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FTC suit will impact the Atom chip
YESTERDAY'S ANNOUNCEMENT that the Federal Trade Commission (FTC) is suing Intel for alleged antitrust violations could be bad news for the company's Atom processors.
The FTC claims that Intel uses illegal incentives to encourage computer and device manufacturers to use Intel processors over those from competing chip makers.
ABI Research said that although Intel does not hold the same sway in the mobile device industry that it does in personal computers, whatever actions the FTC takes will apply to all of Intel's business units, including the division responsible for its mobile-oriented Atom processor. Kevin Burden, director of ABI Research's mobile devices practice, told Digitimes that Atom has had early success in the netbook segment but the industry is dominiated by ARM-based processors.
Chipzilla's position in the netbook market is already threatened by the low power consumption and connectivity capabilities of ARM processors. The net result is that if Intel is stopped by the FTC it could make it easier for ARM to extend its lead in mobile devices.
Today Intel slammed the FTC as being misguided for dragging it kicking and screaming to court. In a statement Chipzilla claimed it had "competed fairly and lawfully" and its actions have benefited consumers.
"The FTC's case is misguided. It is based largely on claims that the FTC added at the last minute and has not investigated. In addition, it is explicitly not based on existing law but is instead intended to make new rules for regulating business conduct. These new rules would harm consumers by reducing innovation and raising prices," a spokesperson for Intel said.
Intel senior vice president and general counsel Doug Melamed added that this case should have been settled, but settlement talks stalled when the FTC wanted too much cash to go away. The FTC also wanted restrictions on price competition and enforcement of intellectual property rights. It would have made life too difficult for Intel and it would have to shut down.
"The FTC's rush to file this case will cost taxpayers tens of millions of dollars to litigate issues that the FTC has not fully investigated. It is the normal practice of antitrust enforcement agencies to investigate the facts before filing suit. The Commission did not do that in this case," said Melamed. µ
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Intel is so worried that their inadequate chipset integrated graphics won't be implemented that they do indeed ONLY offer the combined chipset and Atom combination for ~$25 where if a manufacturer wants just the Atom CPU alone they pay roughly $45-$50.
If that is not coercion I don't know what is. What manufacturer wants to wind up with tens of thousands of worthless Atom chipsets?
On top of that I would be willing to bet that if a company ordered the Atom CPU (Only) SKU that Intel would say that they are on allocation, why? Because they have them all bundled in the Atom CPU & Chipset SKU.
Intel may be dragged kicking and screaming into court but it is for good reason. I'm kind of glad (now) that the FTC waited this long as Intel thought they could get away with this "Racket" so they kept making the case more iron-clad for the FTC.
Intel, you have nobody to blame but your greedy, borderline criminal actions.
You really ought to keep up.
First, we're not talking about laptops. The Atom has been primarily going into 'netbooks' which are cheaper & lower performance than laptops.
The big news in this space is that there are a bunch of ARM-based 'smartbooks' being developed to go to market in 2010. These are intended to be cheaper than netbooks, but also expected to be lower performing as well
Google it.
Intel will vehemently deny anti-competitive behavior even after having admitted it.
If the CPU = Chipset is cheaper than the CPU by itself, why would anyone buy the CPU by itself? Buy the combo and use the CPU and whatever chipset you might also buy elsewhere. If Intel were to void the sale over discarded chipsets that would clearly violate antitrust laws.
Certainly, as Intel did in the EU, they will immediately cease and desist doing what they aren't doing to comply with the FTC's request.
The faster they quit doing what they aren't doing, everyone will be happy.
HB
I think it's pretty obvious from all the tech articles that Intel is positioning the Atom for a low cost, low power market. They replace last years offerings with this years after more integration. In this case, Atom is evolving to a CPU+chipset that dramatically lowers power and lowers the cost of the entire system. These are cheap ICs compared to their bigger laptop & desktop cousins. It's standard practice everywhere to position products with pricing to move new products into high volume. What do you think a motherboard would cost if all the ICs were sold separately ? Bundling is not a bad thing.
What matters is whether or not Intel is selling below cost. With margins of ~50%, even for the Atom, that hardly seems likely. Even AMD has margins of ~40%.
Tough competition, pure & simple.
COOL STORY, BRAH!
ARM is architecture, they design core, but they don't manufacture processors.
Chips maid around ARM cores manufactured by various firms like TI, Samsung, Nvidia, Qualcom, Marvel just to name very few.
On the other hand, Intel design and manufacture processors. Others like VIA and AMD have little to none at all threat on Intel's monopole in x86 world.
WHERE ARE THE ARM LAPTOPS??
I can't see any.
it's with the fact that Intel sell the combined Atom & 945 chipset for LESS money than the Atom by it's self. Anyone who wants to build a machine based on another chipset (like nVidia's ION for example) is therefore at a serious price disadvantage, having to both pay for the 3rd party chipset and also to NOT use Intel's offering.
This is obvious anti-competitive practice on Intel's behalf and the FCC has recognised it as such. It's also incredibly easy for Intel to make the problem go away - reprice the Atom CPU so it's slightly cheaper than the combined package.
Maybe this will stop them from charging more cash for the atom chip by itself as opposed to bundling it to their own chipset.