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Print 29 comment(s) - last by Trisped.. on Jun 29 at 2:06 AM

Dear Mr. Hector Ruiz,

After I heard your speech at the American Antitrust Institute in Washington, D.C., I couldn’t believe my ears so I had to write this down. First of all, I agree that you have some valid complaints about Intel. However, you and your lawyers took it way too far. You’re making it look like Intel is forcing others not to sell your products by placing military troops at your door; which is not true.

You claimed that Intel is a monopolist and Microsoft isn’t. As far as we know, Intel is not forcing software developers to write software and games that will work only on Intel’s hardware. But ... Microsoft is taking related actions toward Apple for example, so Intel and Microsoft do not appear to be in the same ‘Monopolist abuser’ league.

I really think you guys took it too far with that Intel U.S. Antitrust case. Yes, Intel is big and uses certain pressure tactics which some may break the U.S. laws; but you can’t blame them for everything. It takes two to Tango, and Intel cannot dance alone. You’re dancing with them instead of working on making better products for AMD consumers. It appears that you want to spend money on lawyers and ridiculous antitrust laws which will likely lead you nowhere.

The important thing in competition is you need to work hard to increase your companies chances of winning. If you’re sitting down and whining about your competitor, it will get you nowhere. Don’t get me wrong, I’m not here to make fun of you nor AMD. I’m here to try to help you, despite the aggressive criticism.

Instead of dedicating your time and your money to this case, concentrate on working hard to provide better products. Let’s take a look at the latest R600; we all had very high expectations about it yet after reading results, I burst into tears. Personally, I like ATI/AMD, (especially after NVIDIA tried to sue me) but I must admit that the R600 simply doesn't cut it when compared to the 8800 series from NVIDIA. You can probably cook eggs on it due to its high temperatures (And maybe Barbeque), and the performance is a joke. Perhaps a lower pricing point instead of where it currently sits, which is too close to the GeForce 8800 GTS. Also reports that you need a small nuclear power plant to run it in Crossfire, does nothing to entice the high end users to dig into the wallet.

Take a look at your processors line - which is not bad at all. But again, there is such a mess in naminig the SKUs that like the majority of others I’m too confused. I’m a member of the press, I do receive information time to time, and I still don’t understand what the hell is going on. If the press dont get enough insight about your current product line let alone upcoming products, how the hell would the consumers know? Every two weeks I’m getting new information but I turn around and see some new products in the shop that you guys never told us about. Even though, when it comes to processors, you’re not too far behind to still offer Intel competition.

Here is my take on what your problem is!

Your marketing simply doesn't exist, and you think the world market rotates strictly around the United States. The world is not based just on the United States or OEM's like Dell. Stop using your time and resources on these antitrust lawsuits inside the United States, and all these system builders/suppliers. There is a big world outside of the U.S.! There are 6,555,000,000 people on earth, and only 300 million of them live in the United States of America.

Your real problem is that you failed making AMD and the Athlon into famous brands. For example, if I travel to Africa and ask someone on the street: ‘Where can I find McDonalds?’ chances are they could give me exact directions. And in McDonalds’s, if I ask for Coca-Cola and a Big Mac, they will have it for sure. Why? Because these are known brands as well. After I ate, I want to buy new shoes, and as you know already, everyone knows Nike. Do you get my point? If I ask someone about Intel or Pentium, they will probably know what I’m talking about; because these are known brands as well.

Do you know why? Because you guys never advertise! You’re not dedicating enough resources, efforts or time in other countries. Intel is out there making deals with governments and advertising on TV nonstop. How do you expect people to hear about you and your products? I have never seen an AMD ad in my country, unlike Intel’s.

Let’s admit it, most home users only use PCs for basic needs. Not everyone is experienced like us. If you ask a newbie, ‘Which processor do you want? AMD or Intel?’ They would say Intel. Why? because that’s the only processor, they have heard of. No one will buy your products if you’re not advertising and letting them know.

Just for your information, a few years ago when I worked in a hardware shop here in Israel, we had a lot trouble getting AMD products in our country, basically due to the lack of worldwide distribution lines, that again shows us weakness with your marketing and international support.

So how do you break a monopoly? Not by these lawsuits in the U.S., but by increasing the demand for AMD products. If you start working in more countries, placing advertisements in the media, open new marketing offices, you will get far more recognition. If some retailer is working only with Intel, after many user requests, they will have no choice but offers your products as well.

Every business wants to generate income with minimum costs. Every business wants to make high sales, but if 30% of their customers are demanding AMD’s products, they will have to provide it, or lose a lot of money and customers. Instead of whining about monopolies, how about you start to work on creating demand?

How much money has AMD spent on litigation since 1997?

Let the public know about your current and upcoming products. Work close with the press so they will like you, put ads in newspapers and TV stations to attract basic users; and focus on making better products. Focus on making AMD into a known brand like Coca-Cola everywhere! Not only in the United States.

As I said, You need to increase the demand, and only then will you see Intel’s empire falling down - even without U.S. Antitrust lawsuits. So please instead of crying and whining to Uncle Sam about Intel’s illegal behavior, work to fix your flaws and offer us some real competition. Don’t blame Intel for monopolist behavior; blame yourself for letting them do that, and for failing to offer international competition like you should.

Don’t forget that we are the consumers, we buy your products, we decide which processor to buy. All you need to do is to convince us/shops to pick your product, and if you’re failing to do so, you’re pushing them into Intel’s nasty hands.

Eran Badit


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Well said
By dever on 6/26/2007 1:26:52 PM , Rating: 2
Well stated. I've purchased AMD in the past, when it was the best deal for the money. I had no problems finding AMD products or supporting hardware. This doesn't sound like a monopoly to me. Hector's whining doesn't impress me. These sort of court tactics always hurt the consumer themselves. I'll definitely consider his stupid remarks when I make future purchases.




RE: Well said
By Sazar on 6/26/2007 4:40:23 PM , Rating: 2
Work in the business, you will see things in a completely different light.

Setting up channel partnerships and working that route as opposed to viewing it from a regular, off the shelf buying consumer is a whole other cup of tea my friend.

The rant, which is essentially all this op-ed amounts to, has a couple of decent points but it doesn't appear as though the writer has much of an idea how channels work and the nature and type of incentives on offer.

Feel free to read the publically available details on the lawsuits and the various FACTS surrounding the case. Alternatively, WORK in the business and have some know-how about what is going on and you'll be enlightened.

Hector's "whining" is essentially frustration at things remaining in a defacto status-quo, regardless of how hard AMD has worked. If any one of you who are bashing him were in his shoes, I would be shocked if you didn't share his sentiments, including the original poster.

AMD spends a lot of money on products and designs them from a different perspective than Intel typically has done. They usually have more advanced components and marchitecture layout, even though they have to conform to Intel's industry standard (no hint of monopoly?)instruction sets.

I do not profess support of one party or the other but given some of the more ignorant posts in this discussion thread, I felt it prudent to speak up from the AMD perspective.


RE: Well said
By TomZ on 6/26/2007 4:49:38 PM , Rating: 1
quote:
any one of you who are bashing him were in his shoes, I would be shocked if you didn't share his sentiments, including the original poster

You mean that if I were being paid millions of dollars to run AMD, that I might be more sympathetic to the view he states? For sure, yes!

I'm sure he believes 100% in his heart that he is right. But what I see on the other side is that AMD's missteps along the way and their inability to execute as well as Intel, hurt them a lot more than what is potentially going on "behind the scenes" as you describe. The fact of the matter today is that they are completely lacking a competitive product. There is no way that can be blamed on Intel (except that Intel developed a better product).


RE: Well said
By Sazar on 6/26/2007 7:35:50 PM , Rating: 2
I think the point you are missing is that one of the reasons for the mis-steps is the influence of Intel.

Let me try and explain. If you produce a product and it is superior to mine, but I have a lot of clout/money/what have you, and I manage to retain a lot of business while still utilizing my position of dominance to invest in more R&D to better my lineup in the future, you are stuck with gaining minimal market share.

You will continue spending a lot of money to develop products but no matter what you spend, I can easily outspend you and offer vendor incentives to stick to my product. Doesn't matter if you have a better product.

You, therefore, have a lower net revenue stream coming in than might be expected for someone who has the dominant part on the market. You fight back the next best way by dropping prices to increase demand and, in the short-term, this is successful in netting some more percentage points.

However, you lose margin (i.e. profits) and go into debt to stay competitive.

In the meantime, I can allow a portion of my cash mountain to dwindle as I also cut prices. For the heck of it, I might just start a price-cutting war because I can afford to.

you have less "profit" coming in and it makes it harder for you to invest in R&D.

Now, even if AMD had the better product coming to market and did so for 3 or 4 successive cycles, it neither has the capacity in its FAB's, not the financial might to overtake Intel. It will, at best, be able to garner 25-35% at it's peak before Intel strikes back.

While AMD has invested heavily in superior marchitecture, Intel has had the luxury of creating a better product while simultaneously developing lower TDP tech. Combine the two and you have a winning combination. AMD doesn't have the luxury of doing the same.

Into this scenario, if you put in more competitive practices and prevent monopolistic ploys, you will see much more even revenue streams, more money available for R&D and, perhaps, shorter time to market for new products.

What Ruiz is saying, when you look @ the gist of it and remove the emotional content, has a sound economic basis. One thing leads to another and so forth, essentially a domino effect that is pushing AMD further and further out of the market, unless it can fix it's issues with the Barcelona based procs and get out there and compete solidly.


RE: Well said
By TomZ on 6/26/2007 8:21:01 PM , Rating: 2
I understand and agree with what you are saying, but the point I'm trying to make is that you have to figure out if any part of that is really due to Intel operating illegally. Since I haven't seen any evidence yet of Intel wrongdoing, I am more likely to attribute the cycle that you described to other issues, like not investing early enough in fab capacity, a complete lack of marketing, failure to develop great chipsets w/integrated video, decision to acquire ATI at that point in time, decision to initiate a price war with Intel, etc. Major mistakes that have costed AMD big-time. I see sufficient mistakes here to explain AMD's performance without trying to shift the blame to Intel.


RE: Well said
By clnee55 on 6/27/2007 12:06:58 AM , Rating: 2
This is denial. WHen AMD has a superior product athlon against Intel P4, AMD gains market share, why they didn't complain then. When C2D beats Athlon, AMD loses market share. That is simple. Everything else is denial.


RE: Well said
By clnee55 on 6/27/2007 12:13:20 AM , Rating: 3
"AMD spends a lot of money on products and designs them from a different perspective than Intel typically has done. They usually have more advanced components and marchitecture layout, even though they have to conform to Intel's industry standard (no hint of monopoly?)instruction sets."

Is that why they can't beat C2D.


Amateurish article
By 91TTZ on 6/26/2007 10:49:33 AM , Rating: 5
Why would this article even make it to the front page of a hardware site? It looks like a 15 year old wrote it.

Intel is engaging in anticompetitive practices, yet the author says that AMD is taking it too far by getting their lawyers involved?

I like this gem:

"I really think you guys took it too far with that Intel U.S. Antitrust case. Yes, Intel is big and uses certain pressure tactics which some may break the U.S. laws, but..."

The author is complaining that AMD got lawyers to file an antitrust case because of the little fact that Intel is breaking antitrust laws. Who would've thought?

This case has been a long time in the making. Intel was at it for at least 10 years. This was happening before Intel released the Core 2 Duo, before AMD released the Athlon 64, the Athlon, or even the K6. This has been happening since the K5 days.

AMD is justified for pursuing this case.




RE: Amateurish article
By TomZ on 6/26/2007 11:00:57 AM , Rating: 3
It's a blog post, not a news article.

And I agree with the author, which is basically that most of AMD's problems are self-inflicted. Ruiz' recent comments are just another tactic to try to divert attention from his poor performance as CEO.


RE: Amateurish article
By Trisped on 6/29/2007 2:03:37 AM , Rating: 3
I agree, Intel has not been playing fair. To its credit, Intel never has. Most of the DailyTech readers will be too young to know about the x86 lawsuits that Intel filed to drive the other three processor companies out of business. They tried to do it the AMD too, only AMD had the right to use the x86 architecture from the deal with IBM. Apparently when IBM was making their first desktop they wanted to have two processor manufactures, to avoid a monopoly problem. The first chosen was Intel, and second was AMD. If they hadn't do so we would have a very different PC world then we now have. We would either be locked into a greedy Intel monopoly, be dealing with a large number of competing processor architectures, or be stuck in the age of corporate owned and operated main frames.

So no, I don't think AMD did anything wrong taking Intel to court. Intel has had this coming for a long time.


RE: Amateurish article
By Trisped on 6/29/2007 2:06:33 AM , Rating: 2
Oh, and I am not old enough to know the Intel, AMD, IBM story first hand. My Dad was one of the enthusiasts when buying your own computer was composed of finding the plans, getting the chips, making the boards, soldering everything together, and then seeing what you could make it do.


Well....
By cheetah2k on 6/25/2007 8:32:09 PM , Rating: 2
Are you going to post this to Hector?




RE: Well....
By just4U on 6/25/2007 10:36:20 PM , Rating: 2
I'd like to know if he will respond to it as well! that would be interesting.

I found this part of the blog amusing (grin)

"You claimed that Intel is a monopolist and Microsoft isn’t."

Microsoft isn't a monopoly!!! .. Shoot they left that definition behind back in the 90s. I am not sure exactly what they would be considered to be now... but they are well beyond that stage, that much is for sure.


RE: Well....
By TomZ on 6/25/2007 10:46:44 PM , Rating: 2
Not sure what you mean. "Microsoft is a monopoly" doesn't mean anything to me. But Microsoft certainly does have a monopoly in desktop OS (90-95% market share) and probably also office productivity apps with Office. I don't think that has changed at all from the 90s.


RE: Well....
By danz32 on 6/25/2007 11:49:33 PM , Rating: 2
Yes, they still have the market share, but they are no longer as heavy on what was considered the monopolistic tatics used in the 90s

Google is definetely the new Microsoft (except everybody likes them)


RE: Well....
By just4U on 6/26/2007 10:00:48 AM , Rating: 2
I actually wasn't looking at it quite that way when I posted but I do agree Danz.

My comment wasn't really meant to be taken seriously Tom. I just look at it there are monopolies ... and then there is Microsoft which is what a Monopoly would want to
aspire to... given the opportunity.


Interesting
By Sazar on 6/25/2007 7:49:13 PM , Rating: 3
This is a cyclic thing. K8 products were released, AMD did everything to get into channels to be able to sell the products but because of various tactics used before and the failure of the channels (not regular consumers) to purchase, the overall market share only rose a little bit.

When a bank or investor looks at these projections v/s what the company needs to be procuring in order to invest, what do you think they are seeing?

All the big boys, Microsoft, Intel, AMD and what not have active interests who provide incentives to sell their products. Whom do you think can provide the best incentives? The people sitting on huge cash mountains or the ones who are massively in debt simply trying to keep their heads above water even with a superior product?

For 2 years AMD had the best processor on the consumer side. They needed to do a lot more on the server side and that is one of the main points that I agree with you on, but even so, 2 years of performance dominance yielding a scant few percentage points.

Come 2007, about 6-7 months of Intel dominance and ALL gains wiped out and now AMD is trending down below levels from almost 3 odd years ago.

Intel has cleaned up its act so it is extremely late in the game for AMD to be so actively pursuing this avenue. A few years back, yes, they had more than ample reason and opportunity but the case was not pursued as aggressively.

AMD still has money available and they can fight and, if they win, great. But, the fact is, as you point out, Intel has better products on the consumer side and absolutely dominating products on the enterprise front. Barcelona is not scaling well, the next round also looks like it will go Intel's way.

AMD needs a huge influx of capital to reorganize and get on the right path.

To sum up, I agree with some of your points, BUT I think you are being unfairly harsh on AMD. The onus is on them to produce good products BUT even if they have done so before, Intel has essentially kept it's market share. Think about that.




RE: Interesting
By Amiga500 on 6/26/2007 5:24:01 AM , Rating: 2
To sum up, I agree with some of your points, BUT I think you are being unfairly harsh on AMD. The onus is on them to produce good products BUT even if they have done so before, Intel has essentially kept it's market share. Think about that.

Exactly, if (and it appears unlikely at the moment) Barcelona is a star, what is the point AMD investing all that R&D money only to lose out to dodgy blackmailing from Intel.

Also - if this court action nets AMD, say, $500 million, will it not have been well worth the hassle?


RE: Interesting
By TomZ on 6/26/2007 4:13:02 PM , Rating: 2
quote:
Also - if this court action nets AMD, say, $500 million, will it not have been well worth the hassle?

No, I don't think so, since it distracts AMD from fixing their business. Even a $500M settlement will only buy them a little more time - it just gives them a little more time to get their act together.


FAB
By Ratwar on 6/25/2007 7:52:26 PM , Rating: 2
You know, every time I hear about Intel's monopoly, I just can't get over the fact that AMD's processors are still selling as fast as AMD can make them. In fact, I'm sure we've all heard rumors about a lack of supply when it comes to AMD (though I haven't seen any information confirming that). Right now, AMD's processors are selling so well, they've outsourced some of their manufacturing to Chartered Semiconductor Manufacturing.

If all of that is true, I just don't see how AMD was negatively effected to a large degree by Intel, especially when they were definitely able to charge a premium for the Athlon64 X2s before Intel released the Core 2 Duo.




RE: FAB
By PaxtonFettel on 6/26/2007 7:00:09 AM , Rating: 2
It was C2D that had the negative effect on AMD, before that they were doing very well. The fact that they may still be shifting huge amounts of processors (which I'm really not sure about anyway - I'm sure I've read plenty of articles stating their market share is down) is down to the price gouging they had to do to remain competitive in price/performance terms. This is also the reason that they're not doing so well: they're making very little profits by selling their chips at such low prices.


RE: FAB
By Ratwar on 6/27/2007 2:26:09 AM , Rating: 2
Yeah, but the fact that they're losing market share and lowering their prices due to the Core 2 Duo doesn't make Intel guilty of monopolistic/bad conduct.


Intel vs. Microsoft
By Jack Ripoff on 6/25/2007 10:44:26 PM , Rating: 2
quote:
"As far as we know, Intel is not forcing software developers to write software and games that will work only on Intel’s hardware."

Actually Intel is. Remember the Skype issue? Of course that's nothing compared to what Microsoft's done, nevertheless it tells some about the company in question.




RE: Intel vs. Microsoft
By TomZ on 6/25/2007 10:49:41 PM , Rating: 2
IIRC, Intel paid Skype to optimize the code for the Intel platform, right? I think this is fairly common practice.


RE: Intel vs. Microsoft
By oTAL on 6/26/2007 7:31:40 AM , Rating: 2
Not only that. They got Skype to enable up to 10 simlutaneous user conversations only on Intel processors, and spined it in a way that could make it seem like only Intel processors could handle it. Some dude then made a quick patch that allowed Athlons to do the same without breaking a sweat...


Kicking a man when he's down...
By dluther on 6/26/2007 8:45:25 AM , Rating: 4
Eran,

Oh come on!

Sure, nobody likes to listen to a loser whine about fairness any more than they want to hear a winner gloat about superiority. With that said, Intel is still engaging in anti-competitive practices by offering OEMs discounts and access to product lines through exclusivity agreements. This is wrong, illegal, and must be stopped to keep the playing field level.

Yes, AMD is in a sales slump. Their acquisition of ATI could not have been more egregiously timed, and their current line of processors simply don't compete with Intel's. But how much of that slump is due to Intel's predatory pricing, rather than product superiority?

While you yammer on about AMD's (lack of) marketing, please keep in mind that they had to lay off hundreds of people, mostly in the support and marketing areas to keep R&D as intact as possible. Or did you really think AMD kept an army of well-paid secretaries just waiting around for the pink slips? Well guess what -- you'll have to actually do some research when planning for that next uber-game platform instead of letting some PR firm fill your head with ideas and numbers. And is this really the forum for such a complaint?

Everyone clearly remembers, only a few years ago, when AMD raised the bar and took the CPU performance crown away from Intel. I distinctly remember many people at this very venue lauding AMD and jeering Intel as Goliath to AMD's David. However that has now come full circle. Perhaps by AMD's own actions made Intel a better company, but Intel was the one who engaged in the anti-competitive practices.

AMD achieved much through sheer technical innovation, and I would prefer that alone to dictate which platform is "better", rather than market manipulation.




A few points.
By iwod on 6/25/2007 10:26:57 PM , Rating: 2
The first poster made the point that AMD still have a lot of money. I dont know what he means by money but all i know is that AMD is in great debt.
My view is that even though AMD may have pick up ATI for a good price; the timing couldn't been worst. It makes them with low cashflow, in debt, add in the burden of ATI ( Delayed launch of R600 ), their own problem with K10.
On the other hand Intel has had the most successful product launch in recent years.

So the new and hungry Intel is back, stronger then ever fighting the troubled AMD. No question why Intel is hammering AMD now.

I dont know why Hector is crying like a baby. But out of Paul S. Otellini And Hector I like Paul much more.




At Least One Good Point
By Kougar on 6/26/2007 3:07:59 AM , Rating: 2
Afraid he has one good point in particular regarding marketing...

I know several people and even more hearsay regarding people this year still confusing the Turion and Athlon as Intel products... but I cannot recall anyone confusing "Pentium -whatever jumbo you want to insert here- " with AMD's product line. Heck, half the store employees didn't know what Turion was before it hit the shelves, or that the Turion X2 existed.




By indianpunk on 6/26/2007 11:45:11 AM , Rating: 2
quote:
Do you know why? Because you guys never advertise! You’re not dedicating enough resources, efforts or time in other countries. Intel is out there making deals with governments and advertising on TV nonstop. How do you expect people to hear about you and your products? I have never seen an AMD ad in my country, unlike Intel’s.


I se core 2 duo ads on tele/print /hoardings in india all the time with the "MULTIPLY ur Self " or something like tha ad campaingn but i never saw Amd doing ads on tv

quote:
Let’s admit it, most home users only use PCs for basic needs. Not everyone is experienced like us. If you ask a newbie, ‘Which processor do you want? AMD or Intel?’ They would say Intel. Why? because that’s the only processor, they have heard of. No one will buy your products if you’re not advertising and letting them know.


Here the assembled market is still on top of OEM's and in past 2-3 yrs Amd has always won the price to performance raqce so the above rule sometimes goes in amd's favour as the seller is usually recommending AMD

The markleting cycle is quite good here as the availabilty of product is quite good (trust me Our whole friends circle is Upgrade freak and all have amd's )

But yes its high time some1 chjallenged intel to the top level thopugh none of us is going to afford it i am still on single core and chances of me moving to dual are pretty dull after my father dropped the plans anyways
Mr AMD do something abt the matter that has been disscussed above




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