Advanced Micro Devices
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By pfosse
June 28, 2005

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In reading the 48 pages of complaints, it was obvious to be that the situation is far more serious than I had thought. I had thought that Intel was trying to slow AMD's progress, buying time while they caught up technically. After reading that complaint, it seems as if AMD's situation is somewhat desperate. I mean they have a superior desktop product by all accounts, they offer to give 1 million to HP and HP only accepts 160,000! This really sucks!

In thinking more about this, assuming the suit is unsuccessful (I mean, if we couldn't nail Microsoft (which everyone admits is a monopoly), what is the chance of nailing Intel?) I think the only hope isn't that Intel is more of a monopoly than Microsoft (Clearly, it isn't), but that the consumer is harmed more because the alternatives are better. I certainly think AMD is a great alternative compared to Linux. If you go AMD, you don't have to re-buy all your software and relearn the operating system like you need to do if you go Linux (I think Linux is great for servers (I use Unix and Linux everyday in my job), but it is just too hard for consumers in my opinion.)

If AMD can't get the OEM's to offer decent products, they need to make a Dell of their own. I think they are doing that with Sun in servers. Sun isn't mentioned in the complaint and it is obvious why; Sun has dropped Intel and so Intel doesn't have anything to threaten Sun with. Now if Sun had sold millions of Intel servers, they might not have had the guts to drop Intel, but since they started selling Intel servers so late and their product was so average, they sold few of them. I'm sure all or nearly all their customers liked the Opteron better and only asked that they kept the Intel servers available for spare parts and such. Sun doesn't need a great relationship with Intel to buy extra Pentiums in case a few fail. If Intel refuses, they can always pick up a hundred on pricewatch or whatever.

Now AMD needs to find an OEM and /or store that they can make a winner in the desktop and mobile space. Something like offer to a OfficeMax that they can sell as many Intel computers as they want, but that we will give you $100 rebate for every AMD product you sell. Make it so they come in $100 less than anyone else for the popular configurations. They won't want to sell any Intel products (because they are inferior) and Intel won't have any leverage over them because they don't sell them anything. I think it is important to start with a small (in Intel sales) but hungry company rather than a big one because a large one will not be able to make the complete switch like Sun did. If you don't make the complete switch, you don't really benefit from carrying AMD (which is the whole problem.)

The real problem is HP. HP seems like it has done pretty well helping AMD where it can, but it just has too many ties to Intel. With the new Fab 36, can AMD start supplying 100% of HP's needs (except for Itanium of course) and let HP break free? Does HP even want to break free? I would think they do, since in their present situation they get some nice deals from AMD and Intel, but they always play second fiddle to Dell on Intel deals.

AMD right now has some very desirable products that you can't get from Intel (FX-57, X2, 875, 275). The 275 and 875 pay for themselves in software savings and just today there is an article in Digitimes that Intel's dual core sales are disappointing and yesterday AMD announced their dual core sales are exceeding expectations. AMD could do some Intel-like things with these products (only give them to "Loyal" customers.) I don't think they will do that for 2 reasons: #1 they want to sell as many as possible. #2 it would hurt their legal case if they did these tactics. On the other hand, it has be to killing Dell not to have access to these hot products and AMD has made it clear they won't get any special access to them.

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