Intel wins at Monopoly, grabs $60bn unfairly - says...
You know who
AMD has fired another venomous barrage at its rival Intel today. Following the European Union's intent to investigate alleged antitrust charges against Intel, AMD has released a study claiming 43 per cent of Intel's profits are a result of monopolistic practices.
The study comes from the ERS Group and was commissioned by AMD.
ERS claims that consumers and computer manufacturers could gain more than $80bn over the next decade if the chip market was "open to competition".
From that figure, consumers would save at least $61bn over the period and PC makers would save $20bn. The report stipulates the vendors could use those savings to invest in R&D and provide additional innovation in the market.
"In light of the recent European Commission decision and prior Japan Fair Trade Commission actions, this analysis asks not whether Intel has engaged in anticompetitive conduct, but how much Intel has gained from the alleged conduct," said ERS group director Michael Williams.
ERS Group is an economic consulting firm that specializes in analysis for business litigation. The study claims the figures were calculated using publicly available information and standard economic methodology.
So let's break this down as best we can. Despite the fact that AMD is making a pretty damning claim against Intel, it isn't releasing the actual study in question. Instead, we must be satisfied with a summary of the results:
Alternatively, if you don't like numbers, we'll send you back from whence you came. Math is hard. Let's go shopping!
|Intel's total profits||$141.8bn|
|Result (economic profits)||$87.7bn|
|Economic profits from assumed advantages (5%)||-$27.3bn|
|End result (monopoly profits)||= $60.4bn|
The study first claims Intel has recorded profits of $141.8bn during a 10-year period. From there, the firm subtracted the costs of capital ($54bn, or 9.94 per cent). The result is an economic profit of about $88bn.
ERS said the $88bn profit equates to an economic return of 16.01 per cent. It continues that the figure stands in stark contrast to the economic returns of 489 other public companies examined. Intel's return was higher than 99 per cent of the large companies, including big names such as Pfizer, ExxonMobil and Target.
Only four of the 489 companies examined earned a larger economic return of 16 per cent. Those companies are Microsoft (38.25 per cent), UST Inc. (28.54 per cent) and Coca-Cola (16.58 per cent). ERS gives an additional jab, noting each of the companies have been associated with antitrust determinations.
Next, the firm said it gave Intel a "generous assumption" that five per cent ($28bn) of its economic return was attributable to "legitimate advantages." This gives the resulting $60bn monopoly profit figure.
"Intel's monopoly profits of $60bn directly contradict Intel's claim that its business practices have resulted in lower prices," said AMD VP, Thomas McCoy. "In fact this study shows that billion of dollars have moved straight from consumers' pockets to Intel's monopoly coffers."
Meanwhile, Intel has scoffed at the allegations, dismissing them as "wild speculation" based on unsubstantiated assumptions.
On Monday, Chipzilla issued a statement in response to the decision by the European Commission's objections to the company's business practices.
"We are confident that the microprocessor market segment is functioning normally and that Intel's conduct has been lawful, pro-competitive, and beneficial to consumers," said Intel veep Bruce Sewell. "While we would certainly have preferred to avoid the cost and inconvenience of establishing that our competitive conduct in Europe has been lawful, the Commission's decision to issue a Statement of Objections means that at last Intel will have the opportunity to hear and respond to the allegations made by our primary competitor."
Intel won't even call AMD by name at this point. Lovely! ®
Intel only dumps some of their line low to
mid products the high end is still incredibly
high and won't really come down stack that
up against AMD who keep all their prices
high and never lower them take too long to
deliver chips and you can see why Intel
wins, the shear ability to shit out chips
that at least kind of work in almost no
time should not be discounted I don't
see this as a monopoly game it's true
if your big it helps but they don't have
to do anything underhanded to sell chips.
Intel isn't a monopoly
Intel doesn't have the monopoly power to set the price of it's CPU's above the market level, because it does competition, and the products are more or less undifferentiated, as far as most consumers are concerned.
Hmmm? Skewed Intel...
"We are confident that the microprocessor market segment is functioning normally and that Intel's conduct has been lawful, pro-competitive, and beneficial to consumers," said Intel veep Bruce Sewell.
How can that statement be true, whenever, especially so in the microprocessor market segment, pro-competition can only really mean exclusion?
Unless microprocessor market segments functioning normally, function differently from traditional markets?
this can be summed up
"Says the pot calling the kettle black"
Seriously... someone tell those people at AMD to shut up and get their diapers changed.
They sound just as bad as Microshaft accusing ________ of monopoly or patent violation.
So AMD's problems...
are all Intel's fault. Of course they are. Not. Intel are not to blame for the poor supply chain of AMD. Have you ever tried to actually buy a high-end AMD cpu? "Should be in soon, maybe 12 weeks". Whereas ask for an Intel chip, the reply is usually "how many do you want sir?"
AMD have never actually designed a decent chip anyway. Going back to the 486 days, they were a copy of the Intel chip. The K5 was crap. The K6 was designed by Nextgen. The K7 on were co-designed by DEC.
When AMD can design a good chip, AND supply them in quantity, AND supply them on-time AND at a good price, then they will be serious competition. These law suits are purely AMD clutching at straws, trying to find someone to blame for their own shortcomings. Get your own house in order and you will be competitive.