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Dell's Intel Bias Caused By Under the Table Cash?
swschrad writes "There's a story up on Reuters today saying Dell faces a class-action lawsuit for finagling the books to hide under-table money from Intel. The hidden cash, up to a quarter-billion dollars a quarter, is alleged to have been paid to keep competing CPUs out of Dell PCs. Dell, their accountants at PriceWaterhouse, company founder Michael Dell, and former CEO Kevin Rollins are all avoiding comment on the pending litigation."
I could have sworn I've seen Dell selling machines with AMD CPUs.
(IANAL)
What is that supposed to mean? They are two companies free to negotiate whatever price they want with each other. It's their business and their right to do so. What the f**k?
Any guest worker system is indistinguishable from indentured servitude.
A large technology company trying to make sure the competition stays out of the game by pushing the retailers? Preposterous! Next you'll tell me that Microsoft is trying to rule the world by forcing everyone on the planet to use their products.
Under the table money from Intel?
Wait... is that why the Opinion Center colors are so... I dunno... currency like?
Reuters gets slashdotted... Slashdot gets Intel'ed!
I for one welcome our--- AGH! [tackled and beaten to death by slashdotters]
Sounds like a great article for the Intel Opinion Center!
Isn't that what lobbying is all about?
It's called deal making. If Intel offered me cash to use their CPUs only, I would take it.
It's called a rebate.
Mean what you say...say what you mean.
CPU's buy Computer Maker.
Apparently in Capitalist US as well.
"As God is my witness, I thought turkeys could fly." A. Carlson
This is very interesting since Dell was not putting AMD processors in any workstations or home PC's until recently. When I talked to my Dell Global Team here at my job, they basically said there was no intention of moving to the home market at that time, only in rackmount servers.
Nevertheless, Dell and Intel are very shady companies. I wouldn't put it past them at all. I even knew about slush funds for evaluation equipment from each of the main computer builders.
An accountant, a Lawyer, and an Engineer are all interviewing for a CEO job. As part of their respective interviews, the Board of Directors asks them what 2 + 2 is.
The Lawyer answers that it generally considered to be 4, but there could be precendants in which that answer may vary.
The Engineer takes out a slide rule, works for a bit, and answers that it is 4.000000000000000000000000000000000000000
The Accountant looks at the Board and asks, "What would you like it to be?"
If brevity is the soul of wit, then how does one explain Twitter?
Guess we now know why there's a new president.
I'd put cantaloupes as the processors on my computers for a quarter billion dollars per quarter!
stuff |
I suspect that there are some anti-dumping laws here that are being circumvented. It's the only thing I can think of that makes it illegal to lower prices below a certain level (which is what the end-result of that transaction is).
Those who can, do. Those who can't, sue.
> What's wrong with paying another company to carry only your products? Is it considered anti-competitive?
Yes, but not all anti-competitive behavior is unlawful. Dell and Intel are big enough, however, that it probably would be.
Additionally, this was a secret payment which is a very very big no-no. For all we know, it could have been a direct kickback to executives, which is the "go directly to jail" kind of illegal.
Done with slashdot, done with nerds, getting a life.
One way in which a monopolist controls the market is with public price matching. For example, if Intel publishes all their pricing, and guarantees that anyone going exclusively Intel will not pay more than say, Dell, then if Intel drops the price to Dell, they have to refund money to other all-Intel shops... perhaps Apple or other players that agreed to go all Intel to get price breaks.
If Intel gives Dell a 250m rebate, then they are actually charging below the price, and would have to match it elsewhere. However, by hiding the rebate, they can keep charging Dell a book value and collecting the premium elsewhere.
When big players negotiate big contracts, they often put in protections to not be worse off than the competition. I would expect the deal to be illegal because by not disclosing it, they MAY be in material breach to other companies. Further, Intel has signed consent decrees with the Feds over alleged anti-trust violations, and non-disclosed payments to keep competition out may violate those agreements.
This isn't a local computer shop contracting with a wholesaler, these are two Fortune 50 companies, sometimes they have arrangements covering them.
Also, what if a state government agreed to a deal where Dell was the exclusive provider in exchange for cost-plus accounting. Dell would bill on the reported cost, plus profit margin, and then collect the rebate.
There are a bunch of reasons why this might be illegal because it is potentially defrauding other companies IF their deals are dependent on Intel or Dell's pricing structure.
As un-/. as it seems, I actually read the article, and I don't get it.
OK, this is probably illegal. But defrauding the shareholders by artificially increasing profits? Huh? If a company finds a way to make an extra billion and change each year, don't shareholders usually consider that a good thing?
I've seen the Vista ads in which Microsoft compares Vista to the fall of the Berlin wall and the man-moon shot (ooookay) and in this end instead of an Intel logo, we get an AMD logo. Kinda interesting. But off-topic...
If Nalgene water bottles are outlawed, only outlaws will have Nalgene water bottles.
I found it sort of funny that Dell finally started offering computers with AMD chips around the time that Intel finally caught back up to AMD performance-wise. There were a good 2-3 years (at least) when AMD was the clear leader in terms of both price and performance when you couldn't get AMD from Dell. Now that Intel is back on top (at least in terms of performance), Dell has finally gotten around to offering AMD.
I'm not at all surprised to hear about the lawsuit - it seemed to me that the only reason Dell would be so slow to adopt the clear performance leader is if they were getting some special kickbacks from Intel (though I'd guessed it would just be in the form of really, really good discounts for Dell as opposed to actual cash payments from Intel).
Financial statements are public and they never include per-unit prices for raw materials and parts. They include a lump sum "Cost of Goods Sold" which includes the total price for all raw materials and parts consumed per business (if it's broken down that way). If Dell is worried that other companies can read their financial records they have more serious problems to worry about.
Mmmm.. Donuts
The feature length film starring Burt Reynolds as Kevin Rollins will be out next Friday.
Seems a bizarre way to bribe them.
Why not just have an agreement, and then heavily discount the price of CPUs?
I don't know whether having such an agreement would be illegal, but I doubt selling CPUs cheap is.
The article is vague on details but it sounds like they are alleging that Dell recorded the Intel money as part of their revenue instead of discounting it from the COGS as they are supposed to do. I still don't see how it could inflate their profits as the suit alleges.
Mmmm.. Donuts
It is the same thing as if Dell was selling cocaine, and claiming that the proceeds from that were due to their super-fine computer business. People would be investing in them because they had such great metrics in the sustainable, legal business of selling computers. This is apparently not the case.
It also means that they will likely perform poorly compared to previous quarters. Stock value is about looking forward, not back - the price rises on what people think will happen next. In other words, speculation. Lots of folks will lose money because of these secret, and likely, illegal dealings. Hence the lawsuit.
Moreover, this behavior may open Dell to substantial unrelated lawsuits - which means that the folks in charge of Dell were neglecting their fiduciary responsibility to shareholders. Again, a perfectly valid reason for shareholders to sue.
I hope that Dell is gutted for this.
Relax, it's just a little joke.
From TFA "The lawsuit accuses Dell of artificially inflating profits "by secretly receiving approximately $250 million a quarter..."
1) Well, if the USD250 mn received was accounted for (thus "inflating profits") how can it be secret? If the rebate was illegally pocketed by execs, that would be "under the table".
2) Last time I checked, it was not "illegal" to offer quantity discounts/rebates to large customers. Hell, according to the law firm's logic, buying at CostCo is illegal because they offer quantity based rebates!
3) All criterea for revenue recognition were fulfilled - the amount was a revenue receipt and was actually received. How can then it amount to "artificial inflation of profits"?
The law firm is just out to get some free publicity and slashdot's editors are too willing to help.
The article itself is using "illegal" in the vaguest terms. It may be illegal to have offered and accepted the kickbacks - I think US law allows what amounts to bribes in those industries where they are a common and widespread part of doing business (and as long as the bride taker is not a government entitity or certain healthcare providers). For Dell, it most certainly is illegal to conceal the source of revenues from shareholders, and also from the IRS. From Intel's standpoint, it would be illegal to have offered kickbacks, and then not account for and declare them as such to shareholders and the IRS. Overall, though, it sounds like the article put that line about illegality in just to grab readers attention.
What a waste. Intel should steal a page from Exxon's book.
For the meager sum of $10,000, this computer professional will gladly write a paper about the awesomeness of Intel CPUs.
I wonder which of those guys looks worse; Intel for offering the bribes, or Dell for taking them? This also shines a new light on the Apple+Intel situation. Who knows what happened with them.. maybe the same kind of behavior got Intel into the new Macs??
Blerg.
I'd like to see if this digs up anything along the lines of Microsoft marketing kickbacks and how it tied Windows to the OEM like thumb and index fingers on a child playing with superglue( or white on rice, stink on shit, etc ).
I've heard that over 20% of Dells profits come directly from marketing Windows. you know, 'we recommend Microsoft Windows XP' on ever page on it's website, the 12 MS windows stickers on keyboards, mice, monitor, case with ever new Dell PC. Oh, and don't forget the 'there are too many Linux distributions so we'll just wait on that' from Dell.
Then, must maybe people will understand why HP, Dell, etc don't ship Linux. After all, those 'marketing dollars' were not part of the DOJ vs MSFT settlement and pulling any of that back because of interest in Linux would not be breaking the settlement rules. What this means is that it would take a whole new case, a long drawn out case as opposed to the instant sanctions possible from settlement infractions.
Still, it's too bad Dell had to resort to accepting this instead of promoting competition in the CPU market. I guess it was easier for them to stick with one vendor as long as they kept kicking back $$$ at ever rumor of Dell going with AMD. This might not look good for Dell.
LoB
"Anyone who stands out in the middle of a road looks like roadkill to me." --Linus
The lawsuit accuses Dell of artificially inflating profits "by secretly receiving approximately $250 million a quarter in likely illegal rebate kickbacks payments" from Intel in return for an exclusive deal to purchase Intel's microprocessors, class-action lawyer William Lerach told Reuters.
There's some smoke here and probably a fire below it given how corrupt the decision making process is in a corporation. But it's not really actionable by a money trawling lawyer. The SEC certainly doesn't care. Otherwise they could make Elliot Spitzer's recent accomplishments look like a drop in the bucket.
The plaintiffs also contend that the company and its executives participated in a "widespread, long-running scheme to defraud" shareholders and inflate Dell's stock price, said Lerach, head of law firm Lerach Coughlin Stoia Geller Rudman & Robbins LLP in San Diego.
Bingo! This is how the lawyer gets his and the only reason we would ever hear anything about it. I don't see shareholders benefitting in any way shape or form.
http://www.maxineudall.com/2010/02/should-economists-be-sued-for-malpractice.html
A quick look shows Intel's profit as being $5 billion a year, and Dell's as being $3 billion. A payment of $1 billion a year from Intel to Dell is a pretty significant financial event for both companies...
I thought the IBM/Intel/AMD processor wars have been good for users, no? Wihout Intel, wouldn't AMD just be a "horrible monopolist." I think the last decade has shown some really great swings from IBM to Intel to AMD and now back to Intel in terms of pure performance, and even price/performance. The tech that is coming out of the market is pretty sweet. Intel's chips are now faster and cooler- thanks to AMD- and it looks like AMD will continue to bring the market around to more efficent processors. It's seems all good to me...
If this is true, I hope Dell pays for it. Since this is a class-action lawsuit, who will be the benefitors of any sort of settlement?
Lawyers.
This is the firm that's made a tidy living sueing the hell out of public companies whose stock drops suddenly. Guess the stock market is doing so well that they've decided to sue for prices going in the upward direction as well. Usually the target settles out of court because winning the legal battle would cost them more. A few years back they sued a company whose stock I own. In that case the company fought them off, but it cost me and the other stockholders (in whose names Lerach was sueing, thank you so much) several million. May Lerach and his ilk rot in hell.
How is this different than Intel simply giving Dell a lower price on their CPUs, or a "rebate" of sorts? In the end, the net flow of money is from Dell to Intel. Would it be perfectly fine if Intel sold Dell CPUs at $1 each, in order to make it silly for them to use AMD?
I'm just not seeing exactly where the gain lies in this kind of action.
Intel pays Dell to carry only Intel's products, rather than AMD's as well.
In order to make this worthwhile to Dell, the payment has to be significant enough to not only outweigh the potential loss from NOT carrying AMD's project, but to also outweigh the legal risks that have suddenly become quite apparent. We're probably looking at quite a chunk of change here.
On the other hand, Intel still needs to make a profit, so they have to stand to gain from the deal, meaning that they have to make more money extra than they lose with the bribe, and preferably outweigh those legal risks at the same time.
These numbers are all arbitrary for the purpose of example. Don't criticize the exact values please.
Lets say the average Processor goes for 300, and the final product averages 1k, and Dell ships half Intel and half AMD, and is pushing a margin of 1k units, so 1mil cash coming into Dell, 700k after cost for the processors. Lets assume 80% of Dells customers dont care about the processor, 10% will NOT buy AMD, and 10% will NOT buy Intel. In this scenario, Dell loses 100 sales, or 100k out of 1mil, reducing their gross to 900k. Assuming they don't prebuy each processor, That drops them to 630k after processors- a loss of 70k per 1000 units that would have sold previously.
For Dell to break even with that loss of sales, Intel would have to pay 70k to Dell per 1000 units, or 70 per unit (nearly a quarter of their per processor rate in this model). To break even as far as gross sales go, Intel would have to sell 153 more units. This, however, would still be at a reduced percent profit. In reality, Intel would be selling 400 more units with this model, at roughly 75% of their former profit margin. 243k vs. 150k gross.
Of course, breaking even wouldn't be enough, given that there needs to be incentive for Dell to do this, and that there are potential legal issues involved. In this scenario, Intels bribe is 70k per 1000 units for Dell to break even, with Intel getting just under 100k extra in gross sales, not factoring in the lost profit margin per unit. Rounding it up to 100k, and giving all that to Dell for the sake of argument: Dell gets an extra 100k above and beyond what they would have gotten otherwise- a 10% increase in profits. Expanded over a larger volume, I'd say that that is just incentive enough to risk the legal issue in and of itself- but consider that by doing this, Intel actually grosses less than in the original model, and at a lower profit margin per each item as well. Obviously, the numbers wouldn't be anywhere near those, but the idea is the same. In this model, how does ANY side benefit?
Also try installing XP or Vista without the CD/DVD that was shipped with you.
First thing I did when I got my dell laptop was to wipe the hard drive, partition it for dual boot, and install XP Pro (for which I had a license) instead of XP home that the laptop shipped with.
No problems at all.
Everything I need to know I learned by killing smart people and eating their brains.
2: Dell is alleged to have received $1 Gigabucks kickback/payoff from Intel last year alone, and not accounted for it properly to its shareholders.
3: Dell is in deep $hit.
Analysis: Sticking with Intel so long was a bad move all around, and one that money alone cannot fully make up for.
Further Analysis: Michael Dell was very smart to have Rollins available to be the fall guy for the past 2.5 years of terrible results, and is now well rid of him just in time for a Dell resurgence that he will take credit for.
"It's the height of ridiculousness to say for those 9 lines you get hundreds of millions."
Intel was a monopolist loooong before AMD was in the picture. We're talking 8086 on up.
Monopolists almost by definition do underhanded, unethical, and illegal things like these under-the-counter transactions, because without them the market would never have become theirs in the first place. That's why AMD and Transmeta could never be on a level playing field with Intel, they're just not corrupt enough. The myth that this is just healthy competition between like-minded companies needs to be dispelled over and over until everyone understands just what has gone on and is still going on today.
Michael Dell has handed the CEO reins back to Kevin Rollins.
My beliefs do not require that you agree with them.
*looks at home built Celeron machine*
*looks at old home built PIII*
*looks at dual pentium pro server*
Oh noes! It cannot be! Would these 3 machines spanning 10 years possibly be.... Intel processors bought from the "free market"? They must be Cyrix M2-300s or Motorola 68000s with Intel stickers on them, because Intel would surely never release their sub standard rubbish onto the open market.
I hate to inform you, but you can buy Intel components in the open market!
You know things are bad when former spin offs (what would become Accenture) pay 1.2B to AA to NOT use the Anderson name
JON
I was with you up until:
Very similar to the concept of a government security clearance.
How do you mean? Speaking as someone who had a security clearance, it doesn't entitle you to free stock tips on the golf course, or really anything else particularly interesting. It's more just a prerequisite for employment; the biggest benefit is that it makes you look like a more attractive employee when certain companies are looking for staff.
"Ladies and gentlemen, my killbot features Lotus Notes and a machine gun. It is the finest available."
This was public knowledge when I worked there. I wonder why it's taken so long to come to light.
Okay, not really. The presence or non-presence of any CPU vendor's technology inside of any device is generally a net factor of the money which must change hands to put it there (think of it more as a rebate and less as a kickback, and perhaps it won't sound so dirty). Likely the same reason why the original Xbox, which originally was going to have an AMD CPU, ended up with an Intel CPU.
Anyone who thinks that AMD got in and Intel got back in due simply just to processor technology or speed is kidding themselves. It's all about money.
Did AMD and Via come together and get class action status?
What's wrong with paying another company to carry only your products?
If you have a dominant position in the market, it may violate antitrust law.
Selling at a low price is fine, always. But if you have a dominant position in the market, there are things that you aren't allowed to do:
You can't sell below cost, called dumping. The tactic is to bankrupt the competition and raise prices after they're gone.
You can't bundle products together so as to create a monopoly in a new area by tying to products from an existing monopoly.
You can't punish customers for buying from a competitor. Reward them for buying from you, yes. Punish them for buying from the other guy, no.
If you don't have a dominant position in the market, you can do those things. Sell below cost, buy market share, and the competition will have its chance when you run out of money. Sell unpopular products by bundling them with popular products, and watch your popular products become less popular. Require exclusive contracts, and watch customers switch to vendors willing to satisfy customer needs. You can do these things because market forces will correct attempts to manipulate the market. Under normal conditions, the market will reward efforts to compete and punish efforts to inhibit competition.
But a company can have a commanding position in a market, such that they aren't hurt much by tactics which reduce, inhibit, or eliminate competition. That's where antitrust laws come in. If you can get away with actions that stifle competition, then you are a monopoly in the legal sense, if not the pedantic sense beloved by shills. That's how the court determine if you are a monopoly. If you can raise prices without losing sales, you may be a monopoly. If you can afford to sell below cost until the competitors are out of business, then you may be a monopoly. If you can force unfavorable contract terms on your customers without losing them, you may be a monopoly.
Rewarding Dell for buying from Intel is one thing, and rewarding Dell for helping drive AMD out of business is another. The distinction between gaining sales for Intel and punishing sales by AMD can be subtle, and that's what the courts will wrestle with.
If only they'd had the same foresight with the OS they chose...
I am TheRaven on Soylent News
AMD existed even back then. For the rest - see the "Wintel" discussions, which you provided an adequate synopsis for.
The cesspool just got a check and balance.
I knew they were around, but I was under the possibly mistaken impression that they were not directly competing until around the 486 days. I may be thinking of how it turned out as a situation rather than how it was formally constructed. Thanks for letting me know this, I'll check this out.
Just because you're a monopolist doesn't mean you're providing sub-standard stock. Look at Standard Oil. Nothing was wrong with its gas, it just used it's market power to kill off all other competition, and then priced their product with monopoly power during those times there were no competitors.
The cesspool just got a check and balance.
The lawsuit accuses Dell of artificially inflating profits "by secretly receiving approximately $250 million a quarter in likely illegal rebate kickbacks payments" from Intel in return for an exclusive deal to purchase Intel's microprocessors, class-action lawyer William Lerach told Reuters.
. v=8
Intel denied the accusations and said that some of the claims appear to "rehash" similar complaints against the chip maker by smaller rival Advanced Micro Devices Inc.. A Dell spokesman would not comment on the lawsuit.
Gleaned from;
http://biz.yahoo.com/rb/070202/dell_lawsuit.html?
The truth shall set you free!
Yeah I knew they were around, and I should have stated that, my implication by saying that they "weren't in the picture" was that they weren't in direct competition at that point, which I remembered as starting around the 486 days. Someone else just commented that this was a mistaken assumption, and I stand corrected.
My question to address this then is, if indeed AMD was a second source for the 8088 way from the beginning, how did the situation evolve such that Intel didn't suffer any competition until relatively recently? Why wasn't AMD doing the same thing back then?
on recompiling versions for Linux ? OT, but I'll bite.
I guess you've never tried to port a piece of Windows-specific code to Linux or some other open platform.
It is simply impossible if it is written to the Windows API and the message system. A complete rewrite is easier. Yes, you can pillage the original code, but the UI code is usually much bigger than the part that does the actual processing.
thegodmovie.com - watch it
Presumably Intel paid different amounts for different types of CPU endorsement, so given that I have a dual Xeon under the table, should I be looking for my share inside the case or...
boakes.org
AMD == Germany -> Europe.
Intel == US, where it just happened to be in the center of the computer revolution.
The cesspool just got a check and balance.
Er, most lawsuits don't go to trial, because it's often much cheaper to settle than to go to court. The courts are structured so as to encourage parties to settle. That's not legal extortion, it's good business sense for both sides.
They did, there was IBM PC DOS, MS DOS, and DRDOS (came later). In addition, there were several other systems that ran on the 8088, including CPM.
The cesspool just got a check and balance.
Kerry LOST! We're stuck with W for FOUR MORE years, and TWO of them have gone by already. (Does that make the glass half full or half empty?) Iraq is now a total fiasco, the Taliban are resurgent in Afghanistan, Iran and North Korea are pretty much rubbing our noses in it... geeze, is there any GOOD news? Well, I don't know, W kind of acknowledges global "climate change," but he's still an oil man and always will be. Damn.
Oh, you meant president of DELL.
Oh, yeah, it's not easy to pad these out to 120 characters.
That requires ever bigger CPU's and then pays off Dell to purchase the CPU's. Seems like reasonable free market capitalism to me. I can't imagine why the Libertarians here would object to that. They're just competing differently.
When a major computer manufacturer crams their PC systems with proprietary hardware and software, and only offers Intel processors despite ther obvious drawbacks (high cost, underperformance), it is obvious that they are getting some kind of deal from their processor supplier. Honestly, the majority of Dell products are below par for anything more that minor gaming.
Being a system builder, I am deeply skeptical of the prodducts that Dell offers. When I needed to build a new system, my father suggested that I give Dell a call, since his company has a contract with them as a supplier and he could get a steep discount. So I gave them a try.
One afternoon, I called them and told them that I wanted to order a custom system. I told them that I wanted a systems that could be used as a server as well as a high-end gaming rig (I was anticipating using it as a server in the future and wanted to use it initially as a gaming and rendering rig). Right off the bat, the salesperson said that they don't specify what kind/brand of parts they put in your computer. THAT was the first indicator of generic parts. Second, they would not allow me to specify what parts I wanted in my 'custom PC (custom being relative to what THEY wat to put in it, not what I want). The only processor they would install was an Intel (I wanted dual AMD Opteron 242's), generic sound and video cards, generic motherboard, generic 350W psu, and generic HDD.
Checking out Dell's 'custom' website, I noticed a few things:
"Dell Roccomends Windows Vista Home Premium" ---Obvious Contract Promotion
AMD processors are now being offered alongside Intel CPUs, but the graph they provide shows an obvious bias toward Intel, seeing as how the processors are hideously overpriced. Must be because gamers (the people most likely to be picky when ordering a custom system) kept asking for AMD processors, and then left when they were told that they would only get Intel.
ONE THING TO REMEMBER: When you buy custom computers from anybody, but most definitely DELL:
YOU ARE GETTING A BUNCH OF PROPRIETARY JUNK THAT WILL BE EXPENSIVE TO UPGRADE.
Knowing Google's lust for data collection, the Soviet Union is still alive and well inside the psyche of Sergey Brin....
So last week there was a story about a man getting a free trip into space, but having to pay tax on the prize. Some people floated the suggestion to sell the trip for $1.00 or something like that to lower the tax burden, but it was discussed that this wouldn't work because you have to pay taxes on the fair value of the property/prize/service received. This brings up the questions, that if a company like Intel is giving Dell processors below fair value, to try to convince them to only sell Intel based products, should this discount have to be accounted for as income.
.. and Michael Dell returned. I guess its to avoid liablity with the rest of the company so the former CEO can be sued instead.
http://saveie6.com/
Bias-free semiconductors never really took off.
With all the hubbub about backdated stock options, one might think they are illegal. They are not (yet) and never have been. However, they must be properly documented. Sneaking them in so the shareholders don't notice as easily is the fraud that makes them illegal. The same is true for any under-the-table cash. Dell is not, nor has ever been high enough up to worry about antitrust violations. If they took the cash and put it under the proper line on their financial forms, there would be no problem. Intel might have some issues to work out, but Dell would be blameless. However, if they hid it by fraudulent means (reporting it as something it was not) then they are in trouble.
For some reason, companies like to lie about where cash came from and went, even when it went from legal places to other legal places. Transparency is the most critical thing, and they are sacrificing it for appearances, and ending up in court. If they lied on a financial statement submitted to the FTC, they should be punished. Though I can't imagine what harm came to the customers from this, as Dell is not a monopoly and there were many other competitive choices for the consumers.
Learn to love Alaska
Intel and DELL discuss the forward CPU buasiness between them. Dells says we ae going to sell approx X + or - 5% PCs nect year. Intel says well we will sell youour CPUs are $y per unit cost, however if we approach X in volume we will repay you $250mm. DELL says well that seems good to us, it's a done deal. Now what has DELL done wrong? They have negotiated the best possible NET unit cost for a supply of CPUs which advanatges them to sell more PCs and which advantages SHareholders who will see a growing and hopefully as profitable busines as possible? Under such circum,stances I see any shareholder suit of DELL as entirely without merit as both DELL's customers and shareholder have benefited.... Now over at Intel I have no idea whether they have broken any other side agreements with other OEMs. I also do not think that there was a person alive in the industry who did not know that DELL was getting superb pricing from Intel.
Cheers,
Toby Haynes
Anything I post is strictly my own thoughts and doesn't necessarily have anything to do with the opinions of IBM.
Comment removed based on user account deletion
It depends on what you mean by competing. AMD had a license to use Intel's designs for x86 chips up to (as I recall) the 80386. With the i486, they could not just fab their own parts from Intel's designs, so they had to create their own 486-clone. AMD 486 chips were not very good, although by the end of the generation they were going up to around 125MHz, while Intel were only shipping 100MHz parts (to encourage people to move to Pentium systems), so some people used AMD chips as a quick upgrade. Their early Pentium competitors weren't great. The K5 was not much better than a 486. The K6 was a bit better, but still weak in floating point. The K6-2 and K6-3 were strong competitors against the Pentium, but didn't quite stand up against the Pentium Pro or Pentium II. The K7 (Opteron), finally gave AMD the performance edge, as well as the price:performance crown. They pretty much held on to it all through the NetBurst debacle, before losing it to the Core 2 (and the Pentium M / Core in some market segments earlier).
I am TheRaven on Soylent News
right right. Then how did competition between the two during the days =386 play out? Was AMD just a physical supplier more for Europe?
It looks like Dell is not the only company that will need to answer for these actions.
Saying Java is nice because it works on all OS's is like saying that anal sex is nice because it works on all genders.
I've worked with distributors who simply *will not* carry an AMD processor, because they would lose their special pricing from Intel if they did. Whether Intel is handing out kickbacks or just giving lower prices up front, I don't see much of a difference apart from semantics. Either way, they're using a market pressure to keep AMD out of as many shops as they can.
Whether that is *bad* or not is an entirely different matter, and one that will never be agreed upon by the various parties.
Oh, you're not stuck, you're just unable to let go of the onion rings.
Wasn't it the floating point bits that they couldn't directly use from Intel? Intel held close hold on the 8087/80287/80387 IP and it wasn't until the '387 generation that spotty and ill-performing clone chips came on the market to compete with Intel. With the 486 generation (integrated floating point coprocessor) AMD couldn't just sling out licensed exact copies anymore.
AMD was one of the 'second source vendors.' Without a second source vendor, many design outfits won't put your chip in the design. In particular, for critical military stuff there HAS to be a second source.
Intel licensed AMD to produce parts. They had to.
Can anyone tell me why Intel is being sued by these investors rather than the most salient victim -- AMD? I don't know anything about this kind of stuff. Does AMD stand to be directly compensated in the case that Intel loses this suit, or is AMD going to merely be screwed less in the future by the cessation of Intel's illegal activity? or what?
. In this model, how does ANY side benefit
Well what is "market share"?
Were you using AMD processors when Intel had 90% of the market? Were you anxious to go out and get a Cyrix CPU? If none of the top 10 computer vendors were selling anything non-intel, would you have gotten one?
This scenario would have two advantages:
1) Increased sales
2) "Comptetitors" wouldn't get much sales, thus it would be more difficult for them to develop a superior product... Paving the way for continued future domination...
If you think Intel is breaking even on the "bribe" to Dell , it is only that Intel is really ahead.