy that emphasizes chip speeds and power above all else. Paul Otellini, now Intel's chief executive, got the new effort rolling in 1999 when, as executive vice president and general manager of the Intel Architecture Group, he created operating groups that focused on developing software and finding new uses for Intel's products, said Bill Kircos, an Intel spokesman.

Expect more of these exclusive pacts as Intel takes a brass-knuckles approach to its long-running feud with AMD, particularly as Intel's Viiv platform strategy of bundling home-entertainment software with its chips shifts into high gear over the next few months.

Intel executives believe they can use their considerable software resources to improve the performance of processing-intensive applications such as VoIP and home entertainment by working with software application developers to help them understand how Intel's chips process data.

In the process, moves like the Skype deal, which will run for a limited but undisclosed period of time, are a way to block AMD from landing customers who want to use applications such as Skype's 10-user conferencing.

Not surprisingly, AMD is already crying foul. AMD officials claim this is just another example of Intel using its sheer size to decide where AMD is allowed to compete, reinforcing the notion that Intel doesn't play fair. AMD charged in a 2005 antitrust compliant that Intel uses its marketing programs in a selective manner to punish companies who have used AMD's chips, or to reward companies like Dell who have cut exclusive deals with Intel--claims Intel has strongly denied.

Performance in the eye of the beholder
In the past, Intel has set its products apart and improved the performance of applications such as games by adding new hardware instructions to its chips, said Kevin Krewell, editor in chief of The Microprocessor Report.

But there are no specific instructions in Intel's current Pentium D or Core Duo chips that enhance the performance of VoIP applications, an Intel representative said. Skype is using an operation called "Get CPU ID" to identify the type of processor running on the PC. The Skype software has been preset to only accept Intel's chips as having the performance necessary to host conference calls of more than five people, the representative said.

Almost all applications running on any PC perform the Get CPU ID operation as the system boots, said Dean McCarron, principal analyst with Mercury Research. That operation determines what type of processor is in the system and what performance features are available to the application, he said.

Critics contend that if there are no instructions dedicated to VoIP applications in Intel's chips, it's unlikely that Intel's dual-core chips are demonstrably more powerful than AMD's when it comes to hosting VoIP conference calls. In fact, third-party reviewers gave AMD

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29 comments

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Shady
This kind of business practice disgusts me. This is essentially the same thing as Coca Cola not allowing Mc Donalds to sell Pepsi products (which if I recall correctly, was found to be an illegal marriage). This sort of partnership between two unrelated enterprises should be outlawed as it stifles innovation, discourages free trade, and is all around bad for the consumer.
Posted by njwashor (1 comment )
Reply Link Flag
Not shady
It is perfectly legal when you read & hear about exclusive deals!! As long as both side's sign an legal contract stating an exclusive deal between each others technology is legal also other company that is being pitched the deal can simply decline the offer & not sign any contract at all!!! Anyway if you read the article you would stumble by them saying several time's it is a limited time deal for an undisclosed time period!!
Posted by Intelrules (32 comments )
Link Flag
Boycott Skype and others that adopt Intel's practices....
I believe we should boycott companies that enter into such agreements with Intel.

While Skype was the first, well-known player in the VOIP for PC market, it is by far not the last.

No responsible software manufacturer would adopt such a strategy. It seems to me that Skype (a company that has yet to turn a profit) is getting desperate.

Unfortunately for them, desperation usually results in stupid moves that further harm your company.....like this one.

I have long been an AMD fan and this validates my choice even more. Long live AMD!
Posted by Jim Hubbard (326 comments )
Reply Link Flag
Firing off an email to Apple
I was planning to buy a new iMac Core Duo. Nope. Not gonna. I'll
stick with my old G4 until Intel drops this. Sorry, Apple. Get in bed
with ******, catch a nasty bug!
Posted by chassoto--2008 (71 comments )
Reply Link Flag
Now that's a bit radical....
... shoot yourself in the ass just to make a point that you don't like
a legitimate business maneuver by Intel. You're the one who is
paying the price. Apple won't miss you; there are just too many
other buyers to pay attention.
Posted by Earl Benser (4310 comments )
Link Flag
Intel's deal w/Skype is Pathetic
Intel a powerhouse of American technology and innovation should hang it's head in shame with it's latest gambit to try to stunt AMD with it's exclusive deal with Skype. This pathetic manuever tells the world, if you can't beat them with a superior product, box em out by playing the 800 pound gorilla routine, a la Microsoft. Andy Grove, where are you ?
Posted by Ljanicek (3 comments )
Reply Link Flag
Good for Intel - Dumb for Skype
As a regular Skype user I think it is a dumb move. I can have a group of 4 on with any CPU so why would I bother buying an Intel CPU system just o get another 2?

For Intel it gives them a bit of publicity and bragging rights but unless Intel gave them a bunch of money I don't see they point for Skype.

There will soon be OpenSource versions that don't rely on centralized web sites so Skype should keep all their options open. Their mistake.
Posted by (13 comments )
Reply Link Flag
it stinketh :-)
this news makes both intel and skype look bad. How shameful.
Posted by df561 (94 comments )
Reply Link Flag
Microsoft can kill INTEL in a flash for being in bed with apple
the code
if(CPUID matches "INTEL") P
//you little bastard, sleep with Jobs
say("Sorry, your CPU is slow and dumb, only 5 Windows can be opened");

}else {
say("Welcome to Windows, unlimited Windows");
}

<a class="jive-link-external" href="http://sharikou.blogspot.com/" target="_newWindow">http://sharikou.blogspot.com/</a>
Posted by sharikou (106 comments )
Reply Link Flag
Sure....
... and if the do, it's called a Pyrric victory.
Posted by Earl Benser (4310 comments )
Link Flag
Just another reason
for AMD to justify their claims that Intel is trying to stiffle its competition. i hope they win that lawsuit. Just like the deal with apple, im sure Intel hooked Skype up with 100's of millions of ad dollars :)

Intel - Bad
AMD - GOOD
Posted by SystemsJunky (409 comments )
Reply Link Flag
re: Just another reason
fire BAD
beer GOOD
Posted by J_Satch (571 comments )
Link Flag
Well, geuss I won't be buying that new computer...
I had almost talked myself into the 3 ghz range and was ready to make the switch to Intel from AMD...

Not with garbage like this going on! Forget Intel AND skype! Who needs them!!!
Posted by chhooks (21 comments )
Reply Link Flag
AMD should quite complaining...
... and make its own deals. There are many other VOIP options out
there waiting of for effective conference calling (I think). Or AMD
could just engineer an alternate approach that neutralizes Intel's
edge. Complaining gets nothing done.
Posted by Earl Benser (4310 comments )
Reply Link Flag
Okay...
Yet if this was microsoft making more deals, I have a feeling you would be singing a different tune. Smart move on intel's part, they have to offer something exclusive since they are lagging behind AMD in performance and efficiency atm. This could change this year, but with the M2 chips coming out and intel releasing its new stuff, it should be a fun year for hardware.
Posted by Rolndubbs (194 comments )
Link Flag
RE:
amd only knows how to complain thats all. They are too dumb to do anything about it also amd keeps shooting themselves in the foot by consistently accusing Intel of unfair business practice's when they get the best contract possible. amd keeps on undermining their suit against Intel. amd is just a tiny little cry baby that cannot act on a competitors exclusive deal for a limited time.
Posted by Intelrules (32 comments )
Link Flag
I'm okay with it...
Just as long as Intel and AMD are both making processors, it's fine by me. As long as we are still pushing for better and better I see only progress.

From what I've read, AMD still has stronger processors then the Core Duo. AMD practically created the market for 64 bit processors and Intel is still trying to catch up after many failed attempts. The AMD architecture is much stronger and has more potential then Intels. But really, all of this is nothing compared to IBM's Cell processor that can have up to 16 processors ("cells") and is equivalent to a 25gig P4 (That's right, a 25 ghz Pentium 4 Processor). Personally, I'm more interested to see how well the Cell Processor performs in the PS3 and what IBM plans to do with it after that.
Posted by coryschulz (326 comments )
Reply Link Flag
Honest question....
Previously, there have been comment that the Cell is okay as a
game machine processor, but it is the wrong design for a computer
pprocessor. Now you note that it is apparently the equal of a 25
Ghz P4. I assume that that's a 25 Ghz P4 in a PC, with unspecified
bus speed. But what details can you offer to substantiate the
equivalency?
Posted by Earl Benser (4310 comments )
Link Flag
Lets make a deal/screw people over
Pathetic. Intel, instead of actually making GOOD CPU's that can beat AMD, decides to try and bully people into buying its inferior rubbish by using its cash reserves to restrict full use of certain programs to Intel. Fair do its only Skype today, but whats next? Intel only games/other apps? These corporate pricks really do annoy me sometimes.
Posted by atomicpineapple (1 comment )
Reply Link Flag
SkypeOut Balance Gone!
I guess they know I have a PowerPC Mac due to my software
version. I made a call about two weeks ago and had a balance left
when I hung up.

Today, my balance is zero. So, I lost about $10 because I don't
have an Intel chip?! That's terrible business!
Posted by TheTSArt1 (16 comments )
Reply Link Flag
 

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