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Topic: Laptops

Is Intel attacking Apple with Ultrabook subsidies from behind a veil?

Summary: The war that Intel declared against Apple just became public. Will the notoriously anti-competitive gorilla get flattened by the $500B elephant?

Jason D. O'Grady

By for The Apple Core |

It looks like the war that Intel declared against Apple (possibly as retaliation for testing AMD processors in the MacBook Air in 2010) has just become public. A few weeks ago, I noted an unusual move by ASUS, one of Intel's Ultraclone makers, to erase evidence of its competition with the MacBook Air from a Intel/ASUS co-branded webpage.

Fruit brand

In the screenshot (above) from October 2011, ASUS identified the competitor to its Zenbook Ultrabook as a "Fruit Brand" (middle laptop) only to abruptly change the wording to "Top seller with Windows 7" on the current Zenbook product page (below).

Top seller with Windows 7

Taiwan Semiconductor's chairman Morris Chang spoke in metaphors about Intel's Ultrabook war on the MacBook Air in a recent speech. Chang said that Intel is competing directly with TSMC's customers while "standing behind a veil."

Secretive Apple and AMD both happen to be big TSMC customers, and both are noticeably absent from Chang's speech.

Given that Intel is paying subsidies to all non-Apple computer manufacturers to make artificially-underpriced MacBook Air clones, (strangely reminiscent of the same anticompetitive rebate scheme that got Intel into antitrust trouble in the first place), could Chang have been referring to Intel and Apple, when he said that Intel is attacking TSMC's customers from "behind a veil?"

With TSMC's Chang now pledging his support to "stand behind" its customers on the battlefield against Intel, Intel paying the non-Apple computer manufacturers to make Apple sauce out of Apple, and Apple now publicly asking Petragon to stop making MacBook Air clones, it looks like the war is on.

The hair and fur are just starting to fly. Intel is using age-old anticompetitive tactics of paying all the manufacturers to put a defiant manufacturer at a disadvantage, but the anti-competitive gorilla might just get flattened by Apple - which is now a $500 billion elephant.

Intel's Bill Calder responds:

Bottom line: This thing about ultrabook ‘subsidies’ has no basis in fact. Intel is not providing any type of subsidy on ultrabooks and we have a longstanding, excellent relationship with Apple.  As a normal course of business, Intel does provide co-marketing funds to our customers.  These funds are not “subsidies”, nor are they anti-competitive.   Furthermore, our $300m Ultrabook Fund is focused solely on infrastructure investments to drive down component costs, and none of those funds go directly to OEMs or ODMs. Any funds provided to computer manufacturers related to Ultrabooks™ are solely intended to raise consumer awareness and stimulate demand for this exciting category of products.

Related:

Topics: Laptops, Apple, Hardware, Intel, Mobility

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36 comments
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  • RE: Is Intel attacking Apple with Ultrabook subsidies from behind a veil?

    It will be interesting to see if the $500 billion elephant can maintain its lead once Windows 8 released. Apple will be relegated to a $100b Cow if Win 8 is successful. With Win 8 one can get the real thing for half the money.
    owlnet
    Reply Vote

    • Half the money?

      @owlnet <br>Even with subsidies the zenbook is right around $1,100 at discount retailers (TigerDirect, eBay, Amazon, Buy.com). How is that half the price?
      use_what_works_4_U
      Reply Vote

      • RE: Is Intel attacking Apple with Ultrabook subsidies from behind a veil?

        Not to mention that you get what you pay for. Cheap computers have rubbish components in them. How could it be any other way?
        Laraine Anne Barker
        Reply Vote

    • RE: Is Intel attacking Apple with Ultrabook subsidies from behind a veil?

      @owlnet

      So where is this $500 Ultrabook? Cause I can get an entry level Macbook Air for $999 all day and night.
      itguy10
      Reply Vote

    • RE: Is Intel attacking Apple with Ultrabook subsidies from behind a veil?

      @owlnet <br><br>Are you stuck in time? What do you define as "the real thing?" Everyone seem to be chasing the MacBook Air with new emphasis on slim hardware and design. Large trackpads with multi-touch etc. Seems to me that the MacBook Air is the "real thing" if everyone's trying to clone it. Wouldn't you agree?
      dave95.
      Reply Vote

    • RE: Is Intel attacking Apple with Ultrabook subsidies from behind a veil?

      @owlnet Way to live in that pipedream. :D
      Champ_Kind
      Reply Vote

  • So you're complaining ...

    ... that Intel is taking steps to make computers be more affordable for consumers? The horror! Also I'm not sure how you can call this anticompetitive, since Intel does not compete against Apple. I don't see why you are bemoaning the fact that Intel is taking steps to help OEMs compete against Apple, the most valuable company on the planet. If what Intel is doing leads to lower prices, more competition, and more choices for consumers, I say "Go Intel!"
    P. Douglas
    Reply Vote

    • RE: Is Intel attacking Apple with Ultrabook subsidies from behind a veil?

      @P. Douglas The point is that Intel is giveing price breaks to everyone except Apple. Favoring one customer over another is the issue.
      Wayne K
      Reply Vote

      • So?

        @Wayne K,

        Doesn't MS give price breaks to students when comes to Office? Aren't scholarships given regularly to underprivileged students? The outrage would be is if Intel gave price breaks to Apple, the largest, most profitable OEM by far, and not to other OEMs. You seem to have things all turned around.
        P. Douglas
        Reply Vote

      • RE: Is Intel attacking Apple with Ultrabook subsidies from behind a veil?

        @P. Douglas

        [i]Doesn't MS give price breaks to students when comes to Office?[/i]

        Irrelevant. Students are not reselling MS Office. This have nothing to do with the discussion. There's nothing wrong with Microsoft or Apple for the matter offering discount on their leading products (Office, iPad).

        Intel is said to be giving a $100 subsidy to Apple's competitors, for them to gain an advantage in the Ultrabook/Notebook market. Unless Intel's willing to give the same subsidy to Apple, this should raise anticompetitive concerns?
        dave95.
        Reply Vote

      • @dave

        " Unless Intel's willing to give the same subsidy to Apple, this should raise anticompetitive concerns? "

        Intel doesn't have a monopoly. No one is forced to use Intel. Anyone can buy AMD. Also, everyone is using ARM now. We constantly hear that Intel is about to go bankrupt because of ARM. Suddenly this doesn't "count" any more?

        However, my understanding is that Apple has played the supply chain so they now get their parts cheaper than everyone else. If they are getting their parts cheaper than everyone else, is that unfair? Or is it okay because it is Apple?
        toddbottom2
        Reply Vote

      • RE: Is Intel attacking Apple with Ultrabook subsidies from behind a veil?

        @todd

        [i] If they are getting their parts cheaper than everyone else, is that unfair? [/i]

        Nothing's unfair with what Apple is doing. Nothing stopping a competitor from buying-up large quantity of parts and getting discounts on those parts. Apple's been doing this since the iPod. Companies like Samsung (or Sandisk) who makes the components also have an advantage on their competition, including Apple.
        dave95.
        Reply Vote

      • RE: Is Intel attacking Apple with Ultrabook subsidies from behind a veil?

        @dave
        So it isn't unfair for different companies to pay different amounts? Good. Then it isn't unfair for Intel to offer subsidies so that different companies now pay the same amount. Fair is fair. Glad you agree.
        toddbottom2
        Reply Vote

      • RE: Is Intel attacking Apple with Ultrabook subsidies from behind a veil?

        @toddbottom2<br><br>Sure, so long as Apple get the same $100 subsidiary from Intel. Again, anyone can get the same bundled component discounts Apple is getting (if they truly believe in the success of their product like Apple did). Apple is not blocking any company from doing so. <br><br>So Apple should also be able to get the same Intel subsidiary their competition is getting. Intel shouldn't block Apple. That is FAIR.
        dave95.
        Reply Vote

      • RE: Is Intel attacking Apple with Ultrabook subsidies from behind a veil?

        @dave
        No, it is fair now that everyone pays the same.

        Apple can charge what it wants to whoever it wants. Intel is the provider. If Apple doesn't think it is fair, Apple can buy from AMD. Again, how interesting that you think it is totally fair when suppliers charge Apple less than they charge others but you think it is NOT fair when suppliers charge Apple the same.

        Poor Apple, always the victim. No wonder they are almost bankrupt. Oh wait, they aren't. In fact, they are the biggest company in the world. Poor Apple. Always in need of defense from people like you.
        toddbottom2
        Reply Vote

      • RE: Is Intel attacking Apple with Ultrabook subsidies from behind a veil?

        @Todd

        [i]No, it is fair now that everyone pays the same.[/i]

        Fortunately there's anti-trust laws Intel and everyone else have to abide by, not someone on some talkback forum.

        Intel will be dishing out 6 million to the state of New York for similar anticompetitive activities. They were found to have offered massive subsidies, incentives and kickbacks totalling billions of dollars if customers chose Intel chips over rival processors from the likes of AMD.

        http://www.bit-tech.net/news/bits/2012/02/10/intel-pays-in-new-york-case/1
        dave95.
        Reply Vote

      • RE: Is Intel attacking Apple with Ultrabook subsidies from behind a veil?

        @toddbottom2 So are you so absolutely clueless in how purchasing and volume pricing works that you can't see the difference or is it that you could never admit the difference taking away your chance to claim Apple has an unfair advantage. I suspect you know full well the difference. No competitor of Apple is prevented from getting the volume pricing they get if they want to invest in the volumes that Apple does. Of course none of them do this so they can't complain.
        non-biased
        Reply Vote

    • RE: Is Intel attacking Apple with Ultrabook subsidies from behind a veil?

      @P. Douglas Your logic is off. Pricing for special markets is different than differential pricing designed to create a competitive imbalance. And your idea that Apple is the giant has nothing to do with it. Their market share in computers is NOT dominant. As you should be well aware, Apple almost went out of business 20 years ago. Every thing they've done has been very hard fought, hard won. So why should Intel deceptively work against them? It is anti-competitive and probably Anti-Trust.
      George Kriza
      Reply Vote

  • RE: Is Intel attacking Apple with Ultrabook subsidies from behind a veil?

    Intel makes the laptops cheaper. The consumer wins. I don't see what the problem is.
    Loverock Davidson-
    Reply Vote

    • RE: Is Intel attacking Apple with Ultrabook subsidies from behind a veil?

      @Loverock Davidson- Consider the following scenario. You do the same work as fifteen others in an office. Same quality of result as the others, maybe a bit better. The boss gives all of them a $500 bonus. Not because their work is better. Not because they earned it. Because he found your resume on the network printer and he thinks you're job hunting. Is that fair? Nope.
      MPickard9
      Reply Vote
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