After a 1.8B settlement it seems like a truce has been declared between AMD and Intel. But in the lawsuit that continues to rattle on in NYC involving Intel's relationship with Dell many things are yet to be illuminated. Austin tech writer Kirk Ladendorf quotes some revealing emails that have been presented in that case. The most tasty missives are between Michael Dell and Intel CEO, Paul Otellini.
In 2005 Otellini sent a message to Mr. Dell stating, "There is nothing new here. [Meaning that AMD's Opteron was kicking Intel's butt.] Our product roadmap is what it is. It will deliver increasingly leadership products… Additionally we are transferring over 1B a year to Dell. [Marketing rebates.] That was judged by your team to be more than sufficient to compensate for the competitive issues."
Ouch! It is fine for Intel to spend their marketing dollars on any program they like. That's not an issue. But when it came down to push and shove, another voice from Intel responded to Mr. Dell's stinging criticism. Intel Chairman, Craig Barrett, wrote in an email to Otellini, "Not a time for weakness on our part. Stop writing checks immediately and put them back on list prices asap."
And the rest is history. AMD did show up in Dell servers and desktops and laptops. But were the marketing dollars being used to paint a better picture of Dell's financial performance during those lean years?
According to the story in the AAS, "The lawsuit claims that Dell received $304 million in Intel rebates during one three-month period in 2004, which amounted to 36% of Dell's profit.
"By the middle of 2006, Dell's rebate payments from Intel rose to $554 million in a quarter — more than the company's profit for the period."
So were Dell and Intel doing anything wrong? Did their decision make personal computers more expensive during that period because Dell was not making machines with the less expensive AMD chipset?
Again, it's not about CAN they do this. The real question is WHY did they do this. Why did Dell and Intel engage in what appears to be negotiations about how much Intel would spend to keep AMD's superior Opteron chip out of Dell's server business?
Well, the 1.8B settlement has been paid, and AMD can lower their swords for now.
Here is a screenshot from Dell's website today:
The above "Compare processors" with the Intel logo showing on the chip goes directly to an Intel Chip Selector presentation. And further down on the left-nav of Dell's site for Small and Medium Business Laptops you find the processor selector outlining the available chips.
So somehow AMD no longer has a chip in the race in Dell's laptop lineup and Intel still owns the conversation about which processor is the best choice for you.
@jmacofearth
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