Robert Pogson

I spend a lot of text on M$, but there is another part of the Wintel monopoly: Intel. Intel is the company that brought us inexpensive microprocessors in bulk. I remember the joy of reading about the 4004 chip in Electronics back in the 1970s. That was the beginning of Moore’s Law and the incredible process bringing powerful computers to the masses of humnanity not in the Fortune 500.

Unlike M$, Intel had to fight for its monopoly. It produced a great product in competition with others entitled to the technology Intel had developed to ensure multiple sources of CPUs according to the deal with IBM, the developer of the IBM-compatible PC. Along the way, they became greedy and tried to take it all, excluding other chip-makers from the market. They became able to charge large price differentials between their chips and those of the competition. About the time “Intel Inside” became a household word, I was building my own PCs. Unlike others, I looked at the specifications and could appreciate that by buying AMD, I could achieve what I wanted at a lower price, sometimes $100 or greater difference. That changed when AMD produced the AMD64 line. For a time, they could charge $1000 for a new chip because Intel was not in the ball-game.

Now, Intel is a step ahead in Moore’s Law and Intel has CPUs that will run Vista with huge caches, but AMD is still worth supporting if only to keep Intel honest.

There is news of the details of Intel’s technique for excluding competition from the market in a translation of a legal decision in Korea:

“As Samsung, the No.1 domestic PC maker and the 100% defendants-CPU using company at that time, had been starting to buy AMD CPUs and launched AMD CPUs- installed PCs from the first quarter of 2002, the defendants continuously requested Samsung to cease from buying AMD CPUs. As Samsung rejected these requests, the defendants significantly reduced the volume of rebates in the first quarter and second quarter of 2002. Since then, the defendants continuously had requested Samsung to cease from buying AMD CPUs, exploiting the provision of rebates as an instrument. In May 2002, the defendants suggested Samsung the “long term support plan” with promise to offer maximum-level rebates from the latter half of 2002 and afterwards, on the condition of Samsung’s suspending the purchase of AMD CPUs by the third quarter of 2002, and, consequently, Samsung accepted this proposal. Since then, from third quarter 2002 to second quarter 2005, the defendants established the quarterly support plans pursuant to the “long term support plan,” and provided rebates to Samsung during the period. In accordance with these rebates, Samsung stopped purchasing AMD CPUs in the third quarter of 2002, and from that time, Samsung maintained the Intel CPU Market Segment Share (henceforth, `MSS’) at 100% level until the second quarter of 2005.” (17p)

…

“Reviewing this argument, as the Table 31 illustrates, considering the amount of rebates actually provided to Samsung and Sambo, we could observe that the rebate rate was in the lowest level in first quarter 2002 when Samsung rejected the defendants’ request for abandonment of AMD’s products, despite Samsung’s purchase amount of the defendants’ products was in the highest level at the same period. On the contrary, we could observe that the rebate rate was at the highest level in third quarter 2002 when Samsung stopped purchasing the AMD’s products, despite Samsung’s purchased amount of the defendants’ products was at the lowest level during the same period. This fact resulted from the fact that the defendants’ rebates had not been provided in pursuant to the amount of partner’s purchased volume but pursuant to the purchased volume of competitor AMD’s products. Accordingly, it is appropriate to conclude that the defendants’ rebate program is totally different from the volume discount scheme which defendants are arguing.”

see the translation by The American Anti-Trust Institute.

The reasons Intel did these things was because AMD had superior chips for a time and AMD had better prices. Intel could have lowered prices to improve price/performance, but they chose to illegally exclude AMD from the market. AMD is still doing well on the low-end desktops but they have nothing in the netbook game and Intel clearly has a lead in power/price/performance at the high end. In my game, GNU/Linux terminal servers, those huge caches are just the ticket for a machine running 1000 or more processes and making many context switches per millisecond.

I can assume Intel carried out such tactics globally. It is unlikely a rogue element in Intel did it only in Korea. In that case AMD v Intel may have legs. Let us hope the consumer gets a break in this and not just corporations. Otherwise, they will take our money, with the only doubt being who gets what share.

Competition in hardware and software ensures constant improvement and efficiency. Wintel is coming to an end thanks to much effort globally. Wintel has ripped the world off for billions but we do not have to take it any longer. Buy AMD, Via, ARM etc. and use Free Software. It is in your best interests to do so, even if there are short-term costs. The alternative is long-term over-charging and lack of choice.