AMD Files Antitrust Lawsuit Against Intel

AMD Files Antitrust Lawsuit Against Intel
Tuesday June 28, 7:13 pm ET
By Matthew Fordahl, AP Technology Writer  
AMD Files Antitrust Lawsuit Against Intel, Accuses Competitor of Forcing Customers Into Deals

SAN JOSE, Calif. (AP) -- Intel Corp. pushed price cuts and rebates on computer sellers in exchange for exclusionary contracts -- and punished those that used competing microprocessors, rival Advanced Micro Devices Inc. claims in a lawsuit against the world's leading chip maker.

The industry underdog says 38 companies -- including Dell Inc., Sony Corp. and Hewlett-Packard Co. -- were strong-armed into buying Intel rather than AMD chips. The bullying also affected distributors and retailers like Office Depot and Fry's, AMD contends.

AMD's suit, filed late Monday in Delaware federal court, seeks an end to the alleged practices, which it says ultimately hurt consumers the world over.

It also seeks billions of dollars in damages in the case, which some experts say could take years to litigate and rival Microsoft Corp.'s landmark antitrust battle in complexity.

"We have a responsibility to stand up to the industry's Goliath," said Tom McCoy, AMD's chief administrative officer. "We have a responsibility to the entire industry to win and we will win because we stand on the truth of how this industry suffers under the yoke of monopoly."

Intel strongly denied AMD's allegations and will "respond appropriately," said spokesman Tom Beermann. The Intel microprocessors that run Windows operating systems account for about 80 percent of the worldwide market by unit volume and 90 percent by revenue.

"Intel believes in competing fairly and believes consumers are benefiting from this vigorous competition," said Beermann. "AMD has chosen, once again, to complain to a court about Intel's success, with a legal case full of excuses and speculation."

Shares of Intel closed at $26.33, up 47 cents, or 1.8 percent, in Tuesday trading on the Nasdaq Stock Market, while shares of AMD rose $1.05 cents, or more than 6 percent, to $17.70 on the New York Stock Exchange.

The 48-page suit repeats claims that go back more than a decade but also offers spicy new details.

In one section, Intel is compared to a cocaine dealer, hooking Toshiba Corp. on its financial inducements of $25 million to $30 million a quarter. Elsewhere, an unnamed Gateway official is quoted as saying threats from Intel beat the company into "guacamole."

Former Compaq Computer Corp. CEO Michael Capellas is quoted as saying he had a gun to his head when he stopped buying AMD chips because Intel threatened to hold back needed parts for servers.

Among other claims, AMD said Intel "has done its utmost" to interfere with two recent AMD product launches by threatening partner companies such as Taiwan's Acer, Lenovo, NEC and HP.

In the Acer case, AMD claims, then-Intel CEO Craig Barrett visited the computer maker's chairman and said Acer would suffer "severe consequences" if it participated in the launch of the Athlon 64 chip.

At the same time, as much as $20 million in "market development funds" -- incentive payments -- from Intel were delayed.

"Acer's president subsequently reported that the only thing different about Intel's threats was the messenger -- they were `usually done by lower ranking managers,' not Intel's CEO," according to the lawsuit.

AMD's timing in filing the lawsuit coincides with some successes it is now having in gaining a technological edge over Intel after years of playing catch up. Still, sustained profitability has remained elusive, with AMD posting a $17.4 million loss in the first quarter.

"We're successful and business is strong," McCoy said. "No one can say at this time AMD is simply a whiny competitor unable to compete in the marketplace and therefore resorting to the courts."

Earlier this year, Japanese regulators found Intel to have violated antitrust rules -- a case believed to have been triggered by AMD. The company eventually agreed to halt some practices the regulators found objectionable. The European Commission also has said it is pursuing an investigation against Intel.

The U.S. Fair Trade Commission has investigated Intel's practices but said in 2000 that it was closing the case and taking no action against the world's largest chip maker.

Still, legal experts and analysts said AMD's suit faces several significant hurdles: For one, no U.S. antitrust regulators or courts have declared Intel a monopoly. AMD must thus prove the monopolist allegation even though AMD's very existence could be wielded as a counterargument.

"The more common course is for the private plaintiff to wait until the U.S. government does something -- like all the lawsuits against Microsoft after it was sued," said Rod Thompson, a partner at the law firm Farella Braun and Martel LLP.

"It will be difficult for AMD to prove it all on its own," he said.

In addition, AMD also must convince the court that Intel's practices are in fact a monopolist's exclusionary practice and not a legitimate business practice.

And AMD's customers and potential customers -- including HP, Dell and Sony -- will have to confirm the often extraordinary claims made in the lawsuit.

"Dell is awfully big to be coerced," said Roger Kay, an analyst at the research firm IDC. "It's hard for me to believe they haven't made these decisions on their own."

In an indication of AMD's tough task ahead, PC manufacturers either did not return calls or refused to comment when asked for reaction to the lawsuit.

"We wouldn't comment on a dispute between two other companies or discuss relationships we have with our suppliers," said Mike Maher, a Dell spokesman.

AMD expects voluntary compliance with requests for information, but "we expect to crack open their files through the subpoena process and we have already started that process," said Charles Diamond, a lawyer who is representing AMD.

Rick Whittington, a Caris & Co. analyst, had been expecting the lawsuit.

"The timing of this suit, in our view, is Sales and Marketing 101," he said in a research note.


Alleine kanns AMD nicht schaffen, aber HP steht angeblich schon hinter AMD. Bin mal gespannt...

gruss, kague

quelle: http://biz.yahoo.com/ap/050628/intel_antitrust_lawsuit.html?.v=18  

Free Chips For HP
"In 2002, when AMD set out to earn a place in HP's commercial desktop product roadmap, HP demanded a $25 million quarterly fund to compensate it for Intel's expected retaliation. Eager to break into the commercial market, and to earn a place in HP's successful Evo product line, AMD agreed instead to provide HP with the first million microprocessors for free in an effort to overcome Intel's financial hold over HP. On the eve of the launch, HP disclosed its plans to Intel, which told HP it considered AMD's entry into HP's commercial line a 'Richter 10 event.' It immediately pressured HP into (1) withdrawing the AMD offering from its premier Evo brand and (2) withholding the AMD-powered computer from HP's network of independent value-added resellers, HP's principal point of access to small-business users for whom the computer was designed in the first place. Intel went so far as to pressure HP's senior management to consider firing the HP executive who spearheaded the AMD commercial desktop proposal. As a result of Intel's coercion, the HP-AMD desktop offering was dead on arrival. HP ended up taking only 160,000 of the million microprocessors AMD offered for free. As of today, HP's AMD-equipped commercial desktops remain channel-restricted, and AMD's share of this business remains insignificant."


Gateway Guacamole
"From 2001 to 2004, Gateway was exclusively Intel. In 2001, former Gateway CEO Ted Waitt explained to an AMD executive that Intel offered him large sums not to deal with AMD, which he could not refuse: 'I have to find a way back to profitability. If by dropping you, I become profitable, that is what I will do.' Shortly thereafter, Gateway stopped purchasing from AMD and issued a press release announcing its Intel exclusivity. The announcements came within weeks of similar public announcements of Intel exclusivity by both IBM and Micron.

"After Gateway's 2004 merger with eMachines, AMD attempted to revive the relationship it had enjoyed with Gateway until 2001, but experienced extremely limited success. While Gateway built one AMD-powered desktop model at the request of Circuit City, AMD remains locked out entirely of Gateway's direct Internet sales, its commercial offerings and its server line. According to Gateway executives, their company has paid a high price for even its limited AMD dealings. They claim that Intel has beaten them into 'guacamole' in retaliation."


Out At Big Blue
"AMD and IBM began negotiations in August 2000 over a proposed commercial PC business partnership. After seven months and with a deal nearing completion, Intel approached IBM with an incentive-based program under which Intel would become IBM's 'preferred supplier' for processors in commercial products. 'Preferred' meaning exclusive. IBM accepted Intel's proposal and terminated discussions with AMD. In return for that exclusivity, according to IBM executive Ed Thum, Intel paid IBM 'millions of dollars in market development funds.'

"Intel has also purchased IBM exclusivity in its 'ThinkCentre' line of commercial desktops. When AMD pressed IBM to add an [AMD] Athlon 64 model to its 'ThinkCentre' road map, IBM executives explained that the move would cost them important Intel subsidies, and they declined."


nicht schlecht....

gruss kague

quelle: http://www.forbes.com/technology/2005/06/29/...ner=yahootix&referrer=  

The lawsuit also will give Silicon Valley a new parlor game:
guessing who's going to be called as a witness in the trial. One name that stands out in the complaint is Michael D. Capellas, former chief executive of Compaq, which was bought by Hewlett-Packard (nyse: HPQ - news - people ). Capellas, who is now CEO of MCI (nasdaq: MCIP - news - people ), is quoted as telling AMD executives in 2000 that, figuratively, "he had a gun to his head"--the implication was that it was held by Intel--and had to stop buying AMD chips.

....
quelle: http://www.forbes.com/technology/2005/06/29/...ner=yahootix&referrer=  

Bear Stearns reiterated a "peer perform" rating on Advanced Micro Devices (nyse: AMD - news - people ) and raised earnings estimates. "Our checks at the motherboard and notebook makers indicate that demand was stronger than expected during the second quarter. We believe AMD’s processor shipments exceeded normal seasonality and this was driven by robust demand in emerging markets, notably China." Bear Stearns now estimates a second-quarter loss of 4 cents per share, narrower than its previous estimatefor a loss of 10 cents per share. It estimates second-quarter revenue of $1.25 billion--up 2% quarter-over-quarter. "In addition, we believe AMD has benefited from Intel (nasdaq: INTC - news - people )’s notebook processor supply tightness, which began in the first quarter of 2005. We estimate that roughly $15 million of our revenue increase for the June quarter was due to incremental business gained as a result of the processor shortage at Intel." The research firm also noted that AMD's mobile processor shipments were boosted by the launch of the 64-bit microprocessor, Turion 64. The processor has been designed into notebooks from Hewlett-Packard (nyse: HPQ - news - people ), Acer and Fujitsu Siemens. "We are positive on AMD’s second-half mobile processor revenue outlook and expect sales of notebooks equipped with 64-bit microprocessors to accelerate during the holiday season," Bear Stearns said. Looking ahead to the third quarter, Bear Stearns forecasts processor shipments to increase 7% quarter-over-quarter. "Though the availability of Intel’s processors has improved, we continue to see strong demand for AMD’s products."

gruss kague

quelle: http://www.forbes.com/markets/2005/07/12/...s21.html?partner=yahootix  

heute nach Börsenschluß werden die Q2-Zahlen veröffentlicht. Ist wie Roulettspielen - die Analysten rechnen mit einem leichten Verlust von 4 cents/share. Ich rechne mit etwas mehr, aber guten Aussichten. Schätze die Aktie geht kurz in die Knie, kommt aber in den nächsten Tagen wieder.

gruss kague  

 

legt weiter zu. Tagesschluß über 20 Dollar. Da ist noch mehr drin.