2.19.2007

Dell and Lenovo Illegally Bribed Nonsense

You probably heard it in the news already. Dell is being sued by one of its investors for the undisclosed kickbacks it received from Intel. It says that the total amount was in excess of over a Billion dollars a year wasn't properly accounted. Lenovo on the other hand has declared it received a $22M incentive from Intel for buying 17M processors. That’s just a little over $1 per processor sold and not a hefty amount considering a CPU ASP of $140.

Desperate AMD fanatics quickly jumped on the news incessantly wailing “MONOPOLY!”, “unfair illegal business practices!” "Zionist!" (believe me some do think that).
Intel have always declared that it gives incentives or loyalty payments to its customers based on percentage of amount purchased. AMD's claims which violates the Sherman/Clayton Act are when Intel:
· Forces major customers to accept exclusive deals
· Threatens retaliation
· Forcing of AMD boycott
· Withholds rebates and marketing subsidies as a means of punishing customers who buy more than prescribed quantities of processors from AMD
In case some of you haven’t noticed, the incentives that Intel gives are legal and common business practice and it isn’t what AMD is suing Intel for.

Personally, I think AMD’s case is a bit shaky and mirrors the behavior it once had back in 1992 when they filed a suit for "breach of covenant". The arbiter cited AMD’s behavior as “vindictive” and “opportunistic” given the fact that they were quick to blame Intel when things get worse. You may want to check AMD’s financial history and see how proportional the “monopoly” whining is with company profits.

1 comment:

mickey dell said...

someone should sue AMD for causing the the increase in prices of PCs.
Before when Intel can freely give away enormous incentives, OEMs can pass down the cost savings to customers. Now with this lawsuit, Intel has toned down with incentives, OEMs are losing money and we're all left with expensive PCs. Damn you AMD -