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Nvidia attacks Intel over pricing advantage

Anti-trust backlash spreads like swine flu
Tuesday, 19 May 2009, 13:05

FED UP WITH AMD hogging all the limelight over Intel's European antitrust debacle, vocal Nvidia CEO, Jen-Hsun Huang has joined the fray with his own accusations against Chipzilla for anti-competitive business practices he claims freeze his firm out of the netbook chipset market.

Intel, said Huang, sells its Atom processor to OEMs for $45 a piece on its own, but when paired with an Intel chipset, the combined price magically drops to just $25, something Huang sees as a ploy to lure computer makers away from his firm's alternative Ion platform -an Atom processor paired with an Nvidia chipset. This, says the green queen, "seems pretty unfair".

Jen

"We ought to be able to compete and serve that market," Huang told Reuters in the wake of Intel's €1.06 billion slap at the hands of the European Commission, which  found Intel guilty of attempting to freeze competitor AMD out of the market through OEM rebates and incentives.

Intel immediately dismissed Huang's harangue as cobblers, with a spokesperson insisting "We compete fairly." He added Chipzilla never forced bundles on OEMs and that they were free to choose to buy Atom alone or as part of a processor/chipset bundle.

"If you want to purchase the chipset, obviously there is better pricing," he added. "Better" being a bit of an understatement at almost half price.

The INQUIRER asked an Nvidia spokesman how much an Ion chipset would set OEMs back, but he told us he wasn't sure offhand and would have to check. Either way, buying an Atom individually and adding an Ion chipset, whatever it costs, is not exactly an attractive option in the current (or any) economy. Theoretically, and again, depending on Ion's price, it would probably be more worthwhile for OEMs to buy Intel's Atom bundle, chuck the chipset in the bin and hook up an Ion to it instead.

Chipzilla has an unfair advantage, since the firm is big enough, rich enough and has an excess of Atom processors to unload at cost, thereby being able to thrash Nvidia price wise in a very price sensitive market segment.

But Huang says he won't play the antitrust law suit card at the moment. "I hope it doesn't come down to that," he said, adding, however, that Nvidia would do what it had to do "when the time comes".

Huang concluded with the hope Intel wouldn't choose to go down that path and would consider competing on "a fair basis" from now on. µ

L'Inq
Reuters

See Also

AMD versus Intel actions four plus years on

Intel guilty, fined €1.06 billion by EU

AMD squeals joyfully as EU delivers Intel guilty verdict

Intel's general counsel "mystified" and "dismayed"

Intel CEO says EU decision "wrong"

Intel, Nvidia tit for tat continues

 

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Comments
What's wrong with bundle discounts?

He's just a moron and he said that because he had to say something. He said he won't file a case against Chipzilla because he CAN'T. There's nothing wrong with bundle discounts. I wish Intel would challenge him to sue them.

posted by : ssj4Gogeta, 19 May 2009 Complain about this comment
@ssj4Gogeta

Reading comprehension FAIL.

At those prices, if they wanted to accuse Intel of dumping they would have a strong case.

Remember how, just a few short years ago, .us imposed massive tariffs because foreign DRAM manufs were "dumping" (ie, outcompeting them)?

Well that can work both ways.

posted by : Anonymous Coward, 19 May 2009 Complain about this comment
Depends

They're not illegal by default but they are when the seller makes the unbundled product ridiculously expensive in order to deter its purchase. Which is obviously happening here. Since when are bundles cheaper than the cost of one of the components?

posted by : DoJ, 19 May 2009 Complain about this comment
Nothing wrong with Bundle discounts

There is nothing wrong with Bundle discounts. It's only a problem when the discount is based on the purchase or sales of competitor's products.

As stated in the article, there is nothing that stops them from buying the bundle (assuming Intel doesn't require you buy the parts pre-integrated into a circuit board) and then throwing away the chipset to use a third party chipset instead.

posted by : mike, 19 May 2009 Complain about this comment
No BFD

This is the same thing airlines do. They offer substantially lower rates for booking a round trip than purchasing two one-way tickets for the exact same flights. Nobody has hit them with a pillow for it yet, so why not semiconductors?

posted by : Dan, 19 May 2009 Complain about this comment
@Dan

Reading comprehension EPIC FAIL.

This is *not* the same thing airlines do. Sure the airlines sell you a return ticket cheaper than two singles. But since when did they - or anyone else, for that matter - sell you a return ticket cheaper than *one* single?

Its not bundling, its *dumping*, and dumping is illegal.

posted by : Anonymous Coward, 19 May 2009 Complain about this comment
@Dan: your analogy is flawed

Dan, in your analogy on the one trip, one airliner would have a (near) monopoly, while in the other direction there would be some competition.

Further more, no one would ever need actual one way trips (cpu without chipset or vice versa), peolpe would only buy one way trips so they can book the return flight elsewhere.

In that scenario, charging huge premium's for one way trips, only to exclude competition on the return would be considered abuse of monopoly.

posted by : Duvel, 19 May 2009 Complain about this comment
Are these numbers verified?

Where do these numbers come from? $45 for chip vs $25 for chip + chipset does not make sense. As noted above one could buy the bundle and toss the chipset. There has to be more to this.

posted by : Rob, 19 May 2009 Complain about this comment
Not Dumping

Too funny. You can't win for losing.

People accuse Intel of being monopolistic and driving up prices, then complain when the prices are too low.

Dumping is selling below cost. With the newer 45nm process, and even newer 32nm process, Intel produces a lot more ICs per wafer. The Atom is very small and specifically targets the low end (cheap) market.

You can believe Intel is not selling these below cost.

posted by : hector, 19 May 2009 Complain about this comment
we the need chipset price

without knowing what the chipset costs it's pretty hard to say exactly. If it's say, $20, then yeah, cpu+chipset for the same price as just the cpu would force nvidia out. And that's probably about how it really is. Could be a good thing for consumers considering how lousy nvidia chipsets are :-), but then considering how lousy the intel chipsets are that they bundle with atoms I think we're screwed either way. What everybody really wants is a low power intel chipset (if such a thing exists) with amd or nvidia graphics.... And to keep nvidia as far away from your hard disk controller and data as possible....

posted by : Andrew, 19 May 2009 Complain about this comment
comparisons

If he complains publicly, he also should become a bit more specific.

Intel might sell the Atom in small volumes to a small company and at the same time quote a not-yet-existing Atom/chipset bundle for the year 2011 in quantities of 40 million sets for a consumer electronics project.

And, if I rememeber correctly, I have heard about those USD 25 before.

You buy more, you get a discount.

posted by : Fred_EM, 19 May 2009 Complain about this comment
Intel Will Always WIN

Intel Owns the chip world. Accept it fanboys. Intel can pay WAY more than a Billion to EU in fines. Intel can afford to "give away" combo chipset/proc and still make lots of cash. Nvidia will die due to its own greed (hope not). So they denied the right to use SLI in Intel chipset at that time. Remember? That was the reason for the 680i chipset failure.

If Intel creates (decides to crush) a new bread of processors that are as fast (of faster) as 2days i7 and as efficient as a VIA C-7 processor, AMD and the other CPU co. will be in deeper trouble. But I guess that Intel will keep them alive so that the "competition can continue". Who knows.

posted by : Gerald, 19 May 2009 Complain about this comment
Stop the presses

@Gerald

some of what you say might be true, about intel wallet being big. but believe me if intel can make a processor twice as fast and as efficient as you say, believe me they would.

Amd is coming out with bulldozer and i assure you it's going to be better than agenda.intel fanboys might under estimate Amd, but after what Amd did to them, intel surely is not going down that road again at any cost.

posted by : saneblane, 19 May 2009 Complain about this comment
Everytime Haung opens his mouth ..

you know he covering up a load of crap coming from nVidia.. What is it this time? the chips going in 285 cards blow up? or evaporate under stress?..

posted by : Raa Yee, 19 May 2009 Complain about this comment
Spare Rib Parts, R Connected to the Towbone

Originally, privileges granted to a pope's "nephew" which was a euphemism for his bastard natural son, was known as nepotism.

But before we go down the church, the widow next door been married seven times before, and every one was an 'enry. She wouldn't have a Willy or a Sam.

The beasts will tear thee piecemeal.

The truth is that all business is in league to impoverish England and utterly confuse it. Why should Ion be any different? What'd he ever do? If I passed him on the street, I'd swear, I wouldn't know him from Atom!

Or maybe I'll go the bender in all its knickerbocker glory, Heinz mean beans, and a half grilled tomato.

It all ends up in the bargain basement, eventually, eh? You bring the ducks!

posted by : J. Wellington Wimpy, 19 May 2009 Complain about this comment
Doesnt know Nvidia pricing

He knows the Intel pricing.. But doesn’t know the pricing of his own chipsets. That itself gives out the truth about unfair competition.

posted by : Booyah!, 20 May 2009 Complain about this comment
Where's the proof?

Just because Jen-Hsu says this doesn't mean it is true. I agree with several of the previous comments that he needs to cite where these numbers come from. My own simple search of the Intel site shows the N230 at $44 for the 2.5w version and $83 when couple with the 945GSE, not $25. Maybe he has some hearsay from one of his vendors of this but like the antitrust EU action this is just hearsay. How about an invoice/payment receipt? Something other than one comment in an interview.

posted by : Skeptical, 20 May 2009 Complain about this comment
Cry some more

Cry some more nvidia, you can't stick it to customers anymore so you come out and bash Intel for sticking it to you once again.

Intel should continue to stick it to nvidia just like they did with X58, weird how SLi works without nvidia worthless chipset.

Any thing that allows customers more choices on what mobo they want to buy i'm all for it, its about time someone forced nvidia to allow all mobo mfg to support SLi without having to pay a bs fee.

posted by : John, 20 May 2009 Complain about this comment
Jen-Hsun Huang

What's the chinese word for FUCKWIT ?

posted by : Ted, 20 May 2009 Complain about this comment
@John

What part of the previous comments stating that 'dumping' is illegal don't you understand?

I'm no fan of Nvidia but they have a good case against Intel in the EU after the recent verdict. AMD will be going directly after Intel in the EU as well as a result.

posted by : MrGiggleNutz, 20 May 2009 Complain about this comment
It depends on how many ATOM chip cost before..

If Intel was selling the bundle at $25 and Atom only at $35 "previously" but then later jack it up to $45 for Atom only, then I think that is pretty unfair. If intel released the Atom only originally at $45, then that is fair

posted by : thatdepends, 21 May 2009 Complain about this comment
@ ted

I believe the answer is (drum roll please).....

Char Lee Thefatman

posted by : Tommy Verrrrrrceti, 21 May 2009 Complain about this comment
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