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Intel takes £31 bn in monopoly profits since 1996
Author: Tim SmalleyPublished: 4th August 2007
Monopoly? AMD thinks Intel is one but the courts have yet to decide.
Dr. Michael A. Williams, Director of ERS Group, has said, “Intel has extracted $60 billion in monopoly profits over the past decade; over the next decade consumers and computer manufacturers would save over $80 billion from a fully competitive market.”
A monopoly profit is when a company can set its price at a level above the fair market price for a good or service and still not lose profits to competitors. This profit is generally a lot more then what a company could make given a fair competitive marketplace.
Should the microprocessor market be a fairly competitive market, the study has stated that consumers would save at least £32 billion while computer manufacturers would save £10 billion over the next decade. The savings to manufacturers would be passed on to R&D while improving products and creating a larger variety in products available.
The monopoly profits in question are said to have come from Intel coercing computer manufacturers and retailers alike to either stock just Intel based products or to to stock such a high number of Intel based products that it artificially affects a customer's decision on which product they would buy.
AMD and Intel have been known to row before with Intel suing AMD over AMD allegedly copying Intel's microcode back in the early nineties and then AMD suing Intel for using anticompetitive practices in the US just two years ago. The latter case is still pending a trial case set for April 2009.
Intel also faces antitrust charges from the European Union but full details are currently unavailable.
With Intel making a better product for the larger portion of the past decade, coercion attempts seem probable but also possibly unlikely since AMD didn't really garner the mass support of enthusiasts and regular consumers alike until the launch of its A64 line back in September 2003. Perhaps a price drop on AMD's processor line could have driven more sales due to the fact that price is a major factor in purchasing decisions by consumers.
Do you think that Intel really is the big, bad bully that AMD is portraying it to be or does AMD just have its panties in a bunch over not being able to gain the largest portion of the market share pie? Discuss it with us over in the forums or down below in the comments section.
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Comments (17)
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but intel have since improved as of 22nd july :p
i agree
Intel could litterary push AMD to the bottom of the pool if they really want too. And they will if the liveguard on the side is not watching...
Keep in mind though that generally the better product will win the hearts of consumers unless the lesser product has a better bang-for-your-buck ratio. AMD held a coupe and had topped 20 percent of the marketshare after the release of the A64 a few years back. Intel came back though with their C2D line and that left AMD just sitting there with its thumbs up its butt. If companies would put half of much effort into their R&D as they put into whining and these lawsuits, then current technology would probably be far superior then what it is today.
If Intel is a bigger company with more resources, that gives them a capability to hold extra weight in the market and control the situation a bit more. Taking advantage of that is good business practice. Instead of striking deals to sell more processors, should Intel have been sending checks to AMD, you know, to help the little guy? Noooo....this is business, not pre-school sharing time.
Yes, it is true that the marketplace is better when there are several competitors...but if one competitor finds themselves in the lead, it's not their job to help everybody else catch up.
"Monopoly" is being thrown around in all this like an evil buzz word in an attempt to blame Intel for any apparent failures at AMD. We don't here IBM complaining about Apple switching to Intel chips -- one way or another, Apple saw Intel's product as a better choice. Interestingly enough, Apple didn't choose AMD's products either...and I don't think Apple would have been affected by the fact that Intel made an exclusivity deal with Dell, now would they?
Intel simply have a better product at present. Im not sure of their business dealings from 1996, but they certainly havnt done anything wrong in the recent past as far as I am aware. Its not as if they are using their market dominance to segregate the market so that they are the only choice available to consumers.
Umm if you might remember Intel has apparently used it's market power to threaten companies who are considering using AMD processors. They've threaten to take away discounts if OEMs don't exlusively use their processors.
I don't care how far ahead Intel gets, I'm sticking with AMD.
Wasnt aware of this. Got any links?
:(
Quite frankly though, I find this study very biased as the firm that did the study was basically paid by AMD to do the study. Should an independent firm with no ties to either business or the industry find the same results, I'd believe it and not take it with a massive grain of salt like I do with this one.