Advanced Micro Devices CEO Dirk Meyer on Wednesday addressed the latest antitrust lawsuit filed against Intel, saying his company's claims about Intel's alleged illegal behavior have been "ratified" worldwide.
AMD CEO Dirk Meyer addresses analysts on Wednesday.
(Credit: AMD)"We've said for a long time that our success in the marketplace was hampered by anticompetitive behavior on the part of our competitor [Intel]," Meyer said. "And I think it's clear over the last 12 months that we've seen our statements be ratified...by regulators around the world. We've seen action in the EU take place this year. And just last week we saw the action of New York State's attorney general office," he said.
Meyer made the comments at the AMD Financial Analyst Day, which was streamed live from company headquarters in Sunnyvale, Calif.
"As you know, we have a court date scheduled in March," Meyer said. "So, in summary, I'm looking forward to a future in which our ability to succeed as a business is really governed by the quality of our products and the quality of our customer relationships. And I can tell you that hasn't always been true. But in the future that will be increasingly true. So, access to customer demand is key. "
Intel declined to comment.
New York Attorney General Andrew M. Cuomo filed a federal lawsuit against Intel earlier this month accusing it of paying computer makers rebates to illegally maintain its monopoly power and preventing AMD from gaining business with PC makers.
In a similar case earlier this year, the European Commission fined Intel $1.45 billion, alleging illegal rebates to PC makers such as Dell and Hewlett-Packard. AMD also made analogous allegations in its case filed against Intel in June 2005 that is slated to come to trial in March 2010.
And this may not be the last major case filed against Intel that makes these allegations. The Federal Trade Commission may also bring charges against Intel, according to reports.
On the heels of announcing its acquisition of 3Com, Hewlett-Packard also gave a sneak peek at its fourth quarter earnings.
Though not scheduled to officially announce earnings until November 23, HP said Wednesday it expects to report revenue of $30.8 billion for the quarter on earnings of 99 cents per share. (Excluding one-time charges, it would have earned $1.14 per share.) While revenue was down 8 percent compared to the same quarter a year ago, earnings were up from 84 cents per share in the fourth quarter of 2008.
Analysts were expecting earnings of $1.12 per share and revenue of $29.8 billion.
"Solid execution drove exceptional performance for HP this quarter, fueled by significant growth in China," HP Chairman and CEO Mark Hurd said in a statement Wednesday. "We are delivering on our strategy and are well positioned going into 2010."
The company also raised its outlook for 2010. For the first quarter, HP is estimating $29.6 to $29.9 billion in revenue, and earnings between $1.03 and $1.05 per share excluding 13 cents per share of after-tax costs and charges related to restructuring and acquisitions.
Hewlett-Packard said Wednesday it plans to acquire 3Com, maker of network switching and routing products.
The deal is valued at $2.7 billion, or $7.90 per share. HP says the purchase is intended to boost its networking business, particularly in China, where most of 3Com's business is focused.
"By combining HP ProCurve offerings with 3Com's extensive set of solutions, we will enable customers to build a next-generation network infrastructure that supports customer needs from the edge of the network to the heart of the data center," Dave Donatelli, executive vice president and general manager of HP's Enterprise Servers and Networking business said in a statement.
3Com President and COO Ron Sege said he hoped that combining with HP's scale and large sales organization would allow him to get his products to more of the market quicker.
"I want to be able to grow faster...now we're going to have it," he said.
In addition to focusing on different geographic regions--half of 3Com's revenues last year came from its China operations--the two companies have little overlap in terms of products, which should make the integration of the two businesses simpler, Marius Haas, HP ProCurve Networking senior vice president and general manager, said Wednesday during a Webcast.
HP CEO Mark Hurd discusses his ambition to have a full 'stack' of IT technology at a Gartner conference in October.
(Credit: Stephen Shankland/CNET)The 3Com deal is the most recent in a string of enterprise-related acquisitions HP has made in the past year, including most recently file serving software maker Ibrix. HP wants to be a leader in providing customers with an integrated stack of computing technology ranging from servers and storage at the foundation all the way up to services, Chairman and CEO Mark Hurd said at a Gartner conference in October. But to be competitive these days, a company has to fully commit to each element of the stack.
"You can't be in any one of them as a hobby," he said. "Compared to any competitor, you have to bring a combination of low cost and total cost of ownership, supported by innovation."
The 3Com buy should position HP in position to compete better with Cisco, the largest presence in the networking and routing market. In response to 3Com's acquisition by HP, Cisco released this statement: "While Cisco has a healthy respect for all of our competitors, acquisitions in our industry only validate the fact that networking is becoming the platform for all forms of communications and IT. As the leader in the networking market, Cisco is very confident in our business strategy, commitment to product innovation and ability to provide strategic business value to our customers in a highly competitive marketplace."
The 3Com deal is expected to close in the first half of 2010. HP stock barely registered the news, inching up 0.08 percent to $50 in after-hours trading Wednesday. 3Com's stock rose 5.18 percent to $5.69.
CNET News' Stephen Shankland contributed to this report.
This post was last updated at 3:40 p.m. PT with comments from 3Com and HP.
Logitech, a maker of Webcams and other peripherals, said Tuesday it will acquire LifeSize Communications for $405 million in cash. The move puts Logitech into the video conferencing market.
LifeSize offers high-definition video-conferencing systems. LifeSize's customers range from small and medium-size businesses to large companies. I've tested out a few LifeSize systems and found them to be solid systems for the money.
The move by Logitech means that most of the standalone video conferencing players have been acquired. Cisco is planning to buy Tandberg but is having some trouble. And once LifeSize is off the board, Polycom will be the last player standing.
Read more of "Logitech gobbles up LifeSize; Enters video conferencing" at ZDNet.
Adobe Systems expects to cut 680 full-time employees, or about 9 percent of its global workforce, as the company tries to align costs in the face of lagging sales.
The layoff, which was disclosed Tuesday in a regulatory filing with the U.S. Securities and Exchange Commission, marks the second wave of job cuts in the past year. In December, the company said it would slash 600 jobs amid less-than-anticipated demand for its recently launched Creative Suite 4 series of products.
The cuts will affect only those workers who were Adobe employees before the $1.8 billion acquisition of Web analytics firm Omniture in September. They are separate from an earlier-announced 9 percent workforce reduction within the Omniture unit, which had about 1,200 employees at the time of the acquisition.
Adobe, which is best known for its Photoshop and Illustrator software titles, said it expects to record about $65 million to $71 million in pretax restructuring charges.
"Adobe is restructuring its business to align costs with its fiscal 2010 operating plan and budget, the company's three-year strategic priorities, and the realities of the business environment, as well as to ensure its ability to continue investing in long-term growth opportunities," Adobe said in a statement.
In September, Adobe reported that its fiscal third-quarter profit fell 29 percent amid declining sales.
The European Commission on Monday formally dug in its heels over Oracle's planned acquisition of Sun Microsystems, but Oracle accused the regulatory body of "profound misunderstanding" in a rebuttal that declared its intention to fight the opinion.
The regulatory body issued a statement of objections about the merger, according to a Securities and Exchange Commission filing from Sun Microsystems. The open-source MySQL database software is the sole issue of concern in the matter, Sun said in the filing.
"The Statement of Objections sets out the Commission's preliminary assessment regarding, and is limited to, the combination of Sun's open source MySQL database product with Oracle's enterprise database products and its potential negative effects on competition in the market for database products," Sun said in the filing.
Oracle, though, fired back immediately, saying the objection "reveals a profound misunderstanding of both database competition and open-source dynamics." And indicating that other technologies are in limbo during the European deliberations, Oracle said, "Oracle's acquisition of Sun is essential for competition in the high-end server market, for revitalizing Sparc, and Solaris and for strengthening the Java development platform."
Meanwhile, the U.S. Justice Department reiterated its stance that the acquisition isn't anticompetitive. But given the gulf between Oracle and EC perspectives and Oracle's unwillingness to spin the MySQL software group off, it appears the matter won't be resolved soon.
MySQL is open-source software, meaning anyone may see, modify, and distribute the human-readable source code that underlies the software package computers actually run. Oracle's core database product is proprietary, meaning they don't grant those freedoms. MySQL is used widely at Facebook and Google among other companies, and competes to some extent with Oracle's existing products, arguably indirectly by expanding into newer markets to which Oracle's software isn't as well-suited.
Oracle castigated the commission in its statement:
It is well understood by those knowledgeable about open source software that because MySQL is open source, it cannot be controlled by anyone. That is the whole point of open source.
The database market is intensely competitive with at least eight strong players, including IBM, Microsoft, Sybase and three distinct open-source vendors. Oracle and MySQL are very different database products. There is no basis in European law for objecting to a merger of two among eight firms selling differentiated products. Mergers like this occur regularly and have not been prohibited by United States or European regulators in decades...
Sun's customers universally support this merger and do not benefit from the continued uncertainty and delay. Oracle plans to vigorously oppose the Commission's Statement of Objections as the evidence against the Commission's position is overwhelming. Given the lack of any credible theory or evidence of competitive harm, we are confident we will ultimately obtain unconditional clearance of the transaction.
The Justice Department, which is in Oracle's camp, detailed its reasoning in a statement from Deputy Assistant Attorney General Molly Boast of the Justice Department's Antitrust Division.
And though Boast pointed to the department's "strong and positive relationship on competition policy matters" with the EC, she also said, "At this point in its process, it appears that the EC holds a different view. We remain hopeful that the parties and the EC will reach a speedy resolution that benefits consumers in the commission's jurisdiction."
The Justice Department reasoned that there are other database packages available and that open-source projects can be forked by those who disagree with corporate sponsors' handling of the software.
"Several factors led the (Justice Department's antitrust) division to conclude that the proposed transaction is unlikely to be anticompetitive. There are many open-source and proprietary database competitors. The division concluded, based on the specific facts at issue in the transaction, that consumer harm is unlikely because customers would continue to have choices from a variety of well established and widely accepted database products," Boast said. "The department also concluded that there is a large community of developers and users of Sun's open source database with significant expertise in maintaining and improving the software, and who could support a derivative version of it."
Compuware announced Monday that it has completed the buyout of Web optimization company Gomez, bringing aboard the acquired firm's 272 employees into a new Web Performance division.
As an application and testing firm, Compuware provides enterprise customers with tools to optimize the performance of their server-based applications. Gomez helps its customers monitor and manage the performance of their Web sites and Web-based applications.
Compuware believes that the addition of Gomez, first announced in October, will allow it to provide a wider range of services to help customers test and optimize both in-house and Internet-based applications.
The deal has also garnered praise from some industry analysts. A recent IDC report "Compuware Expands SaaS Portfolio With Gomez Acquisition" sees the Gomez/Compuware marriage as a good match with plenty of upside.
"We're thrilled to welcome the Gomez team to Compuware," said Compuware President and Chief Operating Officer Bob Paul in a statement. "Together, Compuware and Gomez will--through a solution that features rapid time-to-value, ease of use and real-time answers--give IT and business executives the optimal application performance they need to drive brand image, customer loyalty and revenue."
Compuware said it will keep the Gomez brand, technology, and business model but look to integrate its new purchase in such areas as sales and marketing. Gomez CEO Jaime Ellertson will remain and serve as president of Gomez, the Web Performance division of Compuware.
Compuware expects the acquisition to add to operations this year.
Experts say Intel has been instrumental in driving down PC prices, one of the key indicators of competition and one charge New York's Attorney General cannot easily level against Intel in its antitrust lawsuit.
New York Attorney General Andrew M. Cuomo on Wednesday filed a federal lawsuit against Intel accusing it of paying computer makers rebates to illegally maintain its monopoly power and preventing AMD from gaining business with PC makers.
One of the operative charges in the complaint centers on prices. "Intel launched an illegal campaign to deprive AMD of distribution channels and consumers of product choice and lower prices," the complaint alleges.
Not so fast, say some experts. "Prices are falling, buyers are not complaining about Intel's loyalty discounts, and the lower prices produce obvious and immediate benefit for consumers," said Joshua D. Wright, professor at George Mason University School of Law, and a scholar in residence at the Federal Trade Commission until 2008.
"Given the intuitive and easy to grasp nature of the consumer benefits of discounting contracts in the Intel case, I suspect that judges will be less likely to condemn these practices without real proof of actual consumer harm. I'm skeptical that AMD, (New York), or the (Federal Trade Commission) will be able to produce that here," Wright said.
And prices continue to fall. One of the most recent examples of steep downward PC price pressure is ... Read more
Nvidia CEO Jen-Hsun Huang seemed unsurprised by allegations made Wednesday by New York's attorney general that Intel has illegally tried to maintain its monopoly.
Nvidia CEO Jen-Hsun Huang.
(Credit: Nvidia)"Where there's smoke there's probably fire. It blows my mind that's it's taken this long," Huang said in an interview Thursday, just after the graphics chipmaker posted solid fourth-quarter earnings. Nvidia competes with Intel in the PC graphics chip market.
"Even bribes and kickbacks can't stop somebody from buying our graphics processors," he said, referring to the allegations made in the lawsuit.
When contacted, Intel had no comment.
"Tactics good for AMD are tactics good for Nvidia," he added. "We have far superior products to Intel, that's how we survive by innovating far ahead of (Intel)."
Nvidia is locked in a legal battle with Intel, preventing Nvidia from making chipsets for Intel's "Nehalem" Core i series of chips--the lastest and greatest line of processors from Intel. Nvidia's Ion chipset--used in Apple MacBooks and Hewlett-Packard Netbooks, for example--has been very successful.
Huang also commented on the wave of next-generation tablets and media pads expected to hit the market next year, such as the rumored Apple tablet. Nvidia is already working with device makers who will use its Tegra chip in these designs next year.
"I think that's going to be the next big form factor," he said. "More and more people that use the iPhone would like to have a bigger iPhone. And the fact that 4g is coming--20 megabits per second. What can't you do. I think this (market) space is about to go nuts," he said.
"I really think we're on the cusp of our second personal computer revolution," he said.
Judging by its initial sales, Windows 7 is certainly proving more popular than Vista.
Microsoft sold 234 percent more boxed editions of Windows 7 than it did Vista in the initial releases of both products, according to research released Thursday by NPD Group.
In actual dollars, Windows 7 has also been more successful than Vista. However, early discounts on pre-sales copies and a lack of a promotional boost behind Windows 7 Ultimate led to revenues only 82 percent greater than those of Vista.
"Ultimate was a much bigger part of what Microsoft did with Vista, whereas this time I think they not only kept the price very high, but really kept the focus on the Premium product and the Premium three-pack," explained the author of the report, NPD's Stephen Baker, to CNET News. "Most of the promotional fire that they've put out there has been focused on those, for example, 'Buy a computer, get a $50 copy of Home Premium.' The pre-sales were all pretty much focused on Home Premium."
The numbers provided by NPD include both the initial sales of Windows 7 following its release on October 22 and pre-sales data from the discount program that Microsoft launched in July.
NPD declined to release actual sales figures for Windows 7, but the percentages help tell the story.
Web statistics firm Net Applications also found early adoption of Windows 7 to be strong.
(Credit:
NPD Group)
Sales of PC hardware running the new OS didn't fare quite as well. Though growth in PC sales for the Windows 7 launch was at its highest level for the entire third quarter, it wasn't as strong as during the Vista launch, showing a 6 percent decrease from Vista's initial days.
A mixture of different factors affected the sales of Windows 7 PCs, notes Baker. Vista was launched in January, which traditionally offers a better sales environment than October. Also, the new OS was hurt by sales of PCs with older operating systems, which made up 20 percent of all sales during Windows 7 launch week. In contrast, PCs with older operating systems made up just 6 percent of all sales when Vista hit the market.
Baker doesn't think the current recession had a bearing on the lower PC sales for Windows 7's launch. "We've seen pretty strong sales growth on computers all year regardless of the recession," he said. "People have been buying more units of PCs all year than they had in 2008. At least from a unit perspective, we haven't really seen much impact on the consumer PC market from the recession."
