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Rambus Files Antitrust Suit Against Memory Makers
bender647 writes "Forbes reports: 'Chip designer Rambus sued several major computer memory makers Wednesday, claiming they illegally conspired to limit production and raise prices in an effort to block widespread adoption of Rambus' technology.' Rambus believes that RDRAM was not the success it should have been because chip makers did not want to pay their royalties."
The real reason RAMBUS wasnt a success was because it was so fuggin expensive! Why pay extra money for a motherboard that supports it to pay 2x-4x the amount for the RAM as well? Nearly doubles the PC cost!
-Imidazole2
They say vote with your wallet. Until you do. Then they sue your ass.
Maybe RDRAM wasn't the success it should've been, because it was more expensive, and noone ever really adopted it?
No... no, that can't be it. We should sue!
So, RAMBUS gets a government monopoly on a given process (by shady means, or not), and then it's somehow illegal when other companies decide to use other processes instead? Yeah, that makes sense.
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They blame a conspiracy to raise prices, and then they say chipmakers didn't want to pay Rambus licensing. You can't have it both ways... it's obviously your own fault if your licensing is too expensive.
There's no reason not to expect RAM makers to retaliate after what Rambus did at that technology conference.
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People didn't adopt your technology because
1) It sucked.
2) It was highly overrated.
3) It was overpriced.
4) You are a deceitful bunch of motherfuckers who nobody trusts.
Rambus believes that RDRAM was not the success it should have been because chip makers did not want to pay their royalties.
So, this it is clearly the chipmakers fault then, huh?
Rambus should learn some basic business strategy. If someone comes out with a slightly less quality product, but sells it for a lot cheaper, that product will win. So, recognize the problem and lower your prices or significantly raise the benefits of paying them. In either case, don't resort to frivilous lawsuits if things don't go your way.
-- Fighting mediocrity one bad post at a time.
The only company violating anti-trust laws was RAMBUS! Entering into a standards committe and submitting technology while secretly patenting it is not only evil, it's illegal due to antitrust law.
And the reason their RAM cost so damn much is because of their royalty arrangements which most companies refused to enter into. And at the time RAMBUS was touting the profit margins on their products over DDR as a benefit and reason that companies should sell it!
Bastards.
The rest of us believe that the existing technology delivered acceptable levels of performance for far less money.
-S
--- What parts of "shall make no law", "shall not be infringed", and "shall not be violated" don't you understand?
You don't have a God-given right to collect royalties from people who would rather use a different technology.
If by "fix prices" you mean keep prices high because that is what is necessary to make a profit because other technologies that are almost as good are far cheaper, then the companies being sued by Rambus had better watch out.
Hey Rambus, there's a lesson you should have learned from your ol' pal Sony. Ask them what happened to their Betamax format.
Seriously, "cheap but good enough" almost always manages to beat "expensive and techically superior." Apple might be an exception, but that's open to debate. Too bad Rambus didn't read the history books.
did it ever enter their tiny little heads that the reason that their wunder-patent didn't sell as well as their very carefully crafted market research said it should have, might just have something to do with the fact that the CONSUMER (not the producer, they just pass the cost on) didn't want to pay their licence fee (100% price markup) for a product which provided minimal benefit in certain limited cases and a large handicap in a great many (more commonly encountered) cases?
stupid corporation, hopefully they and all the other "IP" companies will go the way of the tyrannosaurus rex (i.e. screaming in agony as a giant fireball from space lands on their heads)
The difference between Theory and Practice is greater in Practice than in Theory.
OK its a sign that they've reached the near death stage. Nothing left to do but pull the old pump-and-dump routine to screw a last few suckers before the end.
I wish there was a way to make the corp execs and legal teams like 10x PERSONALLY liable for this kind of bullshit behavior
Their argument appears to be "These companies didn't want to pay us, so they used a competiting product. So we're sueing to make up the money we didn't make from not trying to be competitive in the open market."
But this one under the "duh" category.
Rambus believes that RDRAM was not the success it should have been because chip makers did not want to pay their royalties.
Duh. Two technologies, one free, the other having outrageous royalties... which would you pick? This proves that one does not have to be a genius to run a company.... And that royalties on technology is bad, m'kay?
Oddly enough the fluctuating prices on RAM mean you are overall getting a much better deal on your memory than on your processor.
Basically the constant decline in prices of processors is explained by Intel's ever declining unit costs. Intel can mark up processors by a fairly constant amount, as their costs decline due to things like R&D and factory costs being spread over a now exceedingly large number of units, those costs have declined. They can also affort to invest in the cutting edge technologies, and can hope to make money over the lifetime of the factory.
On the other hand RAM has pretty much been developed, it's just lots and lots of transistors, resistors, capacitors on the silicon. As a result it's quite easy for a new company to start a RAM manufacturing firm, lots of capital for the equipment is the only major hurdle. As a result it's one of the first places countries subsidize when they want to develop a high tech semiconductor manufacturing industry. Japan did it in the 80s, Korea and Taiwan did it in the 90s, and to a lesser extent China is doing it today. It appears that foundry services are replacing DRAM as the first semi manufacturing a country does. The idea is that if we have companies with the manufacturing experience they will facilitate the introduction of companies that add signficantly more value with an engineering process and a country can build it's own industry from the ground up.
As a result contries trying to build the industry are willing to give boatloads of cash to an entraint trying to enter the market. These firms operate at a loss for a long time, and got free capacity, so they drive down pricing for everyone else in the industry. Check on Micron's profit level vs Intel's over a long period of time to see that Intel keeps prices at a relativly stable markup over costs (use gross margin as a decent indicator of mark up they were coming to the tail end of a good year in 2001). While Micron makes money in the upswings (last one was in 1999 before the chart) and loses it hand over fist in the downturns (hopefuly making enough to allow it to invest for the next generation technology (as the next new entraint subsidized by the government will have a state of the art fab).
Degaussing scares the bad magnetism out of the monitor and fills it with good karma.
Ironically, most of the posts in this story corroborate the plaintiff's charge - that manufacturers limited production to create an artificial scarcity which drove prices of Rambus memory up. You can't counter the argument that nobody adopted Rambus technology because it was too expensive when the charge is that it was collusion on the part of manufacturers to artificially drive up price and prevent widespread adoption. Talk about logically shooting yourself in the foot...
Reading the article, it sounds like memory manufacturers could have colluded against Rambus. In my book, if none of the manufacturers independently wanted to produce Rambus memory and they communicated this fact that amongst themselves, that's not collusion. The details of who said what and at what time, though, are definitely something that will be worked out over the coming years. Depending on the nature of the communications and their timing, this could in fact be determined to look like collusion. If each firm can individually show why they didn't care to produce more Rambus memory, though, I think the case will fail.
Mind you, I'm not saying that I like Rambus, their practices, or anything - just that they perhaps do have a case. Only time will tell.
I think the biggest complaint was they they developed an incompatible standard, tried to force the industry to use their standard, and then tried to force all the chip and motherboard makers to pay them royalties to use it.
This does smack of McBride and SCO, though. Develop/acquire an (arguably) inferior product, then try to extort everyone who uses it, and sue everyone else who doesn't.
-- You are in a maze of little, twisty passages, all different... --
Duh. Two technologies, one free, the other having outrageous royalties... which would you pick?
I, like everyone else with enough sense to use AMD instead of Intel, would add up the cost of using each of them--including the royalty cost and the value of any performance increase the new tech has over the open one--and pick the one that does what I need done.
And that royalties on technology is bad, m'kay?
are, bad. ARE bad. Or, rather, are NOT bad, just a thing that happens. (They're actually a basic idea behind the whole patent process--we essentially pay people to tell us what they've invented, and in exchange we give them a right to charge royalties on anyone who wants to use that invention for a relatively short while. Based on the USA's performance since we intorudced the patent system, I'd say it works.)
What's bad, btw, is companies thinking that they have a right to their customers, and suing to get MORE customers. Talk about abuse of the legal system.
This problem was evident from day one. The fact that they didn't go through the trouble to secure independent production capacity to keep the other manufacturers honest just goes to show that they wanted to have their cake and eat it too. Doing so would have slimmed RDRAM profit margins but definitely insured that lack of supply doesn't kill their product.
It's a case of greed ruining their business model.
I'm surprised that Intel bought into this mess. Just goes to show that for all their glitz, Intel can be a bunch of geeks sometimes.
Politicus
....reminds me a lot of ISA vs MCA during the late 80s/early 90s. The MCA was better, but a pain to licence from IBM. What happened? The industry came together, made EISA. Except IBM had more brains than to sue over it.
I read the benchmarks for Rambus. The performance gains were noticable, but not stunning. They fell for nothing other than the chicken and egg problem. Since RAM producers didn't believe in Rambus on the mass market, there was no cheap mass production. Since there was no cheap mass production, it failed on the mass market. Self-fulfilling prediction.
It's like every other technology in the computer industry, it either has to hit critical mass or be overrun. SCSI was supposed to take over for IDE. What happened? PIO->UDMA->SATA and it just keeps going, SCSI is only holding their own on servers. Likewise with SDRAM->DDR->DDR-2, it simply evolved past the supposed "conqueror".
There was no foul play here. Rambus went up against momentum, and lost. Hell, even Intel appears to have lost it with the Itanic. With x86-64 and IA32e, momentum has spoken. People are used to computers improving all the time already. If you want them to change, you need either backwards compatibility or a small miracle in performance.
Kjella
Live today, because you never know what tomorrow brings
Why? Because it's an unpleasant truth?
No, because it's a lie! They have a responsibility to the shareholders to properly manage the company. That is a significantly different goal.
Don't blame me, I didn't vote for either of them!
1) Rambus originally sued because technology they presented to JEDEC that became key for DDR memory was secretly patented by them. After DDR gained marketshare, they turned around & surprised everyone with a lawsuit over that technology. I don't see what your story has to do with that issue.
2) You have any references for any of this?
3) You just registered as RDRAMman & posted this one comment. If you're going to troll, don't be so obvious.
4) You suck.
The REAL truth is that it was "fuggin expensive" in part due to royalty costs and in part due to the "collusion" that RAMBUS complains about. The problem is that RAMBUS management is too retarded to see the motive behind the collusion, which is what has to be established to prove the chip makers were acting illegally.
To put it briefly: RAMBUS invents a nifty new technology and thinks its kung-fu is so good that it patents the crap out of it and does a fancy dog and pony show to the linkes of Intel, Micron, Siemens and so on. Said show is well received and people get on board. When everyone is rip roarin' to go, RAMBUS says "oh yeah, we forgot to mention the little thing about our protection money---pay up or we'll break your kneecaps so you can never run again".
This is where the collusion comes in. Micron and other chip makers have a choice between the old, open standby PC100/PC133/SDR/DDR/whatever that is widely known and pretty much vendor neutral, or a new, incompatible and more expensive technology that puts their gonads squarely in the slowly clenching fists of RAMBUS (and Intel to some degree).
One company owns all the patents and gets all the royalties and can decide on a whim to jack up royalies or take away your license to use their technology on a whim. Based on RAMBUS's behaviour to that point who could blame the chip makers for shutting out RAMBUS en-masse? It didn't take great deal of effort and coordination for all parties to reach the same decision.
It's kind of ironic really. RAMBUS is whining about collusion and monopolistic practises of others because their attempt at monopolistic practises failed. This "collusion" wasn't driven by the desire to eliminate a competitor and cement market share, it was a common sense decision that any company would've made.
You'd think someone at RAMBUS would've heard the well worn case studies on Betamax video tape and IBMs MCA bus and avoided such bone-headedness. At least Sony didn't sue JVC, Panasonic and Toshiba because they preferred to make VHS machines instead of giving a cut of their profits to competitor Sony, and IBM didn't sue Compaq et al for creating their own EISA and VLB instead of buying MCA from IBM...