Slashdot Mirror
Rambus Claims It Was Price-Fixing Target
conq writes "BusinessWeek reports on the latest developments in the Rambus/Micron saga over pricefixing." From the article: "One e-mail, dated June 5, 2001, from Micron Vice-President Linda Turner to other Micron employees was in response to worries about prices on DDR-DRAM that had been falling. 'No problem!,' Turner wrote. 'We want DDR to explode in the marketplace so have actually been requesting Infineon, Samsung, and Hynix to lower their DDR pricing to help it become a standard (and drive Rambus away completely).'"
"crashed email server" when you need it...
Twin or more? ITA
Apache/Spring/La
'We want DDR to explode in the marketplace so have actually been requesting Infineon, Samsung, and Hynix to lower their DDR pricing to help it become a standard (and drive Rambus away completely).'
So, the reason I had to shell out the high prices was because you wanted to not sell me the chips. Me and my wallet thank you.
This is ridiculous, price fixing of DDR would have been good for Rambus with their overpriced memory.
Let's just say that Linda Turner wasn't the fastest bit in the cache...
I still remember quite vividly the feud between Tom's Hardware Guide and Rambus that resulted in Rambus' stock price tumbling. Even if the other manufacturers kept their prices artificially low (which I doubt), Rambus was easily twice as expensive if not more than the same amount of DDR would have been. The fact that real world performance tests didn't back up the hype that Rambus promised was the nail in the coffin. If it was priced lower, they might have had something. I thought the technology had potential, but it's absurdly high price kept it from ever being realized.
... it was the fact that Rambus is SHIT
"PC800 RDRAM, which operated at 800 MHz and delivered 1600 MB/s of bandwidth over a 16 bit bus using a 184 pin RIMM form factor"
"Compared to other current standards, Rambus shows significantly increased latency, heat output, manufacturing complexity, and cost.[citation needed] PC800 RDRAM operated with a latency of 45ns, compared to only 7.5ns for PC133 SDRAM."
then squashed by
"DDR SDRAM, introduced in 2000, operated at an effective clockspeed of 266 MHz and delivered 2100 MB/s over a 64-bit bus using a 184 pin DIMM form factor."
not to mention needing CRIMMS or whatever they called the terminators
http://en.wikipedia.org/wiki/RDRAM
http://en.wikipedia.org/wiki/DDR_SDRAM
If you cannot keep politics out of your moderation remove yourself from the Mod Lottery.. NOW!
They're claiming that DDR manufacturers colluded to reduce prices, thereby taking a temporary hit in profit while driving Rambus out of business. All in the interest of future profits. Thank Wal*Mart for the idea.
How does a 7-person democracy cut a pie? Into 4 pieces.
Is keeping prices artificially low actually illegal? Governments normally support anything that benefits the consumer.
Again.
If your product does not hit the market as it should, sue someone. Sue "Linux", to save your outdated product, sue your competitor for some meaningless patent hassle or, and here's the actually as far as I can judge ONLY new bit in this, some cartel building.
What happened to good ol' free commerce, where the best product makes the buck? Been coffined and buried by lawyers and marketeers long ago, I know...
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
Assert patents against widespread technology, sue like crazy. I guess it's just good for the Microsoft execs that they were already fixing the price of web browsers at "free." If the memory companies had just decided to give away the chips, rather then make them cheap, would it be different? Perhaps they should have "bundled" them.
Who do you get to be an expert to tell you something's not obvious? The least insightful person you can find? -J Roberts
...an executive at a company suggested that he (and his competetors) lower prices in order to entice more consumers to purchase his product over the opposing standard? Scandalous! Criminal charges should be filed immediately! It's un-American, I tells ya!
"The companies worked together to improve prices on a competing type of memory chip in order to discourage computer makers like Dell (DELL), Hewlett-Packard (HPQ), Gateway (GTW), and others from adopting a type of memory known as Direct Rambus Dynamic Random Access Memory (RDRAM) in their computers, and instead favor a competing type of memory chip known as Double Data Rate DRAM (DDR-DRAM)."
If RAMBUS wants to push this one, they have to reveal something beyond Micron et al attempting to lower prices for consumers across the board. If they could prove that their alternative had the same cost basis and Micron et all lowered prices solely to drive them out of business so they could all then simultaneously raise prices back up, and in fact did so, then they would have something, but it doesn't not sound like they had a cheaper solution or that Micron et al were losing money to drive them out of business to raise prices back up. Collusion is not illegal if it works in favor of consumers. I think a lot of people fail to realize that antirust laws and the like exist to protect consumers, not protect businesses from competition (which is why a government entity is the one who generally prosecutes antitrust cases "for the people").
First, IANAL. Second, if some would RTFA, they would realize the price fixing here involved LOWERING prices. Historically, to my knowledge, accusations of price fixing have normally been made when separate parties agree to not compete and keep prices at a certain level. Here we have SOME competitors ecouraging each other to lower their prices below that of a common enemy, possibly at a loss in order to make better profits down the road. Laws against price fixing are meant to encourage competition, and IMO this is competitive behavior. Am I wrong?
"Build something idiot proof, and someone will build a better idiot" - Samuel Clemens
Well, I suppose collusion is not always an antirust violation as well, but antiTrust makes more sense given the context. Damn typos.
This fits the business practise of AMD, which has always been prone to ruin competitors by producing cheap, low-quality goods. That's asian companies for you.
This is nonsense. Micron could achieve the same objective by simply lowering their prices. Infineon, Samsung, etc., would end up lowering their prices as well in order to stay competitive, and the overpriced, underperforming Rambus would suffer all the same. Micron informing its competitors of the reason for the price cut is merely a courtesy.
How is this price fixing? Price fixing to me is setting a high price and coluding with others to keep it high.
The opposite shouldn't be called price fixing... more like... competition?
Hell, if this is price fixing, what the hell is going on with gas then? I'd much rather have them all colude and lower the price.
I think DDR exploded in the marketplace as soon as it was available for two player competition at the local mall arcade.
"Under the Sherman Act a combination formed for the purpose and with the effect of raising, depressing, fixing, pegging, or stabilizing the price of a commodity in interstate or foreign commerce is illegal per se"
-- U.S. Supreme Court - U. S. v. SOCONY-VACUUM OIL CO., 310 U.S. 150 (1940)
... when Rambus was still booming, together with the new (at the time) P4 chips by Intel, they were somewhat faster than the rest, but a lot more expensive.
I actually remember people being dissapointed that P4 "requires" (this is how it was marketed) Rambus memory to show its full potential, and pretty much avoided Rambus like the plague for its proprietary nature and the hefty price.
And of course in time Rambus lost its speed advantage as well, which drove it into non-existence.
Makes me wonder if the additional lowering of the prices by the DDR manifacturers was required and did it matter for driving Rambus out of the market. It seemed a lame duck from day 1.
What if gas companies simply colluded to lower the price with the expectation of driving companies that offered alternative fuels out of the market so that they could see bigger gains in the future? Would you feel the same way?
If this was an example of gas companies colluding to drive out a competitor who's coming to market with an alternative fuel the slashdot crowd would be up in arms.
Take a look at the prices of state-of-the-art SDRAM before and while RDRAM was on the market. Notice how 66Mhz 16- and 32MB SIMMs start out pretty expensive in the mid to late nineties, and are later replaced by equally expensive PC100 SDRAM. Then the price of PC100 SDRAM suddenly drops around 1999 to dirt cheap, and then the cheap PC100 is supplanted by equally cheap PC133, PC150, and PC200 SDRAM. Then just a short while later, really expensive DDR SDRAM with data rates in multiple gigabits per second hits the market and we've been paying for memory in a new higher price range than the old pre-RDRAM high price range ever since.
Now correlate that with the introduction and failure of RDRAM in the market and you'll see that PC100 prices dropped not long after it was introduced, and then fast, expensive DDR SDRAM came to market around the time RDRAM became irrelevant. Of course, that's just circumstancial. A lot of different market forces could have caused that kind of price movement.
RDRAM had a lot of technical problems with it. It did run hot, it did ride on funky slots, it was complex to manufacture, and for a variety of reasons, it cost a lot of money, not least because Rambus wanted to recoup the costs of developing the one advantage that RDRAM actually did have. That one advantage was that RDRAM was as fast as Intel's top-shelf CPUs. You could build a PC with a 400 Mhz Pentium II, a 400 Mhz FSB, a 400 Mhz north bridge, and a 400 Mhz memory bus leading straight into 400 Mhz memory, but only if that memory was RDRAM. Of course, 200 or 266 Mhz would have been just fine for most applications and even for most benchmarks. Matching speed with the CPU was overkill and Tom's Hardware knew it, among others.
The things that made RDRAM faster than contemporaneous commodity RAM were the patented designs of Rambus. Their problem was that they came to market seeking tech journo headlines at a time when the average PC consumer was fixated on the CPU speed, assuming that if they could match CPU speed with their RAM and get it written up, people would 1) stop fixating on CPU speed and 2) notice that commodity RAM wasn't cutting the mustard anymore.... and they overdid it, and overdoing it cost more than it needed to all the way down to retail.
Having said that, the evidence is only now coming to light that RDRAM wasn't killed by its own problems. It was killed by commodity RAM manufacturers flooding the market with cheap PC100 and PC133 RAM. So cheap that the cost curve of settling on the faster RDRAM part didn't make economic sense for most system integrators or their customers, despite the technical advantage. So RDRAM dies a quiet death of irrelevance around roughly 2002. Boo-hoo.
What happened next is the part that Rambus is currently seeking redress for. DDR SDRAM came to market, and we all know how it works and why it's exactly twice as fast as conventional SDRAM. What most people don't seem to understand is that RDRAM was DDR. That 400 Mhz RDRAM part actually used a 200 Mhz clock, and the FSB, north bridge, and memory bus of an RDRAM-capable motherboard were also DDR. Rambus developed DDR and holds the patent on it, among other things that have shown up in modern commodity RAM.
So let's recap. Rambus came to market with a problematic yet superior product which was ahead of its time in a market dominated by a few large manufacturers of commodity parts. The major manufacturers got in touch with each other to temporarily fix prices far too low to justify adoption of the problematic yet superior product which was ahead of its time. RDRAM became irrelevant, and the major manufacturers believed that Rambus had also become irrelevant. Once that happened they started using Rambus technology in their own products as the market needed it, while colluding to bump prices back up where they wanted them all along.
Since then, the post-RDRAM high price fixing has been proven in court. Rambus has kissed and made up with Infineon and Elpida with patent licenses and settl
Just making sure I'm clear that you support Exxon, Mobil, and Chevron station's rights to get together and collude to sell fuel for less than Billy Ray's Gas Shack in order to run Billy Ray out of business and maintain their market share. Do I have that right?
Maybe I'm just jaded because my workplace still has a bunch of Dell boxes that use the always-ridiculously-overpriced Rambus RDRAM (they're just as absurdly expensive as they were when Intel stupidly backed that over-patented pony), so I get pissed off every time we have to buy more RAM for those boxes... but I don't see any news here.
I RTFA and all I see is competitors wanting their competition to go away. Big whoop. The price fixing is a separate issue, has nothing to do with the lawsuit between Rambus & chip makers.
So what if one of Rambus' competitors wanted Rambus to die a horrible, nasty death - if Rambus didn't like it, they need to do the Microsoft thing and buy their competition. Given the ridiculous amount of royalty payments they were getting there for a while, they probably could have done it, or were within a hairs breadth of being able to do it.
And let's not even start into the whole "share our patented technology with the DDR group" slimeball tactic used by Rambus.
vastly overpriced memory, based on a common manufacturer spec stolen from the consortium and patented to screw the rest of the industry.
anything that hurts rambus is OK in my book. you look up "screaming weasel" in the dictionary, you see their logo.
give those DDR guys a medal for a common spec, lower prices, and better performance. I will never own a rambus-loaded computer. it is the one thing I specifically check for.
if this is supposed to be a new economy, how come they still want my old fashioned money?
Rambus is also claiming that these same manufacturers, who were also creating RDRAM, were artificially limiting supply as to create demand and raise prices. So these same players are simultaneously raising prices on one product they produce while lowering prices on another.
RDRAM could have been within 10-15% of SDRAM on terms of costs.
That said, I see this as a mistake on the business and PR side, not one of the technical side. At some point, Rambus has to look at itself in the mirror and figure out what it needs to keep goodwill with its eventual suppliers and customers, and what they're doing now isn't working.
This is evidenced by the negative perception of Rambus in the IT community.
Remember that Sony is using Rambus XDR memory in the PS3. Yet another reason to get a Wii or a 360. This really doesn't make any economic sense either since DDR2 will inevitably have greater market acceptance leading to lower volume pricing compared to XDR once it is established.
I am becoming gerund, destroyer of verbs.
As far as I can tell, this is just a case of these companies getting greedy, and steping over the line.
Everyone here, older than 13, should remember that Rambus was overpriced, overhyped, and under-performing. The only break that they got was that Intel decided to use only RDRAM on their motherboards, and support only RDRAM with their chipsets.
The writing was on the wall. It just looks like the other companies got a little worried that it might catch-on, and instead of each companies independantly lowering their prices to compete, they conspired to do so. It seems strange, since one big company lowering their price would have forced the rest to do the same, anyhow.
It's also hard to consider this very immoral, since it was a case of several smaller companies getting together so they'd have a better chance to compete with a much larger one (Intel, not really Rambus).
It's just surprising that they broke the law, when it seems they didn't really NEED to, to get the desired result.
Slashdot gets worse every day... Pipedot: News for nerds, without the corporate slant
While I certainly do not disagree that predatory pricing is illegal (as per the Clayton Act and Robinson-Patman Act), I don't believe that predatory pricing is anti-competitive and actually harmful. Since you use the Canonical "Standard Oil" example, I would strongly recommend reading: "Predatory Price Cutting: The Standard Oil (N. J.) Case" by John S. McGee, Journal of Law and Economics, Vol. 1. (Oct., 1958), pp. 137-169. This paper debunks some of the myths regarding Standard Oil and predatory pricing in general. If you don't have access to JSTOR, and you would actually like to read it, I will upload it upon request.
Signed, An Economist
Really, I'm not trying to be clever with my signature.