Intel Goes Even with AMD

Intel, the chip major which supplies close to a whopping 80% of PC
microprocessors has ended its long drawn legal battle with AMD by
agreeing for a $ 1.25 billion payment. AMD has all the while claimed
that Intel had practiced exclusionary tactics that led to rewarding
system vendors using Intel and took a step motherly treatment for those
vendors using AMD chips.



Despite Intel stating that it never involved in such unfair business
practices has opted to settle the dispute mainly to liberate itself
from further legal complications. The case is scheduled to come on
trail in Delaware next year and in the event of the verdict going in
favour of AMD might have hurt Intel more in terms of damages.
Furthermore, it would have also hurt Intel’s brand. Given
that, this out of the court settlement is seen as a strategic move by
industry analysts.



Intel over the last few years has come under the radar of regulatory
authorities in many countries for its exclusionary tactics and its
pricing practices but of all, its case with AMD was far more serious
with significant financial implication and hence it had bent a bit with
AMD.



If we look at the larger impact of the case, for AMD it has got the
much needed respite and for Intel it will not in any way significantly
alter it’s licensing and sales practices and observers expect
that it will be more cautious to avoid major litigations in the future
arising out of business practices and matters involving patents.



Intel over the last few quarters has aggressively launched new chips on
the Corei series and AMD is struggling to put forward its value in
terms of how its chips offer more performance compared to Intel. Most
of the analysts aver that the era of performance as the only key metric
in a chip is blurring out as both AMD and Intel has reached a level and
their chips are capable of performing varied computing tasks. The key
then is pricing, rebates, licensing and managing the OEMs. For instance
the kind of co-marketing agreements chip vendors have with PC
manufacturers hold the key to more volumes. Intel’s huge
marketing budget naturally puts it in an advantageous position compared
to AMD.



AMD contrasted with Intel is extremely
small, but over the last two decades it had challenged Intel on various
fronts and it has carved a place for itself in the Server space. As we
look at the current market dynamics, AMD needs to up its ante in the
consumer PC side on both notebooks and desktops with more innovative
products that has smaller lead times from conception to hitting the
market. Some analysts also feel that AMD has to adopt a more aggressive
go to market strategy in emerging markets where Intel has launched a
range of initiatives.