Intel vs. Negroponte: Time For AMD’s Take

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Includes: AMD, INTC
by: Eric Savitz

Two days ago, I wrote a post commenting on a 60 Minutes piece last Sunday which looked at MIT professor Nicholas Negroponte’s One Laptop Per Child project, which aims to put a specially designed cheap laptop in the hands of every school age child on Earth.

In particular, I zeroed in on Negroponte’s assertion that Intel (NASDAQ:INTC) has been “shameless” in trying to kill off the project by creating a competitive laptop called the Intel Classmate. Negroponte alleges, among other things, that Intel is trying to kill the OLPC project for using Advanced Micro Devices (NASDAQ:AMD) processors in the device, rather than Intel parts. My post was more sympathetic to Intel’s view, suggesting that market forces would come to the rescue if there really is an unmet market for a billion laptops.

Anyway, all of that is by way of introduction to a letter I received from AMD weighing in on the issue. It’s an interesting take, which nicely demonstrates the ongoing hostility between the two processor companies: note the assertion, for instance that “Intel views poor children of the world as a market opportunity.” Here is the text of the letter:

Hello Eric,

I read with interest your blog about Intel and OLPC in the wake of Sunday’s controversial 60 Minutes report: http://chip.seekingalpha.com/article/36294
[Note: Some of my posts on this blog are republished by Seeking Alpha.]

The 60 Minutes piece is fascinating indeed, but I think [60 Minutes correspondent Lesley] Stahl wasted a huge opportunity to confront [Intel Chairman Craig] Barrett not on the Nigeria letter she waved in his face, but on the predatory dumping practices Intel is allegedly engaging in to undercut and eventually kill OLPC.

You quoted Barrett saying “It will take the whole industry to do this.” I don’t doubt that’s the case, and I presume OLPC agrees. But Intel’s business practices dictate that the rest of that sentence would read “…as long as they get in line behind Intel.”

I suspect that Nicholas and OLPC welcome fair and open competition. But if Nicholas’ allegations of predatory practices like dumping are true, then that’s not what’s happening here at all. That amounts to making procurement officials in developing nations an offer they can’t refuse.

What we have here is an infinitely powerful monopoly metaphorically threatening to break the kneecaps of a non-profit if it doesn’t “get in line.” And if it won’t get in line, they’ll simply overwhelm OLPC with resources, relationships and FUD (a la the Nigeria documents).

It’s easy for the discussion to degenerate into AMD v Intel – but that’s frankly a cop-out.

People need to understand that this is not about AMD v Intel. This is actually about Intel v everyone else.

Intel views poor children of the world as a market opportunity, and they seem to have no problem steamrolling a non-profit like OLPC through anti-competitive business practices set in motion with the single purpose of monopolizing this market. If this approach feels familiar, that’s because it is. It is exactly how Intel came to monopolize the mainstream PC industry worldwide.

Thanks for your time,

Mike

Michael Silverman
AMD Global Communications
http://www.amd.com/breakfree