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[C|NET] AMD takes exception to Intel's tablet rebates - Page 7

post #61 of 135
I totally see why ppl are biased against intel (who are proven crooks), but I think their move is justified in this case.

In this particular case, Intel tries to push a platform that allegedly is "too expensive".
The profit margins for OEMs are much more limited, and honestly why would Dell or Lenovo or whoever else has both an ARM and a x86 Tablet line, care whether they meet their set goals selling ARM tablets or Intel tablets. They just don't want to go "under", insisting into supporting something that doesn't give them returns.

If intel wants to be more competitive, it is them that have no only the biggest profit margin (from a production standpoint, forget R&D for a sec, what's done is done, and now they have to push stock) but also the most to lose if their product doesn't "make it' in the market (that's where the R&D part hurts the most as much of it might go to waste for a cycle).
If OEMs lose money, on their intel tablets (or w/e) they will push the remaining stock on a sale just to recuperate some production cost, and perhaps not touch intel in this sector again or reduce demand to a level that won't ensure the continuation of that line. That's what intel tries to do. Survive in this particular sector.

BUT, there are many valid points in in the AMD vs. Intel case, and I really don't like how intel fanboys "don't get it": they had more money and more connections to drag the case long enough to starve the competition. The damage done in the long run is pretty hard to put a value on. This is the game most industry giants play, stomping the competition. It's only in rare cases, like with Samsung vs. Apple where you get to see blows being traded from both sides: in most other cases - and there are many, just don't gain publicity - both Apple, Samsung and their likes use bureaucracy (everybody knows it can be dragged for years), and the ramping litigation costs to their advantage. It is about big pockets, and not justice.

It's like stealing $1 from a 3rd world country (sorry for the equation AMD) worker - it's not "a mere $1", it is a week's wages or so. Make it a "a few bucks" and we are talking weeks or months of them being deprived of essentials - it is not like most ppl on this planet are sitting on stacks of money.
Having the court come back and "punish" the American or European individual who got those few $ by fining him/her 1x or even 2x that, is "nothing".

You get anywhere from half to full month the average wage's traffic ticket, but companies that clearly conspire against fair practices, not to stay afloat (which is understandable to an extent) but to clearly destroy the competition, indirectly harm consumers (and perhaps cost 1000s of jobs) and dominate their field earning $Bils, get a slap on the wrist (some get bailouts ontop).
If you can afford to be punished over and over again, even come with a profit over it, then what's the point?
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post #62 of 135
Quote:
Originally Posted by Durquavian View Post

The problem isn't costs yet, it is the contractual obligations to receive the rebate. Even if they don't stipulate what processors or % makeup a case could be made against it. Say company A makes 45000 tablets a year. Rebate claims a minimum purchase of 30000 but makes no claims to other production amounts of said tablet manufacturer. A case could be made for non-competitive business practice simply based on the fact or likely outcome that said company would not continue using previous competitor at the rate of 45000 units.

There is way more to the story than just price.

[Citation Needed]
post #63 of 135
Quote:
Originally Posted by Durquavian View Post

The problem isn't costs yet, it is the contractual obligations to receive the rebate. Even if they don't stipulate what processors or % makeup a case could be made against it. Say company A makes 45000 tablets a year. Rebate claims a minimum purchase of 30000 but makes no claims to other production amounts of said tablet manufacturer. A case could be made for non-competitive business practice simply based on the fact or likely outcome that said company would not continue using previous competitor at the rate of 45000 units.

There is way more to the story than just price.

Isn't that simply ordering in bulk?
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post #64 of 135
Quote:
Originally Posted by mav451 View Post

Right, but can that be substantiated in this specific case?
Not enough info of the actual rebate. Was just giving a random scenario where one could see the issue. I think Intel would be better off with a reduced "introductory" price, a rebate screams non-competitive.
post #65 of 135
Quote:
Originally Posted by Alatar View Post

It's basically the same thing, AMD was willing to go that low to get a deal from MS and Sony, Intel is willing to go lower than $40 for BT to get design wins. Whether it was a one time deal or tons of smaller deals doesn't really matter.

Besides my point wasn't really about that. It was about pointing out how ridiculous it is that people think $60-80 350-400mm^2 SOCs are sold above cost but intel's sub $40 100mm^2 mobile SOCs aren't.
Still didn't convince me.
AMD was not willing as much as able to go that low. In games the GPU is nr. 1 so even if Intel had a better cpu at the same price AMD did their gpu would most likely be way inferior.
That is why AMD wont the consoles not because in was mainly cheaper. Most likely MS and Sony set up a price and asked the companies what can they offer them for it.
post #66 of 135
Quote:
Originally Posted by Serios View Post

Again??
How old are you??
I repeat it's not the same thing.
A company can invest in building better products and owning superior fabs but if they use their financial strength to sell products at a loss or at production cost means you have "anti competitive" situation.

Simply selling below cost isn't enough to constitute anti-competitive.

http://www.ftc.gov/tips-advice/competition-guidance/guide-antitrust-laws/single-firm-conduct/predatory-or-below-cost
Quote:
Pricing below your own costs is also not a violation of the law unless it is part of a strategy to eliminate competitors, and when that strategy has a dangerous probability of creating a monopoly for the discounting firm so that it can raise prices far into the future and recoup its losses. In markets with a large number of sellers, such as gasoline retailing, it is unlikely that one company could price below cost long enough to drive out a significant number of rivals and attain a dominant position.

In the mobile market there are LOTS of strong competitor. Intel doesn't have the market share nor financial strength to knock them all out with this pricing strategy.
Quote:
A firm's independent decision to reduce prices to a level below its own costs does not necessarily injure competition, and, in fact, may simply reflect particularly vigorous competition

In other words, it's a reflective of Intel trying to break into the market and be competitive.
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post #67 of 135
Quote:
Originally Posted by Serios View Post

Quote:
Originally Posted by serothis View Post

company A sells a product at a loss. company B sells a product at a loss. How is that not the same thing?
Are you trying to be annoyn now??
So lets see the current situation.
Company A tries to sell a product at a loss and companies B, C, D, E, F, etc. can't do that.
Again how is this the same thing with what you said???

So if Valve can't sell the Steam Box at a loss then Nintendo, MS, and Sony have to go to jail if they are doing loss leader on their consoles? Even though they have the market in a complete grip?

I am pretty sure you are trolling...because you are making absolutely no sense. If Intel even priced competitively...not many would buy their products in the Tablet world. Why? Because the manufacturers already have existing deals and history with the companies that have a grip on the market. Even if Intel had a superior product...not many would buy it. If they want in...they have to give the market a reason to do drop their current supplier and manufacturing processes and go with them. AMD needs to do the same thing...any company fighting to get a foothold in any market would have to do the same thing. Now it is known that it will not last forever...hence it is a rebate that likely has a "submit by" date on it.

Intel is just covering the cost for manufacturers to make the switch over to them...because there will be a cost. R&D on the new SOC to make a manufacturing process, R&D on finding new suppliers for Intel compatible components (you can't just slam an Intel SOC into a ARM socket), legal expense in setting up new contracts, hardware and software testing on a new design, retraining employees, updating company records...it goes on and on. Even with the rebate it might not be cost effective to switch.
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post #68 of 135
Quote:
Originally Posted by Vagrant Storm View Post

So if Valve can't sell the Steam Box at a loss then Nintendo, MS, and Sony have to go to jail if they are doing loss leader on their consoles? Even though they have the market in a complete grip?
Custom made PC's, not the same thing, also Valve doesn't make them.
Quote:
I am pretty sure you are trolling...because you are making absolutely no sense.
I'm trolling?? yeah. And I make plenty of sense do not worry.
Quote:
If Intel even priced competitively...not many would buy their products in the Tablet world. Why? Because the manufacturers already have existing deals and history with the companies that have a grip on the market. Even if Intel had a superior product...not many would buy it. If they want in...they have to give the market a reason to do drop their current supplier and manufacturing processes and go with them. AMD needs to do the same thing...any company fighting to get a foothold in any market would have to do the same thing. Now it is known that it will not last forever...hence it is a rebate that likely has a "submit by" date on it.

I see no reason for OEMs for not buying a superior product that has a really competitive price.
Intel wants to throw money because they lost the start and things are moving to slow for them. Yes its not an OK situation for a competitive point of view.

Quote:
Intel is just covering the cost for manufacturers to make the switch over to them...because there will be a cost. R&D on the new SOC to make a manufacturing process, R&D on finding new suppliers for Intel compatible components (you can't just slam an Intel SOC into a ARM socket), legal expense in setting up new contracts, hardware and software testing on a new design, retraining employees, updating company records...it goes on and on. Even with the rebate it might not be cost effective to switch.

Wouldn't that be nice for any company to be able to do the same thing?? Not anybody can take a loss just to convince new business partners to use their products. Intel wants to take market share not earn it.
Edited by Serios - 4/19/14 at 1:37am
post #69 of 135
Quote:
Originally Posted by Alatar View Post
 
Quote:
Originally Posted by Artikbot View Post

You do not actually believe that do you.

I definitely do when it comes to the tablet and smartphone SoC market.

x86 CPUs no obviously not, but smartphones and tablets definitely.

 

Got me there. So many comments back and forth, forgot the topic of what we were talking about. :cheers:

   
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post #70 of 135
Quote:
Originally Posted by Serios View Post

Quote:
Originally Posted by Vagrant Storm View Post

So if Valve can't sell the Steam Box at a loss then Nintendo, MS, and Sony have to go to jail if they are doing loss leader on their consoles? Even though they have the market in a complete grip?
Custom made PC's, not the same thing, also Valve doesn't make them.
Quote:
I am pretty sure you are trolling...because you are making absolutely no sense.
I'm trolling?? yeah. And I make plenty of sense do not worry.
Quote:
If Intel even priced competitively...not many would buy their products in the Tablet world. Why? Because the manufacturers already have existing deals and history with the companies that have a grip on the market. Even if Intel had a superior product...not many would buy it. If they want in...they have to give the market a reason to do drop their current supplier and manufacturing processes and go with them. AMD needs to do the same thing...any company fighting to get a foothold in any market would have to do the same thing. Now it is known that it will not last forever...hence it is a rebate that likely has a "submit by" date on it.

I see no reason for OEMs for not buying a superior product that has a really competitive price.
Intel wants to throw money because they lost the start and things are moving to slow for them. Yes its not an OK situation for a competitive point of view.

Quote:
Intel is just covering the cost for manufacturers to make the switch over to them...because there will be a cost. R&D on the new SOC to make a manufacturing process, R&D on finding new suppliers for Intel compatible components (you can't just slam an Intel SOC into a ARM socket), legal expense in setting up new contracts, hardware and software testing on a new design, retraining employees, updating company records...it goes on and on. Even with the rebate it might not be cost effective to switch.

Wouldn't that be nice for any company to be able to do the same thing?? Not anybody an take a loss just to convince new business partners to use their products. Intel wants to take market share not earn it.

As a new player in an existing market...all market share is taken. Unless you invent something that rivals the electric light replacing gas and oil lamps and that is not what is going on. No manufacturer will spend millions of dollars to develop a tablet based around Intel's product even if it had 10% more performance in certain tasks. Consumers would just not want to pay that much more for a device that wasn't that much better then the rest.

This is business 101. I am sure that if you dug into it you will find instances of AMD doing the same thing...I am sure at some point AMD has offered an introductory price or rebate to places like Dell or to graphics card manufacturers. It happens in every market. So much so that until this cry baby statment from AMD that it's never really been noticed before...or else was considered a good thing for the market (and it usually is). There is certainly no law against it and it is the only way we will ever see a new option in any large established market. How well would Linux be doing on desktops if it was owned by a company that charged for it? Even at a cost of free it can't beat out Windows or Apple in most areas of the market. We see the opposite in the mobile world where google is giving away the open source android, but charging a fair amount for all the goodies they add that consumers have gotten used to. So MS is giving away Windows to any device with a small screen in an effort to get more into the market.

Your point you are tying to make is the same that mom and pop shops have against Walmart..."We can't sell it as cheap as they can. It isn't fair and people should come to our store no matter if there are higher prices and lower selection". It is a socialist point of view that involves the redistribution of wealth and opportunity and the current global economy doesn't work like that. It might be immoral and works against the little guy, but it is nothing compared to what a couple large companies holding a huge market share does against the little guy. That is what the target of this rebate is. It is not to stop other start ups in the market...it is to hack and slash out a foot hold on the market and give Intel a platform on which to expand.

And you know what? Most of the time this doesn't even work and manufacturers will just stay with the big dogs and companies will end up loosing a lot of money for no gain. It's a risk, but am sure Intel is getting worried about the future of PC sales. So they are going to have to gamble if they want into the big money...which is looking to be mobile devices in the near future.
Edited by Vagrant Storm - 4/18/14 at 12:08pm
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