Bad week for Intel, slapped with $1.45 billion fine, loses market share to AMD

It’s been a tough day or two for Intel. Yesterday Intel CEO Paul Otellini told investors that the market outlook was better than expected, and that Intel predicted growth in the all-in-one PC space that, along with Intel Atom powered nettops would help the desktop PC market grow a bit. But at the same time, IDC was reporting that Intel Atom shipments fell 33 percent during the quarter. And that helped rival AMD pick up more than 4 percent of the market share previously held by Intel.

Right now, the PC processor race is sort of a two company game, with occasional entries from smaller companies like VIA. It should be interesting to watch this rivalry more closely later this year as a sea of netbooks powered by ARM processors are expected to hit the market. I don’t expect them to make a huge dent, but netbooks do represent the fastest growing segment of the PC industry, so if ARM can take a significant portion of the netbook chip market away from Intel, these processors could make a little dent.

Oh, and to top things off, the European Commission issued a $1.45 billion fine against Intel today for antitrust violations. Intel allegedly paid PC makers to “postpone, cancel, or avoid” AMD products. An appeal is likely.

Update: CNet did some math and determined that Intel would have to sell over 27 million Atom CPUs to make up for this $1.45 billion fine.

Posted on Wednesday, May 13th, 2009, 8:05 am by Brad Linder

http://www.tech-no-media.com erlik

To add to Intel trouble it seems to someone is starting to make an X86 compatible netbook based on a System on a chip from yet another company: http://www.tech-no-media.com/2009/05/norhtec-ed…

That's one more competitor Intel has to care about in the Netbook market. As if the ARM based processors were not enough of a worry…
DougC3

I was about to post about this in the forums.

http://blogs.zdnet.com/BTL/?p=17884&tag=nl.e589

“The previous record fine for similar abuses in the EU was €497 million, or about $677 million, levied at — you guessed it — Microsoft in March 2004 for blocking competition in markets for server computers and media software.”

What does EU do with this money if they're able to collect?
http://deliriotecnologico.blogspot.com Roberto Innocenti

I already know the Intel way to do business, this is why I don't buy Intel.
zima

Collection is not a problem – after all, if Intel wants to continue making business in the EU (THE biggest single market, in regards to capitalisation/etc., in the world; and one which seems to consistantly tolerate prices higher than in the US (no, VAT/etc. doesn't explain them)), it has to pay. And…it needs to do it IMMEDIATELLY (the money will sit in a bank account until the appeals end)

As to where the money goes afterwards…EU budget of course. Intel has harmed the market and the market gets even (also, EU is relativelly good in sensibly using its money). And before somebody suggests that's a way for EU to get out of recession – this amount is pocket change for EU budget (and most of its countries); besides, EU usually fines…european companies (surprise!) – you just don't hear about it.

Somebody else might ask “so how does that help AMD?!”. Well, the role of govs isn't to favour one company over the other, it is to maintain even playing field (plus – don't forget about Via, ARM, Transmeta, and so on…should they get the cut too?). And Intel now will be under watchfull eye of the commision for several years. If they don't behave….BAM! Another fine. If that doesn't help…another one! This means that such practices ceased to be sustainable for Intel, and it needs to play fair.

So it also needs to maintain healthy, sustainable prices; unable to wage price war to the bottom using such dirty tricks and its vast reserves. Which means AMD benefits (and yes, somewhat higher, healthy prices are better than too low ones – what do you think Intel would do if AMD became irrelevant? What would stop them from going back to pricing practices from the 90's?)
DougC3

I never doubted that EU would collect if they should win the appeal. I can't think of any stronger authority than the ability keep Intel products out of Europe. I just figured Intel would tie up the appeal for years. I agree that Intel deserves the fine.
zima

Yeah, the appeal will likely last for years. Doesn't change the thing it hits Intel financially right away.
zima

Yeah, the appeal will likely last for years. Doesn't change the thing it hits Intel financially right away.

Bad week for Intel, slapped with $1.45 billion fine, loses market share to AMD

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