Evangelising the Metaverse since 2001
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AMD produces Intel "monopoly survey" out of a magic hat
Dr Michael Williams of the ERS Group claimed that Chipzilla "extracted $60 billion in monopoly products over the past decade". And he reckoned that if the X86 market was "fully competitive", consumers and OEMs would save over $80 billion.
How does the ERS Group come up with these figures?
" Intel's economic return on its microprocessor business was calculated using publicly available information and standard economic methodology. The method begins with standard financial statements and derives from them the information necessary to calculate a firm's economic profits. It is based on Nobel Prize-winning research conducted by Merton Miller and Franco Modigliani and used by more than half the Fortune 1,000 firms to analyze their economic performance; Wall Street investment banks to assess potential investments; and leading management consulting firms, such as McKinsey & Co. and Stern Stewart & Co."
There's more, as we guess you suspected there would be.
Intel's Total Profits (total return 25.95%) $141.8 billion
Competitive Profits (cost of capital 9.94%) - 54.2 billion
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Result: Economic Profits (economic return 16.01%) $87.7 billion
Portion of Economic Profits Attributed to Assumed
Advantages (5.0%) - $27.3 billion
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Result: Monopoly Profits (11.01%) = $60.4 billion
The ERS group reckons that the $80 billion for the next 10 years is based on Intel's price premiums falling by 50 per cent over five years, the total industry sales would grow at only half the historical growth rates, and OEMs would pass through 75 per cent of the saving to buyers, provided AMD gainied market share from 27 per cent to 35 per cent.
It would be very nice if OEMs pass on these totally hypothetical savings to the world+dog. But as OEMs aren't charities and no doubt would love to have a monopolistic stranglehold too, we suspect this is all rather optimistic of the Good Doctor. µ
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