There is no question that the European Commission's €1.06bn antitrust fine against Intel is a lot of money. But don't expect Wednesday's antitrust enforcement move to radically change what you see when it is time to buy your next PC.
Antitrust actions can have a dramatic effect when a decision breaks a company into pieces, but the biggest factors in the rivalry between Intel and AMD — and increasingly Nvidia, too — is technology. So while AMD can be pleased with the European Commission's conclusion, it has bigger worries.
"They have a marketing problem. They need to increase size of their voice," said technology business research analyst John Spooner. "And they've got to run faster than Intel. They've got to have products that really are better and provide more value."
AMD has been tirelessly agitating for antitrust actions against its larger rival, and it has made some headway. Japan and South Korea have come down against Intel, and the Federal Trade Commission in the United States is involved in its own Intel investigation, which is not its first. AMD also has its own private antitrust suit under way in US District Court in Delaware.
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But when it comes to taking on Intel, a far bigger factor has been technology — not just processor designs, but also manufacturing skill and capacity that means chips can be priced competitively while still being profitable.
Market share changes
AMD made its biggest recent inroads against Intel
when AMD's Opteron and Athlon processors could outgun Intel's Xeon and
Pentium models, which used an outdated architecture. But Intel reclaimed that share once it modernised its designs at the same time AMD stumbled with its own manufacturing problems.
AMD's troubles continued into 2008, when it installed Dirk Meyer as the new chief executive and undertook a plan to spin off its manufacturing business.
But Wednesday's decision gave AMD a new cause for optimism, including the hope it will materially improve sales.
"We are hopeful that it will. When we have products people want to buy, we won't be in position that's artificially constrained by payments competitors are making to exclude us," said Harry Wolin, AMD's senior vice president of legal affairs. He did add, though, that technology and business practices remain important: "We still have to deliver fine products to our customers and treat our customers and partners well. We have to manufacture products with our partners."
Antitrust actions can change behaviour, to be sure. Microsoft was largely unscathed by the US Justice Department's antitrust suit that began in the 1990s. But its legacy arguably lives on: the company is exercising some self-restraint when it comes to how strongly it promotes its online services through widely used products such as Windows and Internet Explorer, and it's not because Microsoft doesn't fiercely want a stronger online presence.
But in a conference call with reporters, Intel chief executive Paul Otellini argued...
