AMD lawsuit against Intel shows how marketing in the PC world works
The lawsuit filed this week by Advanced Micro Devices against Intel, claiming illegal anti-competitive business practices, is interesting because it reveals the millions of dollars paid to PC makers and retailers by chip suppliers. The money is for shelf space in stores, co-marketing campaigns, and rebates on chips.
AMD claims that Intel uses such payments to disuade PC makers and retailers from buying and using AMD microprocessors.
The complaint alleges many specific cases in which leading PC makers and PC retailers received millions of dollars from Intel in rebates as long as they did not make or sell PCs with AMD chips.
In some cases, companies that announced plans to introduce AMD-based PCs are alleged to have been enticed by Intel's gold to drop, or not promote, the AMD-based computers.
From the complaint paragraph 49:
Intel also purchased HP's exclusivity for its most popular notebook line. HP captured 15% of the US retail market last Christmas with an Intel-powered 14 1" display notebook (the "DV 1000") with a popular power saving feature called Quick Play. When AMD sought to convince HP to carry a similar AMD-powered notebook, HP declined. It explained that Intel has paid between $3 and $4m to lock up this product line for at least one year.
The other way to look at this is that PC makers and retailers could be using the "threat" of AMD as a way to get higher rebates and more marketing dollars out of Intel...
I'm planning to announce a business line of AMD Opteron based PCs--if Intel is listening :-)
Here is the complaint.
http://www.amd.com/us-en/assets/content_type/DownloadableAssets/AMD-Intel_Full_Complaint.pdf
Here is: An Open Letter from Hector Ruiz, AMD Chairman, President and Chief Executive Officer.
