Updated on May 14 at 2:40 p.m. PDT with additional comments from AMD.
The chip choices that Dell has made for its business PC line provide some insight into the challenges facing Advanced Micro Devices in the wake of the European Union ruling Wednesday against Intel.
"At this point in time we have one AMD desktop but no AMD notebooks," Darrel Ward, director of product management for Dell's business client product group, said in a phone interview Wednesday on a topic unrelated to the EU case. "If you talk to us a year from now, it's probably going to be different. What we try to do is optimize our portfolio based off where we see demand and where we can get the best ROI (Return On Investment) for our engineering dollars."
So, is Dell involved in some venal backroom dealings with Intel in order to box out AMD? We don't know the answer to that question, but most likely not. Dell is simply trying to provide what it considers to be the best systems for its customers.
AMD's 2001 complaint to the EU and subsequent 2005 antitrust lawsuit against Intel have propelled many of the allegations against Intel. And AMD's argument has been made abundantly clear via the EU decision: that is, Intel is leveraging its dominant market position in an illegal manner to exclude competitors from the PC processor market.
But what about AMD competitiveness? And, as a corollary, why do vendors like Dell choose Intel over AMD?
"In part it's because Intel's manufacturing is so superb," said Dan Hutcheson, CEO and Chairman of VLSI Research, a marketing research firm. "And the fact that Intel has such huge economies of scale. That's been one of their big advantages."
Hutcheson said that many companies have tried to take on Intel over the years and failed--but not necessarily because Intel behaved in an illegal manner. "Transmeta said they were going to knock Intel out with the foundry (factory) model. And then there was Cyrix," Hutcheson said. "We've just had dozens of companies over the years that said they would be more cost effective (than Intel). AMD is the only one that's come close."
AMD's struggle to gain market share isn't rooted so much in Intel's behavior but AMD's own strategies. "I'm not quite sure how much of AMD's bad luck over the last few years can really be traced to Intel's behavior," said Charles King, Pund-IT's president and principal analyst. "They've largely missed the burgeoning market in mobile computing because of decisions that they've made. Whatever injury AMD may have suffered due to Intel's rebate and discount programs, the company has really injured itself more severely over that same period of time."
AMD spokesman Drew Prairie had this to say in response to the above discussion about AMD's lack of competitiveness in the mobile PC market. "Focusing on the current market dynamics misses the fundamental point of the EC findings: it doesn't matter how much innovation AMD pours into its products, Intel broke the law to ensure that that PC manufacturers and retailers were not free to base their decisions on which products to bring to market based on the merits of Intel's and AMD's offerings," Prairie said.