The nicest thing Intel could do for AMD

AS WE RECENTLY REPORTED here, Intel has decided to refuse to licence its new Centrino technology, allowing the brand name only to be used for an Intel processor combined with an Intel chipset. This type of move is obviously aimed at preventing 3rd party manufacturers from capitalizing on Intel's own marketing efforts or being able to use the Centrino brand-name. While it may be a great way to boost short-term profits, it's a downright stupid way to deal with long-term competition.

Then again, Intel's habit of competing with itself has always defied logic. On the one hand, the company happily sells processors to third party manufacturers, but on the other it does everything it can to keep these companies from effectively selling CPUs. Every CPU, after all, has to have a chipset, and Intel wants all the CPU's and all the chipsets to be its own. Obviously the smart thing to do here is cut out the third party vendors, licence them to death, and deny them access to as much Intel technology as possible, right?

Maybe in the short term, yes, but the last twenty years are full of examples where one company's attempts to seize control of a market by license or fiat ultimately fails. Apple lost its significant share of the computer industry when it failed to allow 3rd party vendors to sell its equipment. IBM ultimately lost control of the PC that it invented as part of its multi-billion-dollar empire before Compaq and Dell even incorporated. 3dfx's decision to cut their third party vendors out of the picture ultimately led to that company's ultimate decline, and Rambus' attempts to force the industry to license their own technology have thus far ended in failure and disgrace for the once high-flying IP company. Now, if Rambus stock jumps to $12, it's big news. That's better than $4—but it's a far cry from the $500 or so the stock once held. Although the Rambus situation continues to bounce back and forth through the US court system (while the legal beagles clean up), the overall trend is clear—the IT industry tends not to favor tight licencing restrictions, heavy patent fees, or companies that seek to dominant a market through proprietary technology.

Intel's decision to sue VIA over the latter's decision to build a P4 chipset without a license began a trend of increased hostility from Santa Clara towards its 3rd party vendors. When the 533 MHz P4 showed up, Intel promptly required licences for this technology as well—ironic, considering the bus was nothing more than a MHz jump. When hyper-threading technology debuted, guess what? Third party vendors had to buy another licence. Now Intel's mulling over not allowing 800 MHz FSB licences at all—and Centrino? Well, you third party vendors are just S.O.L.

The problem with that kind of approach is that it's only effective if we assume the third party vendors are nothing but weak-willed, helpless little companies. They are not. If Intel continues its lawsuit-happy, heavily restricted model of work, it could end up driving its competitors right into the arms of AMD, who'd be more than happy to have them. Although the Athlon had a delayed introduction to notebooks due to its high thermal output, Athlon 64 is set to make an appearance in a mobile form almost immediately after launching. Athlon 64 should have a very good thermal profile thanks largely to its SOI technology, which could cut the thermal leakage of the CPU by up to 35%. VIA is likely working on a Centrino-like product of its own with integrated wireless technology—but if Intel won't play ball, the company will surely find a partner who will.

Intel's decision to attack its 3rd party vendors is ultimately self-defeating. Oftentimes these vendors manufacturer products at lower price points that help extend Intel's CPU share into lower-cost markets. Research has shown that 3rd party chipset support does, in fact, help a company gain market share. It's an open question, Intel—just how much support are you willing to give to AMD?