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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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By Operandi on 5/19/2009 12:59:52 PM , Rating: 5
Intel playing dirty? Big surprise there....

Maybe nVidia could team up with VIA for their Nano.

RE: Nano
By Golgatha on 5/19/2009 1:05:20 PM , Rating: 2
I say just buy up all the three chip combos, keep the Atoms, and then create a virtual monopoly on chipsets to pair them with. Oh how convenient, the only other chipset is made by nVidia.

RE: Nano
By JasonMick on 5/19/2009 1:37:53 PM , Rating: 4
Its not that simple -- the Atom is a Micro-FCBGA. If you don't buy it separately and mount it yourself, it comes pre-soldered to the board.

I'm not saying your can't take it out, just saying that it would be expensive and intensive to perform such mass desoldering.

I'd agree with original op -- NVIDIA should consider partnering with VIA for a mobile chip solution. Intel may be on top now, but with its anticonsumer, anticompetive stances it can only stay on top so long before its brought down by bad press and anti-trust settlements.

Its a shame too that it resorts to such tactics -- it makes great desktop CPUs (and the Atom is relatively well engineered as well). However, a competitive market will ultimately produce better products than a hindered one, even if the constrained one temporarily has some strong products, as is the case now.

RE: Nano
By MadMan007 on 5/19/2009 1:47:40 PM , Rating: 4
I'm not sure I quite understand how that works. If the bundle comes presoldered to the board that means there are only a few reference board options for Atom? So Intel acts as a go-between for the actual board assembler and the vendor who buys the assembled board? If you know more details like that please explain.

RE: Nano
By HammerZ on 5/21/2009 3:23:03 AM , Rating: 2
He is simply wrong and is confused from the perspective of how the product is purchased by a consumer (which is what he described) vs. suppliers or Contract Manufacturers. Intel cannot be building every single MB for all the Atom Netbooks and desktop boards. It makes no sense to have the three chips pre-soldered to boards from Intel.

RE: Nano
By Fox5 on 5/19/2009 2:26:39 PM , Rating: 2
Well, VIA has their own chipsets as well. Nvidia's may be superior, but VIA may be engaging in the same practices as Intel.

RE: Nano
By mindless1 on 5/19/2009 6:14:13 PM , Rating: 2
They're not in the position to engage in the same practices, nobody wants Via chipsets unless they're dirt cheap.

RE: Nano
By Yawgm0th on 5/19/2009 2:34:12 PM , Rating: 2
I'd agree with original op -- NVIDIA should consider partnering with VIA for a mobile chip solution. Intel may be on top now, but with its anticonsumer, anticompetive stances it can only stay on top so long before its brought down by bad press and anti-trust settlements.
It's been decades of this behavior. Why is this different?

Anyway, VIA hasn't made compelling products for a long time now. Their mini-itx and pico-itx stuff was and still is good, but Nano with or with Ion blows it away in virtually every aspect. Don't get me wrong -- I'm rooting for VIA simply because Intel, AMD, and Nvidia need the competition for processors and chipsets, but I don't have high expectations. Via just doesn't have the processors to do what can be done with an Atom.

Its a shame too that it resorts to such tactics -- it makes great desktop CPUs (and the Atom is relatively well engineered as well). However, a competitive market will ultimately produce better products than a hindered one, even if the constrained one temporarily has some strong products, as is the case now.
No disagreement here -- if Intel weren't abusing its position as market leader, the market would do a lot better overall.

RE: Nano
By Alexvrb on 5/20/2009 4:04:20 PM , Rating: 2
Their mini-itx and pico-itx stuff was and still is good, but Nano with or with Ion blows it away in virtually every aspect.
I think you mean "Atom with or without Ion blows it (Nano) away", in which case I mostly agree. At least in the very low power mobile department. For low power desktops the difference in power consumption is less significant, and Nano performs pretty well. I'll have to see how the dual core Nanos fair.

RE: Nano
By mindless1 on 5/19/2009 6:13:27 PM , Rating: 2
It is that simple, they are talking about pricing for manufacturers, not end-users (even though the latter is directly effected by the former), so no it doesn't come pre-soldered it comes in trays shipped to the manufacturer whether it be just the Atom or trays for the chipset too.

The key thing to remember here is who made the claim, nVidia doesn't sell much to end-users.

nVidia should not pair with Via, all of Via's designs are excessively budgetized junk. I hope Via will surprise us all with a good next-gen product but if not they are sinking fast, the only thing that makes their C7 look good is that Intel resists releasing better Atom derivatives so they won't displace even more of their low end desktop and mobile chips.

If Intel won't play ball, I tend to agree it is anti-competitive but in the worst case nVidia should just concede they need to accelerate development of an x86 CPU that meets their requirements. Licensing is then a problem, if Intel pulls the license card then considering that AND the bundled pricing disadvantage Intel offers, in conjunction with the EU rulings against Intel recently, nVidia could have a fair case against them in Europe at least.

Pressure from Europe could effect US buyers positively. That seems to be the key here, while Intel should be able to chose bundled prices it is only within the context of fair competition.

RE: Nano
By MadMan007 on 5/19/2009 6:24:13 PM , Rating: 2
VIA Nano is a decent CPU for Nettops.

RE: Nano
By HammerZ on 5/21/2009 3:15:21 AM , Rating: 2
I think you might be mistaken and missed his point. From a consumer perspective, the Atom is sodlered to the board. However, from a CM/supplier perspective, their purchase of the 3 chip solution does ntocome mounted onto the boards. It does nto make any sense unless Intel is willing to sell fully assembled boards. Otherwise, you cannot mount the other components w/o damaging the mounted BGA balls.

Intel is not in the business of building boards for cheap OEM vendors; it is the other way around as Intel contracts these OEM CM's (even those w/ retail products) to build boards for them. In this case, Nvidia (or any CM) would just buy the entire 3 chip solution for $25 and just junk or resell the unused parts. The only uncertain aspect here is if Intel is forcing contractual obligations to the suppliers who buy the $25 solution that would force them to mount all three parts to a board; otherwise, they have to pay $45 for the lone Atom processor.

RE: Nano
By Hlafordlaes on 5/19/2009 1:30:39 PM , Rating: 2
That's what NVidia hinted at over a year or so ago, then they went with the Atom. The only sense I can make of this shot-in-the-foot move is that Huang must truly have a strong personal dislike for VIA's chairman, or vice-versa, or both. There were some videos back then showing the Nano running Crysis on a Nano-powered mini-itx 2.0 board and I believe an 8600 card, albeit with low quality. NVidia announced a chipset for the Nano back then that is still MIA. The Nano could indeed have served as the CPU for an ION-like product. Your bad, Huang!

RE: Nano
By bjacobson on 5/19/2009 1:48:30 PM , Rating: 5
VIA has terrible hardware support and documentation. Intel, on the other hand, always has an engineer on hand for us to talk to when we run into problem. Otherwise we'd go with VIA.

It's rough building a platform when you're left wandering around in the dark for information on how to access the hardware.

RE: Nano
By bongsi21 on 5/20/2009 12:36:11 PM , Rating: 2
if you look at it the problem is not INTEL its NVIDIA. In the 1st place INTEL ATOM was the first leader to create the small processor for mobile devices. NVIDIA is whining about the steep price because INTEL is a mammoth company so they have the capacity to produce more in a cheaper price while NVIDIA is not a processor company but is in fact a graphics company which makes them harder to manufacture processors . And let's face it NVIDIA always price their products too high like for say NVIDIA VS.ATI Graphics

RE: Nano
By nct on 5/20/2009 2:00:23 PM , Rating: 2
How is bundle pricing playing dirty? Is Pizza Hut playing dirty when they sell me a pizza, breadsticks, and a coke for less than the price of the individual items? Should Domino's be able to sue them for such pricing? This allegation is ridiculous. If nVidia doesn't like Intel's price, they should find an alternate vendor that charges less, or *GASP* pass on the price to the consumer and justify why it's worth paying a premium for an nVidia chipset.

misleading line
By Andypro on 5/19/2009 1:12:31 PM , Rating: 5
Huang says that Intel sells the Atom chip alone for $45 but a three-chip set (Atom processor, northbridge, southbridge) sells for only $25.

That should read within a three-chip set. Intel most certainly does not sell all three chips for $25.

RE: misleading line
By Brandon Hill on 5/19/2009 1:19:29 PM , Rating: 3
Thanks for pointing that out. It has been corrected!

RE: misleading line
By fic2 on 5/19/2009 2:52:22 PM , Rating: 3
So, how much is the 3-chip bundle? $46? $50? $75? Might help in evaluating the "$25" bundled Atom price.

RE: misleading line
By mindless1 on 5/19/2009 6:31:38 PM , Rating: 1
I don't have a price but I will suggest that Newegg, making a profit selling it, sells an entire Intel motherboard with Atom 230 for $65.

It has to cost over $10 to design, manufacture, addt'l component cost, deliver, etc, that motherboard. That puts a very conservative upper end price for the chipset at $65 - $45 - $10 = $10. Considering it costs more to make a motherboard than Atom, a $10:45 ratio is ridiculous.

I'd guess Intel is actually giving away the chipset for free or a trivial add'tl cost like a couple dollars, but doing it with volume agreements that drop per unit price since there isn't volume sales of Atom alone due to it's high price alone.

RE: misleading line
By djc208 on 5/20/2009 7:19:02 AM , Rating: 2
Also remember the Intel chipset is very old in both design and manufacturing process. So it probalby does only cost them a few dollars to produce considering it's probably one of the only things they still do on the 130nm process.

RE: misleading line
By MadMan007 on 5/19/2009 1:20:10 PM , Rating: 3
Yeah I don't get that. If that was the case vendors would just buy the full Intel set no matter what and throw away the NB+SB if they want to use ION. If they buy all three there's nothing forcing them to use all three.

RE: misleading line
By mindless1 on 5/19/2009 6:34:24 PM , Rating: 2
Atom = $45
Atom w/chipset = $25 + cost of chipset, the total must be a number barely any higher than, but at least as high per unit volume as $45. I suppose it wouldn't HAVE to be higher but even Intel doesn't have the cojones to price the entire 3 piece set for less than the CPU alone.

RE: misleading line
By spamcannon on 5/19/2009 7:41:24 PM , Rating: 5
Bottom line: Intel is capable of profitably selling Atom bundles at a price that NVIDIA can't match. So NVIDIA is jumping on the bandwagon by crying, "unfair!"

What's unfair about making a profit?

...on second thought, maybe I should open up a hamburger stand and complain that McDonalds unfairly charges low prices. I might be able to get some money out of them!

RE: misleading line
By MadMan007 on 5/19/2009 11:13:12 PM , Rating: 2
Just be sure to locate your shop in the EU to set legal precedence.

Bundle pricing
By Dwezil on 5/19/2009 1:07:02 PM , Rating: 3
Umm, bundle pricing means that if you buy the entire bundle, you get it cheaper than if you bought all of the components individually - not cheaper than the main component costs by itself. This is clearly aimed at making competition impossible.

RE: Bundle pricing
By chrnochime on 5/19/2009 1:20:28 PM , Rating: 1
Thanks for stating the obvious.

Nvidia is just whining because they don't get to make money off Intel. Intel does not need Nvidia's "help" in making chipsets for its CPUs, needless to say. They ought to stick with what they do best: make power hungry GPUs and run after console manu. to earn money LOL

RE: Bundle pricing
By mindless1 on 5/19/2009 6:19:10 PM , Rating: 2
The obvious needed to be stated, as the prior post didn't consider it. Thanks for not reading enough to be commenting on topic to the post you replied to.

Intel clearly needs nVidia to open the market up for consumer benefit, it was ridiculous that we had 945 chipset paired with Atom.

Let me tell you about nVidia GPUs. They use less power for the HD decoding than the Intel 945 and the mobile processor you'd need since 945 is weak old hot tech.

Intel should stick with what they do well, making processors and chipsets, but not being allowed to control the market. If they weren't being anti-competitive they would have been forced to replace 945 chipset sooner, and would sell Atom individually at a similar profit margin to Atom bundled with the chipset.

RE: Bundle pricing
By MadMan007 on 5/19/2009 6:23:10 PM , Rating: 2
You're talking about the end-user 'needing' NV not Intel. As far as Intel is concerned Atom can stay with a has-been chipset because otherwise it might hurt sales of their higher-priced chips.

RE: Bundle pricing
By TomZ on 5/19/2009 3:32:42 PM , Rating: 1
This is clearly aimed at making competition impossible.
And you are clearly biased. In nearly all areas of commerce, you pay less when you buy more. It's more than a stretch to say that Intel is doing something unfair.

What nVIDIA should do - instead of whining - is develop an equivalent chip and then compete with Atom, if they feel that Intel is charging too little for the Atom.

RE: Bundle pricing
By 91TTZ on 5/19/2009 3:57:21 PM , Rating: 2
What nVIDIA should do - instead of whining - is develop an equivalent chip and then compete with Atom, if they feel that Intel is charging too little for the Atom.

NVidia doesn't make x86 CPU's, and if they tried Intel would most likely sue them.

RE: Bundle pricing
By TomZ on 5/19/09, Rating: 0
RE: Bundle pricing
By mindless1 on 5/19/2009 6:24:12 PM , Rating: 4
A licensing agreement requires both parties to agree, with Intel already displaying all the signs they won't agree to anything that doesn't preserve their anti-competitive market position. Therefore, an agreement with terms Intel would agree to would have equivalent anti-competitive terms.

RE: Bundle pricing
By Regected on 5/20/2009 10:09:24 AM , Rating: 2
Intel owns the patents on the x86 architecture, and only licensed it out to AMD, Via and Cyrix when IBM wanted more suppliers. Infact, AMD made Intel chips up until the 386 with both AMD and Intel logos on them. Nvidia has an agreement with Intel to manufacture chipsets for Intel's product line and Intel can use Nvidia's memory control architecture per the same agreement.

Until a time that the x86 architecture becomes public domain, Intel will hold an unfair advantage over the rest of the CPU market, and competition will be light. Getting new companies into the PC CPU market is imposable. Switching CPU architecture to a different architecture can't happen since new software would have to be developed to work with the new hardware. It's a catch 22 unless Nvidia gets M$ onboard to make an OS compatible with windows and use a new CPU command set.

The best thing consumers can hope for is an open source CPU and open source OS.

RE: Bundle pricing
By mindless1 on 5/19/2009 6:22:20 PM , Rating: 2
It's not biased to see the state of the market and want a more open one. In nearly all areas of commerce you don't pay a 25:45 ratio when buying only 3 inexpensive items, when the two addt'l items cost less than the one under consideration.

It is very clear that Intel is pricing their chipset combos to prevent fair competition. Whether you or I feel that should be illegal or not is an entirely different matter.

By Chiisuchianu on 5/19/2009 3:32:58 PM , Rating: 3
Instead of crying they should do what ATi did to get back at nVidia, which would benefit all of us: make a damn better product!

RE: sheesh
By mindless1 on 5/19/2009 6:35:10 PM , Rating: 3
Umm, that is what they did. Ion = better

RE: sheesh
By Chocobollz on 5/21/2009 2:40:47 AM , Rating: 2
Better doesn't always means the best. If you make better products but badmouthing your competitor then guess what you get: a can of whoop-ass! It's their karma really.

interesting scenario...
By andylawcc on 5/19/2009 1:03:57 PM , Rating: 3
so, Intel pissed off Nvidia, and AMD might offer an Atom like CPU that nvidia wants, and they will be buddy buddy again. but when the Ion platform sells well, AMD will sue because it doesn't feature their ATI chip. love triangle indeed

RE: interesting scenario...
By MonkeyPaw on 5/19/2009 6:17:54 PM , Rating: 2
The problem is AMD has no Atom equivalent in its plans. It just goes to show how valuable competition is, as we have complaints about budget CPU pricing!

By Barfo on 5/19/2009 1:10:00 PM , Rating: 5
Looks like Intel opened a can of whoop-ass on Nvidia.

nvidia has silicon in their vag
By MadMan007 on 5/19/2009 1:18:18 PM , Rating: 4
Coming from NV, the chipset feature lockout masters with SLI, I call this turnabout is fair play.

No such thing as a "fair" price
By androticus on 5/20/2009 12:36:19 AM , Rating: 2
The ONLY price that is "fair" is a price to which the buyer and seller of a commodity agree. If a third party doesn't like it, tough. Why in the world should Intel be required to sacrifice its own interests?

This whole absurd and immoral system of anti-trust exists only because businessmen are too cowardly and too liberally brainwashed to stand up for their own rights. Intel executives could run an antitrust department, but antitrust department officials can't make microchips -- corporations need to discover they have all the power they need to get their rights respected, they just need to stop acting like doormats and start standing up for themselves and demanding their rights be respected.

RE: No such thing as a "fair" price
By Jacerie on 5/20/2009 8:29:24 AM , Rating: 2
I'd also like to point out something that I feel everyone conveniently ignores when flaming Intel. The entire x86 architecture is Intel's IP. Everyone else just licenses the technology and makes their own changes or supporting products. With that in mind, Intel can do as they damn well please. Their tech, their decision.
If you really want competition is the chipset market, there really needs to be more than one type of architecture. The simple fact that the x86 architecture is top dog should in no way make Intel liable for the failing of it's licensees.
We used to have a number of viable processor architectures to choose from, but they've all failed the market in some way or another making Intel the de facto standard.

Nvidia, Intel, and AMD oh my!
By tviceman on 5/19/2009 1:09:49 PM , Rating: 2
There is a seriously complex relationship between these three companies! All three compete heavily with each other, yet all three need each other to perform well, in some aspect or another, in certain markets.

By Roy2001 on 5/20/2009 7:33:08 PM , Rating: 2
SOC means one day the computer system will be on a chip except IOs. Will DRAM company, network company, peripheral companies sue Intel?

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