Did AMD take a bite out of Intel's forbidden Apple?

Did AMD take a bite out of Intel's forbidden Apple?

Summary: Are Intel's aging exclusivity agreement, the rumored 2010 testing of AMD processors at Apple, and Intel's new "Attack of the Air Clones" really a coincidence?

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Am I the only person who is wondering why Intel seems bent on using Ultrabooks to undercut sales of Apple’s MacBook Air? After all, thin PC notebooks are nothing new. Why did Intel suddenly decide to throw hundreds of millions of dollars at non-Apple manufacturers to make thin laptops? And why do they all look like MacBook Airs?

I think I figured it out!

I have linked together several events in the last few years that may reveal a fascinating, underlying motive behind Intel’s Ultrabook initiative:

1. Most consumers and Apple fans do not know that Intel actually succeeded in locking Apple into an exclusivity agreement in 2005 - in exchange for porting Apple’s computers and laptops over to the X86 platform. For the last several years since that rumored event, Apple has not put a single AMD central processor in a single Apple computer.

Naturally, Intel hasn't exactly complained about the illusion from consumers that Apple doesn’t think AMD’s CPUs or APUs are suitable for Apple products. In reality, Apple sacrificed their freedom of choice, in exchange for Intel’s help with porting.

2. Exclusionary requests are nothing new at Intel. In 2010, Intel got into antitrust trouble in Europe and America (after getting in trouble in Asia as well) for engaging in numerous, secretive, billion-dollar “carrot and stick” schemes to coerce and compel manufacturers and even retailers into not making or selling AMD-based products. Intel even secretly paid Dell 6-billion dollars (among many other complying manufacturers and even retailers) in exchange for not using AMD processors. European regulators took an unprecedented SWAT team approach to their investigation and raided the corporate offices of retailers.  They found that Intel was bribing tech retailers not to even stock AMD-based systems.

Wow!   No wonder AMD doesn't have any money left for proper R&D these days!  AMD even had to sell their factories to stay alive!

Intel apparently avoided antitrust scrutiny for many years by allowing most manufacturers (except Dell) to produce a few intentionally-low-end AMD systems, as their existence  helped Intel avoid antitrust scrutiny yet and were little threat to Intel's image of superiority. Based on subpoenaed emails in the NY Attorney General's complaint, HP’s executives were so scared of Intel’s unwritten yet enforced punishments that they refused a gift of thousands of free processors from AMD.

When manufacturers violated Intel’s demands by using too many AMD processors, Intel would exact punishment in many creative forms on the manufacturers. Thus, Intel has a long history of punishing manufacturers for attempting to break free of Intel’s monopolistic demands.

3. The Federal Trade Commission’s Consent Decree in 2010 was forward looking, so Intel’s exclusivity with Apple was probably allowed to continue to its unknown end date.

4. How long was Intel’s secretive exclusivity agreement with Apple? In order to figure this out, we must of course speculate about how long Apple would be willing to sacrifice their freedom to Intel in exchange for Intel’s porting service. Maybe five years?

5. Just as a note, AT&T’s well-known exclusivity agreement with Apple was five years in duration. So perhaps the Intel/Apple agreement was a similar duration?

6. In mid-2010 (coincidentally five years after Intel succeeded in locking Apple into an exclusive relationship), very few people noticed the news that Apple started testing AMD processors in their labs.

7. Thus, Apple apparently seriously considered AMD inside Apple products in 2010. Or perhaps Apple even started making plans for AMD inside Apple products?

8. Since we know that Intel has a long history of devising carrot and stick schemes to encourage manufacturers to cooperate with Intel’s monopolistic demands, is it possible that Intel’s true motivation behind Ultrabooks (MacBook Air clones) was to punish Apple?

It seems like a plausible explanation for why Intel is getting all the non-Apple manufacturers to make MacBook Air clones, and it also may explain the unusual 300 Million dollar fund that is probably enabling the Air-Clone manufacturers to undercut Apple MacBook Air on price?

The end result is that Apple is between a rock and a hard place: Apple must either lose market share in the "Air and Air Clone" segment of the market, or they can compete with Intel’s artificially-low-priced clones by reducing MacBook Air’s prices to unprofitable levels. Of course, Intel knows that Apple’s only painless option is neither of the two; the only painless option is for Apple to drop any plans for AMD and therefore return to Intel.  Thus, the MacBook Air would then officially become an Ultrabook!

In a recent interview, an Intel executive said that “it is up to Apple” to decide whether or not the MacBook Air is an Ultrabook. Did the executive mean that it isn't too late for Apple to return to Intel's arms and take a seat at the 300-million dollar Ultrabook dinner table?

The FTC’s recent Consent Decree to Intel clearly states that Intel is not allowed to threaten or punish manufacturers for using a competitor’s processors. However, Ultrabooks and the accompanying 300-million dollar fund may be a brilliant, if not rather ingenious, monopolistic punishment from Intel, as it just narrowly avoids direct conflict with the terms set forth by the FTC’s Consent Decree.

By claiming that they just want to “innovate” by creating a not-so-new product category, Intel may likely sidestep conditions set forth in the Consent Decree. Lawyers at the FTC will probably have difficulty proving that Ultrabooks are nothing new, and Intel just created the category to wriggle through a Consent Decree loophole to get at Apple.

Additionally, paying the non-Apple manufacturers to undercut the MacBook Air on pricing may be argued as “using venture funds to market and create the products”, rather than predatory pricing. Pressing the manufacturers to make steep reductions in their Ultrabook retail prices will make their margins dependent upon "advertising and development payments" from Intel Ultrabook Fund, but that could be argued as aggressive pricing on a not-so-new product.

And, of course, the fact that these Ultrabooks look almost exactly like MacBook Airs? Well, that’s just… coincidence?

Image: AppleInsider

Topics: Intel, Apple, Hardware, Laptops, Mobility, Processors

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  • RE: Did AMD take a bite out of Intel's forbidden Apple?

    Congratulations for this article.

    Articles like yours are very rare because most of journalists have their soul sold to Intel's marketing strategy.

    So go on ... people have to know the truth about the underground tactics in the world of technologies.

    I cannot accept situation Intel having 80% of market and get billions of proffits and AMD have about 20% and get miserable 30 - 40 mollions proffit
    tbaracu
  • Good write p except:

    <i>"In reality, Apple sacrificed their freedom of choice, in exchange for Intel???s help with porting.</i>

    OpenStep was always iApx86 compatible. There is no indication Apple needed any help porting OS X

    AT&T's agreement could not have been 5 years. Most thought it was actually 3 years. Verizon got the iPhone at a bit over 3.5 years making a 3 year deal more likely.
    Bruizer
    • RE: Did AMD take a bite out of Intel's forbidden Apple?

      @Bruizer
      It was 4 years after the Jan 2007 announcement and I don't think Apple and AT&T signed it the day before. Does a year of preparation and co-development sound plausible and does an executed exclusive agreement before the carrier invests in network changes make sense? It does to me.

      As for x86 your point is correct, but the point of the agreement would be that Intel has terms of performance in return for exclusivity. Again, this would be in context of choosing between Intel and AMD.

      Justin's observations are good, but the scenario is not the only one that fits.

      Microsoft putting Windows 8 on ARM may be scarier than Apple taking its 10% share to AMD. Apple also has a rich environment of ARM compiled applications. Intel may be worried that Apple may be working on the iPad that moves closer to a netbook.
      DannyO_0x98
  • RE: Did AMD take a bite out of Intel's forbidden Apple?

    Intel processors are indeed faster and cooler, however the author does make the point that AMD was crippled by the secretive demands of their adversary. As a consumer, I cannot expect to favour one company over another, as my resources are limited, however government should play its role and assure that competition is possible.
    ingle
    • RE: Did AMD take a bite out of Intel's forbidden Apple?

      @ingle As a consumer I heartily expect the freedom to choose one product over another, for whatever reason. As for the government assuring competition, what government does that? All the US government, thus far at least, does in regard to monopolies is regulate that they can't totally wipe out other companies trying to compete. Netscape and Microsoft come to mind. Monopolies are not of themselves illegal.
      dheady
  • Apple has a boatload of cash...

    ...so, maybe they will just buy AMD and bring it in house? Since Apple considers themselves a hardware company that would make sense, and would have the cash to push AMD to the forefront in R&D.
    itpro_z
    • RE: Did AMD take a bite out of Intel's forbidden Apple?

      @itpro_z if that does happen I will cry... No more cheep graphic cards for PC. T_T
      xtreem0
      • RE: Did AMD take a bite out of Intel's forbidden Apple?

        @xtreem0 Not necessarily. While Jobs would have happily killed the PC graphics division, I think Timmy's a little more business-smart.
        Champ_Kind
    • RE: Did AMD take a bite out of Intel's forbidden Apple?

      @itpro_z They better not! I like building AMD PCs; and Apple would most likely stamp out the parts business - or limit it somehow, if they purchased AMD.
      Imrhien
  • As much as I'd like it....

    I just don't see it happening. Apple would have to re-optimize their code to take advantage of AMD's multi-core strategy, not to mention that they'd have to code numerous chipset drivers for use with OS X. Also, they'd have to support USB 3, what with AMD's full support of the standard in their chipsets, and I doubt they would give up Intel's partnership that created Thunderbolt.

    I think there's a better chance that AMD just ports more OS X features to iOS, kills OS X in favour of iOS, and drops Intel in favour of their own ARM designs. Look at how much ARM development has proceeded in the past few years compared to Intel. Even AMD is innovating in multi-core designs and GPU integration better than the 800-lb gorilla.

    What I think is going to be awesome is when AMD and ARM birth their lovechild of DX11+ capable GPU cores with low-power many-core ARM CPU cores. I would bet Apple would be first in line of the big OEM's to take advantage of that.
    Joe_Raby
    • RE: Did AMD take a bite out of Intel's forbidden Apple?

      @Joe_Raby To take true advantage of it, yes. BUT, AMDs already work with OSX very well, contrary to popular belief. It may have a slightly different architecture, but it's still x86. Hackintoshes require very small and simple patches and they work seamlessly with OSX.

      Rikaroo is right as well, the price difference per-Mac would be quite large. Large enough to pay for itself.

      When Apple switched from nVidia to AMD Radeon, the optimizations paid for themselves pretty quickly as well. I understand that nVidia and Radeon are closer in resemblance than an Intel and AMD CPU, but not so much to the point that it wouldnt be done because of the cost of re-optimization.
      Tylemagne
  • RE: Did AMD take a bite out of Intel's forbidden Apple?

    Truly, if you see the signs, this article is incredibly accurate. Don't you think the price break would more than offset the cost of upgrading software and firmware could be done where both sides would absorb the costs??? (edit) and there already exists patches and programs in linux that work with the new procs.
    Rikaroo
  • RE: Did AMD take a bite out of Intel's forbidden Apple?

    I think one of the main incentive for MS to port Windows 8 to ARM is that Apple is moving its line of Macbook Airs to ARM. I do not think they would stick with Intel or AMD for longer... As far as tablet goes, Windows 8 still has a lot of work to do for having a long lasting battery life... Intel is scared of ARM and not of AMD and now that Windows 8 is also being ported to ARM, it is more apt to say ARM takes a bite out of Intel!
    browser.
  • RE: Did AMD take a bite out of Intel's forbidden Apple?

    Or.. it could be that Intel makes better chips.
    TechNickle
  • RE: Did AMD take a bite out of Intel's forbidden Apple?

    Duplicate.. DELETED

    Flagged self as such.. please DELETE.
    TechNickle
  • And nothing to do with...

    the lacklustre performance of recent AMD products?

    I used AMD products for years, because they were more powerful, whilst using less electricity - back in the days of the Pentium 4 etc.

    For a long time, Intel didn't have an answer and I was happy to use AMD products.

    Then it swung the other way, and seems to have caught AMD napping, just like AMD's initial rise cause Intel napping. They have been slow to get out a competitor to the Core 2 and Core i- chips, and even Llano and BD don't seem to stack up that well, especially in efficiency and power usage.
    wright_is
  • RE: Did AMD take a bite out of Intel's forbidden Apple?

    Given the fact that American regulators are very often very reluctant to punish their own, the chances are huge that the European Union will fine intel up to 20% of its Global turnover soon. In the meantime Apple might simply opt to stand out of the crowd and develop their own processors just like in the iPad and the iPhone.
    rhon1
  • RE: Did AMD take a bite out of Intel's forbidden Apple?

    Whilst an interesting read from Jason, I don't think Intel's venture into Ultrabooks is to "punish" Apple for getting into bed with AMD. If Apple was going to stick a new chip in its Macbook Air, it would most likely be looking at an ARM (A6/A7/A8...) chip rather another X86. I think Intel's push into Ultrabooks is more a defensive strategy (i.e. to ensure X86 chips are placed in Ultrabooks) rather than an offensive attack on Apple. Especially once windows 8 comes out with ARM compatibility, Intel will have a real fight on its hands.

    Furthermore, to your question "Did the executive mean that it isn???t too late for Apple to return to Intel???s arms and take a seat at the 300-million dollar Ultrabook dinner table?", I doubt that Apple would ever want to slap on an Intel stick over its products. With $80bn+ in the bank, $300m is just loose change to Apple. Apple would rather spend a couple billion securing long term chip supply contracts of A6/7/8 chips with TSMC
    javaner
  • RE: Did AMD take a bite out of Intel's forbidden Apple?

    I tried a macbook air on a store, and it lagged with an Intel Inside-it. (when I was launching movies)
    TheFilipinoFlash
  • RE: Did AMD take a bite out of Intel's forbidden Apple?

    if thats the case in the future I just hope Apple's Mac prices will go cheaper since they have everything both hardware and software in one complete package. If not then there's no way Apple will become a for the masses computer.
    jybumaat