NVIDIA says Intel is pricing Atom processors unfairly and hurting Ion sales

The competition between Intel and NVIDIA is fierce with both companies fighting for the integrated GPU market in notebook and desktop computers. Intel holds the largest portion of the GPU market in netbooks, while NVIDIA sits in the second place spot and holds the majority of the discrete GPU market.

NVIDIA announced its Ion Platform in December of 2008. At CES in early 2009, there were no machines to be seen running the Ion platform. One source claimed that Ion was too expensive to be a viable option for netbook computers. NVIDIA apparently feels that the reason the platform isn’t seeing widespread adoption in the market is the price that Intel is charging it for the Atom CPUs.

The NVIDIA Ion platform pairs an Intel Atom CPU with a NVIDIA 9400 GPU. The platform is an alternative chipset platform for low-cost netbook and nettop computers that are doing well in the market. Reuters reports that NVIDIA CEO Jen-Hsun Huang calls Intel's chip pricing unfair.

Despite the feeling by Huang that the pricing is unfair, he says that NVIDIA will not pursue antitrust action at this time. Huang says that Intel sells the Atom chip alone for $45 but within a three-chip set (Atom processor, northbridge, southbridge) sells for only $25.

Huang told Reuters, "That seems pretty unfair. We ought to be able to compete and serve that market."

Intel's main CPU rival, AMD, made similar allegation concerning Intel using pricing and incentives to keep AMD from competing in the CPU market in Europe. AMD's claims led to Intel being fined a record $1.45 billion by the European Commission last week.

Intel spokesman Bill Calder said, "We compete fairly. We do not force bundles on any computer makers and customers can purchase Atom individually or as part of the bundle. If you want to purchase the chip set, obviously there is better pricing."

Huang said, "I hope it doesn't come down to that (antitrust action). We have to do whatever we have to do when the time comes. We really hope this company (Intel) will compete on a fair basis."

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