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Columns Logical Conclusions

Discussion in 'Article Discussion' started by Da Dego, 29 Jul 2007.

  1. impar

    impar Minimodder

    24 Nov 2006
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    Read it between my second and third posts in this thread.
    That was a show-stoper to me the first time I started to read the article.
    And here we disagree. One thing is saying AMD sold all its production, another is to say it sold at price X (free competitive market) or Y (Intel orchestrasted market).
    But it is. Otherwise there wouldnt be any agressive price cuts.
    In 2006 Opteron was the server to get for most tasks; For some tasks Opterons are still better than Xeons.

    PS: For the record, my system has a P5B Deluxe motherboard, E4300 CPU and a nVidia 8800, so none of those pieces are AMD. Dont accuse me of AMDroidism. :p
  2. Da Dego

    Da Dego Brett Thomas

    17 Aug 2004
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    Hehe :) no, no such accusation impar. Clearly, you're talking from a numbers point of view.

    It seems that at the base level, we do disagree. The point behind my article is saying that I don't think anyone's a clear 'victim' here. AMD has been doing quite well, despite all of these alleged abuses. That much is clear - which, to me, starts to immediately negate 'monopoly' as a term. You have to prove that these actions were taken to control and force out another company and create artificial barriers of entry. They can't logically have another reason.

    For example, we'll take a copier company (technology examples Cheesecake!). If I buy a copier with one company, and then keep buying my supplies and things through that company, they will give me a discount, probably even on the original copier. If I take my business to a different supply/service company, I lose that discount. I didn't buy the service from the copier guys, and I didn't buy the copier from the service guys. It doesn't matter if there are two companies or twenty, buying in "bulk" is always going to be cheapest. I can even sign a contract to the effect that by buying this copier, I will receive future discounts on services from that company. That's just business. It's incentive to keep up a relationship.

    The exclusivity never prevented AMD from growing - indeed, it's grown every year, and keeps on growing. And companies knwo the "buy in bulk" rule - so it's entirely possible that Dell and the like said "We'll buy from you once you can be big enough to offer us some good deals." Did that happen? Maybe. I'm sure Intel did indeed wave some nice carrots around of its own - but that's cause it has its own glut of inventory.

    For instance, it's easy to tell Dell - "if you buy our lower end desktop stuff, we'll throw in some server stuff too." Or vice versa. Economies of scale are still economies - they're not termed "monopolies of scale."

    At some point AMD needs to realise that you can't be a small company and get the big contracts. You can't outsell Intel when they have 4 to 1 capacity on you unless you're cheating. You can't offer the same economies of scale - and that's not monopolistic, that's just business. So you find your niche, you grow, and you grow some more. And at some point you can start saying "Hey, look my way."

    Like I said, I don't think it was perfect from either side. But AMD has a lot to gain by playing this sympathetic victim role, and I'd bet Intel at the time had *little* (note: not nothing) more than getting rid of the glut of P4s and Celes clogging up its warehouses in 2004.

    And as you mention - in 06, opterons were the better processor. And sure enough, they made market gains. I think the market has rewarded AMD admirably, and the company has a lot to be proud of. That being said, it has a ways to go before it can really look at beating intel in sales, and I feel constantly like that's what the company expects to do. Maybe it's the press releases, or the backend stuff we see here, or maybe it's just the general attitude...but it seems that AMD wants to say "We have the better product, so everyone should buy us. And if they're not, it's because they're being forced."

    As I said in the article, there's only two ways that AMD can beat Intel - get bigger, or slow down the big guy. The company is already too indebted to do the first, which leaves only one option.
  3. bilbothebaggins

    bilbothebaggins What's a Dremel?

    1 Sep 2006
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    If the article is right about AMD selling out and being a healthy company etc. all the better. Bit-tech is the only source where I follow news as this and so the last few months (since Core2) constantly made me think that AMD would finally crash and Intel be the sole consumer chip maker left. (Yes, yes, that's just me taking journalism too seriously again :D )

    However, the article seemed to imply that the EU is wrong in investigating just because AMD is healthy and selling out it's stock. Though I would readily agree that I'm no expert on these matters, it would seem to me that Intel's methods of making exclusive deals etc. with large OEMs is hurting it's competition (AMD may be the only one at the moment) and consumers at least in the medium term by raising entry-costs for possible competitors.

    So is AMD whining? I'd say yes, probably.
    Should Intel be fined for anti-competitive behavior (if it actually occurred), regardless if it hurt AMD in the short term? Absolutely.

    Just my take on the issue.
  4. Tim S

    Tim S OG

    8 Nov 2001
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    I personally don't think the EU is wrong to investigate Intel, but I think that the truth is somewhere in between the two extremes - i.e. Intel saying it's done nothing wrong, and AMD saying the world is about to cave in. :)
  5. Xir

    Xir Modder

    26 Apr 2006
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    Well, I wouldn't call Sony and Toshiba small...

    But then again, compared with the likes of Dell, they probably are :D

    Some Quotes from the Japanese Fair trade comission: (IJKK beeing Intel Japan)
    Intel has NOT taken any measures against this verdict...sounds like admitting to me :naughty:

    IJKK, since May 2002, has made the five major Japanese OEMs1 refrain from
    adopting competitors’ CPUs2

    Based on the facts mentioned above, the ratio of the sales volume by AMD
    Japan and Transmeta USA among Total Domestic CPU Sales Volume decreased from
    approximately 24% in 2002 to approximately 11% in 2003.

    As I said, recent developments don't erase faulty behaviour in earlier times...I'm talking 2003 here.


  6. LAGMonkey

    LAGMonkey Group 7 error

    4 Aug 2004
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    Agreed, ive always herd intel being called "chipzilla"
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