Lion roars because of Intel chip pricing

Intel Developer Forum German distributor Lion said today it was forced to sell AMD chips because of channel conflict which Intel has failed to resolve. Karl-Heinz Muller, general manager of networks and systems at Lion, said that large shopping chain Aldi was selling systems using PII/400 and PII/450 systems at a price Intel would not give his company. Aldi's prices for so-called performance systems were so good that even his dealer customers were buying from Aldi. They are stripping down the machines and re-using the components including the Intel motherboards and chips. While Muller said that Intel had offered him a good price on Celerons, much of his business was concerned with SCSI workstations, which required PII/400s and PII/450s. However, Intel's inability to offer him a good price or provide him with any explanation means that he is being forced to use K6-2s. Lion is one of Intel's 25 Tier Three distributors in Europe and says it is one of the top five channel players. It buys something like 40,000 chips a month. Aldi sells the performance PCs at irregular intervals throughout the year, typically selling 200,000 units a time, which go like hot cakes. But Paul Otellini, a senior VP at Intel US, said: "Our pricing policies have stood the test of time. It is a level playing field. "Our discounts between large customers and smaller customers in single figures. Our pricing is very fair." ®