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Skype's decision to release Intel-only features on its newest software refresh may have been a poor idea

Last month we wrote a small piece about the upcoming Skype 2.0 features that are only enabled for Intel processors.  AMD is hoping to add another spear to its ranks by demanding Skype documents that prove or disprove Intel provided incentives to Skype for this favor.  Intel denies the allegations. 

A Skype executive declined to comment earlier this month when asked whether the company had tested the performance of its software on both Intel's and AMD's dual-core chips. An Intel representative confirmed that there are no instructions that specifically enhance the performance of voice over Internet Protocol (VoIP) software like Skype's in Intel's dual-core chips.

This is not the first time this year for an AMD-Intel legal battle.  AMD has been building anti-trust cases against Intel in Japan, the US and Korea for over a year, claiming that Intel leverages its buyers and distributors to not carry AMD products.  Of course, AMD's 21.4% marketshare is looking pretty good to the company right now, monopoly or not. 


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RE: gg
By Bull Dog on 3/1/2006 5:44:04 AM , Rating: 3
quote:
does this mean ati and nvidia can bully game developers/publisher to do the same thing. kinda getting annoy with only nvidia or ati "optimization" that both brand of hardware can easily supports.

This a completely different matter becuase neither company has a monopoly over the other.

quote:
I can see amd intentions, but I always thought it was up to the software developer decision to do what they like with their own software, I mean isnt it "their rights" to do so? even though it can be pretty lame.


If Intel pays Skype $$$ to make it so that the software only has added functionality on Intel hardware with Intel claiming that only their CD Proc's are powerful enough, I can provide a whole barge load of benchs to disprove that.

This leaves us one other reason; the monopoly known as Intel flexes its muscles to bully AMD just becuase it can. Thats what AMD is sueing Intel over; monopolstic behavior.

If two company's are roughly even with each other then dirtier tactics are "allowed" basically because both companies do the same thing with roughly the same effectiveness. Competition is encouraged.

However, if one company has definite monopoly in a certain field, it isn't allowed to use dirty tricks to keep its self that way.

Have I made my point?


RE: gg
By kelmon on 3/1/2006 7:11:12 AM , Rating: 2
Silly question, but if AMD has a 21% share of the processor market, can we strictly call Intel a monopoly any more? Looks like we are galloping towards a duopoly more than anything else at the moment...


RE: gg
By hans007 on 3/1/2006 7:38:03 AM , Rating: 3
seeing as intel doesn't actualy have a monopoly they probably should be able to partner with whoever they want.

i mean, so what if it is locked for intel. intel is spending their money on providing additional features for its customers.

if amd spends more money say adding 2mb of L2 cache to every chip they make, is that not also an additional feature? whether intel does it by adding a feature through a software partnership or through more hardware what is the difference?



RE: gg
By Burning Bridges on 3/1/2006 8:43:09 AM , Rating: 2
No.

Intel is NOT spending money on the consumer.

It is not paying for added features, instead it is paying for certain features to be DISABLED for AMD hardware.

Basically Intel is spending it's money trying to beat AMD, and because they can't seem to do it with faster CPUs they are paying programmers to cripple their software if it runs on an AMD CPU.

/rant.


RE: gg
By JackPack on 3/1/2006 1:52:52 PM , Rating: 2
quote:
paying for certain features to be DISABLED for AMD hardware


Let's get the facts straight here.

Intel never paid Skype - all they offered was engineering support to enhance the software for multithreading. In turn, they get exclusivity for a period. This is not much different from a patent. That's why it's not illegal.


RE: gg
By timmiser on 3/1/2006 8:11:29 PM , Rating: 2
quote:
That's why it's not illegal.


Apparently it is illegal or else AMD wouldn't be going thought the trouble of a lawsuit. It will be up to the courts to decide that.


RE: gg
By Lifted on 3/1/2006 8:44:03 PM , Rating: 2
AMD isn't suing Intel over this, they are simply adding more proof that they use their muscle whenever they feel they can to hurt AMD. As was said before, that is fine as long as you are not a monolpy. If you are a monopoly, you are not allowed to use your size to restrict competition, which is what this is probably doing. This is in and of itself is nothing, but in the grand scheme of things it points to a monopoly restricting competition.


RE: gg
By JackPack on 3/1/2006 9:58:10 PM , Rating: 2
quote:
Apparently it is illegal or else AMD wouldn't be going thought the trouble of a lawsuit.


Plenty of firms bring up a suit even though they are perfectly aware that there is no chance of winning. They do it either to simply make a statement or to tie up the little guy. That's what corporate lawyers do. Remember the RIAA suing the grandma?

I don't see AMD having a case. Intel did not pay Skype to make it Pentium exclusive. They simply helped designed the code for Skype. It's Intel's work. Why should AMD benefit from it?


RE: gg
By Lifted on 3/1/2006 11:58:03 PM , Rating: 2
AMD is just gathering information for their existing lawsuit. Who said anything about suing over this?


RE: gg
By Viditor on 3/1/2006 10:06:01 AM , Rating: 2
quote:
seeing as intel doesn't actualy have a monopoly

Actually they do...
It's a common misconception that "monopoly" (at least as it applies to anti-trust laws) means owning 100% of the market...it doesn't. In fact, the US government says that any company which has greater than 50% marketshare might be a monopoly, it all depends on the company's ability to construct "barriers to entry" by using their market position.


RE: gg
By JackPack on 3/1/2006 1:48:06 PM , Rating: 2
Legally, they've never been shown to be a monopolist.


RE: gg
By Questar on 3/1/2006 4:32:12 PM , Rating: 2
Wrong again dude.

Creating barriers to entry has nothing do to with being a monopoly. In that case I should sue both AMD and Intel becuase they have made the barriers for me to enter the x86 cpu market too high.

Monopolies are perfectly legal in the U.S. Using monopoly power to prevent another company from entering a market is illegal in the U.S.


RE: gg
By Lifted on 3/1/2006 8:47:08 PM , Rating: 2
Dude, he said

"barriers to entry" by using their market position .

Not "barriers to entry" becuase it's too expensive for you to build a fab.


RE: gg
By Viditor on 3/2/2006 1:50:11 AM , Rating: 2
quote:
Creating barriers to entry has nothing do to with being a monopoly. In that case I should sue both AMD and Intel becuase they have made the barriers for me to enter the x86 cpu market too high

As Lifted points out, you are getting confused on terms...
The barrier of cost on a Fab is called (in legal terms) a "Natural Barrier to Entry", and it's not illegal as it's caused by the nature of the market and not a creation of the monopolist. Being a monopoly in and of itself is not illegal, but the rules of business practise are certainly different. For example, if AMD and Intel had equal marketshare, then none of AMD's accusations would be actionable. What's illegal is using your market dominance to keep smaller companies from competing equally.
quote:
Intel never paid Skype - all they offered was engineering support to enhance the software for multithreading. In turn, they get exclusivity for a period. This is not much different from a patent. That's why it's not illegal

There are several things wrong with this statement...
1. As anyone who has used a barter system can tell you, cash is not the only form payment there is. The value of engineering optimisations, writing code, testing the new chip design, etc... probably runs into the 10's of Million$.
2. Keep in mind that Skype is unchallenged in it's field. Unlike Vonage and the others, Skype is available internationally and their marketshare is many times larger than their nearest competitor. As it was Intel who initiated the deal (according to Intel's own spokesman), by paying Skype with Millions of $ in services to keep AMD out, they have broken the law rather transparently...frankly it was the stupidest move I have seen Intel make since the MTH disaster.
3. This is absolutely nothing like a patent...a patent is the creation of an idea or concept which may be licensed by anyone who pays. This is the purposeful restriction of a competitors product.
quote:
Legally, they've never been shown to be a monopolist

True...but of course the only reason for this is that the suit isn't in court yet. However, by any legal definition they certainly are. Intel's defense appears to be that the x86 CPU isn't a market, and that the court must judge any monopoly based on all semiconductors (memory, graphics, etc...). Because of the Microsoft precedents, this is almost certainly guaranteed to fail (during the MS trial, the court determined that x86 WAS a seperate market).
quote:
Intel can get away with saying that Skye is optimized to run on intel processors, it can't pay Skye to make them not run on AMD processors

Intel is the one who created those optimisations for Skype...that is both the payment and the illegal act...


monopoly, duopoly or competition?
By tygrus on 3/1/2006 7:33:03 PM , Rating: 3
It's a fine line.
* If Intel paid $$$ of incentive to exclude AMD then that would be monopolistic.
* If Nvidia paid to have a game only run on Nvidia then that would be monopolistic.
* If Intel provided their own engineers/code under a contract/license then it would be OK for Intel to say that their work (IP) can only be used with Intel CPU.
* If Intel prevents a feature (minus Intel IP) to work on AMD then that would be wrong.
* If Intel was able to stop them taking the same deal with AMD to assist then that would be wrong.
* If AMD could pay/assist Skype the same to add the feature for them using AMD IP and Skype IP (as in non-Intel IP) then they should and drop it out of the other claims.
* If the feature is 100% Skype IP then it should limit # conference call connection according to testing the users CPU/system to determine how many it can support (benchmark based, not CPUID based).

The problem is if Intel is using the profit and influence of it's past and present dominance to block/handicap competition even when the competitor may have a better product&price.

* There should be nothing stopping AMD to use Intel tactics to encourage OEM's to sell more AMD and less of Intel.
* There should be nothing stopping AMD to assist OEM's to produce better AMD systems at lower prices and more advertising (co-marketing).
* Intel has a lot more spare cash (even after ongoing Itanium losses) to heavily discount and promote products (their's and OEM's using Intel).
* AMD did manage >20% market share previously but was knocked around by it's own problems and Intel structured payments that severely punished anyone who had high sales (or from increasing sales) of AMD CPU's (even if their sales of Intel were not dropping).
* Current AMD action has scared Intel into being more cautious but the fine line is walked on by Intel. Since the AMD action, AMD sales have dramatically increased. It's also spooked some OEM's into allowing more AMD and resist Intel's propositions.
* AMD have increased ASP so it could be a fair duopoly/competion.
* It's not fair for Intel to have two varstly different effective prices for the same order mix/qty if the OEM/retailer is in the same region/market, same advertising but only difference is one os also selling AMD on the side.


RE: gg
By Samus on 3/1/2006 7:48:05 PM , Rating: 2
21% is pretty pathetic when you consider AMD's capable output (which nearly triple the demand for their chips, so they are technically running at 33% capacity across 3 fab's) and that they have made a debatably superior product to Intel's desktop/server chips for years.


RE: gg
By Lifted on 3/1/2006 8:50:36 PM , Rating: 3
AMD has one CPU fab in Dresden, one flash fab in Texas, and a second CPU fab in Dresden that is not even online yet. How again are they only running at 33% of capacity?


RE: gg
By moloko on 3/1/2006 10:45:48 AM , Rating: 2
quote:
However, if one company has definite monopoly in a certain field, it isn't allowed to use dirty tricks to keep its self that way.


That's a nice sentiment, but we've already seen that a monopolistic company in the software field can do whatever it wants, regardless of law. Even the U.S. Justice Dept. is scared of Microsoft.


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