SpoonFed: Is Intel an Innovator, a Bully, or Both?
At the moment Intel has two faces. One shows a company stocked with mild-mannered engineering rock stars portrayed in the chip maker’s clever new ads. The other is that of a monopolist that has bullied notebook makers and retailers into snubbing AMD through its controversial rebate programs—that is if you believe the allegations of anticompetitive practices that led the European Commission to fine Intel a whopping $1.45 billion.
There’s no question that Intel’s more compelling products have played the largest role in the company gobbling up nearly 85 percent of mobile PC market share. But as the rulings against Intel stack up, it’s getting harder to believe that its monumental lead has been driven by innovation alone.
Yesterday during Intel CEO Paul Otellini’s conference call with the media, he emphasized that key pieces of evidence had not been reviewed, which would ultimately exonerate the company in the E.U. case and two pending cases within the United States. But when the Q&A session began Otellini said something I found curious, to say the least. He argued that no computer manufacturers had joined the complaint in the European action, insinuating that if they don’t have a problem with Intel neither should regulators or consumers.
I don’t buy that argument. And so I asked, “Why would your customers complain if they feared losing your business?”
Otellini countered with “our customers, in most cases, are larger than Intel, have incredible buying power, and are excellent negotiators.” He then went on to say that my “scenario was absurd.”
Let’s ponder that for a second. If Intel controls about 85 percent of the notebook CPU market, the size and buying power of Intel’s customers is virtually irrelevant. Consumers have voted with their wallets that they prefer Intel, and there’s really nowhere else for the Dells and HPs of the world to go other than into the arms of the struggling AMD (although VIA and other chips are gaining momentum). Suggesting that large companies haven’t complained about Intel’s practices is proof of no wrongdoing is like saying the Soup Nazi offers great customer service because patrons don’t shoot their mouths off.
In my mind, the jury is still out on Intel, at least until this unseen evidence sees the light of day. I just hope the company stays on the right side of the law in its continuing quest to stay one step ahead of Moore’s Law. I want the best geeks—not the best bullies—to win.