Intel found to be abusing market power in Japan

On 16 Mar 2005 14:30:00 -0800, "YKhan" wrote:

Robert Myers wrote:


snip


I'm starting to see a distinct stock market-centric view in your posts
now. While I'm talking about the actual business of these companies.
Probably explains our inability to figure each other out. As I said as
far as I'm concerned, the stock market isn't any indicator of economics
or business.


That's your theory, and you're welcome to it. Corporate executives
these days pay attention to Wall Street, and to institutional
investors who could swing large blocs of votes at shareholders
meetings. Stock market performance is one summary measure of what
those institutional investors think.

You posted an item about regulatory action against Intel in Japan.
That's neat. How important is it? I have no basis for judging, so I
do what everybody else does: I look that the stock price. When
something really dramatic and material happens to a stock, the effects
are usually evident in the stock price. If it's not, then what
happened probably isn't that dramatic and material.

BTW, that definition of Efficient Market Theory is down below. It
sounds like a theory in the truest sense of the word, an academic
construct. It's an idealization that stock markets exactly reflect
economics, and economics are reflected in stock markets. Nothing can be
further from the truth here. Stock markets are subject to manipulation
by very rich players who are not interested in transmitting information
efficiently.


snip

Accurate insight into a market inefficiency is an opportunity to make
money. According to efficient market theory, it's the only
opportunity to make money. That's why I invited you to stop wasting
your apparent certainty about the importance of this particular
situation and put some money into the market. You could buy AMD or
short Intel. Manipulation only works short term, if it works at all.
Fundamentals always win over the long haul (with an appropriately
flexible definition of "fundamental").

The circumstances are this: Intel believes its business practices are
legal. AMD believes otherwise. Both are presumably reading the same
law. That means there is a difference in interpretation of the law.
The two companies could agree as to specific interpretation of the
law
with respect to specific business practices. _Then_ if Intel
continued
with practices it has agreed are illegal, a lawsuit for AMD would be
a
cake walk.

Well of course there's a difference in interpretation of the law. How
often does an accused criminal ever admit that they are guilty? There's
never any end of excuses.

And equally, the accuser strongly believes that they are in the right.
That's why the legal system has judges to sort these interpretations
out.

Most such disagreements are worked out without going to trial.

Why not just sue Intel now? No guarantee that AMD will prevail, even
with a judgment from Japan. Relief, if any, would be far into the
future. A carefully-drafted agreement, which need not be illegal,
could give AMD the level playing it wants sooner rather than later.

Why is there no guarantee that AMD will prevail after a judgement from
Japan? A guilty finding in a criminal case can be used in a civil case
as irrefutable evidence.

It amounts to a finding of fact. Nothing more. You think Japanese
regulators are going to uncover enough evidence to support huge
damages without further litigation? I think it unlikely and there is
no evidence the markets disagree.

In the meantime, Intel cannot make any further contracts within that
jurisdiction that restrict AMD from doing business.

If they are enjoined by a regulator from doing so, they are enjoined
from doing so, but not as the result of litigation by AMD. Again, if
the markets expected significant action, we'd see it in trading on
Wall Street. Apparently, the judgment of the market is that it's no
big deal. You are free to disagree by laying your own bet.

If even a substantial fraction of issues just between corporations
that could be litigated actually were litigated, our courts would be
even more jammed than they are. If you are in a situation that could
lead to litigation and your attorney does not advise you to try to
find a settlement without litigating, find another attorney. That's
good advice in the US. Maybe things are different in Canada.

RM

George Macdonald wrote:
I mean the supposed "success" of Centrino as a marketing exercise. IMO
people, and I'm including myself here of course, don't go out to buy and
say: "I gotta have one of them Centrino jobs"... unless maybe they're too
stupid to own a computer in the first place. Features are what sell a
system; in the case of Centrino, one of the most important features, given
that its performance is satisfactory, is the power management & battery
life which is mainly down to the Pentium M and its chipset; the NIC is a
throwaway which doesn't matter. In fact given the choice I'd avoid an
Intel-based NIC for just about any alternative.


AMD Turion will have to match the integration of Centrino in one
respect: power management. With the CPU able to send signals to the
chipset to conserve power. Easy (relatively) with one manufacturer for
both CPU & chipset, a bit harder when they're made by different people.
AMD is going to certify certain chipsets with Turion, likely this
feature is going to be required for certification.

Yousuf Khan

On Wed, 16 Mar 2005 23:07:00 GMT, Rob Stow
wrote:

Robert Myers wrote:


You know how I hate to be tedious, but the going word is that (say) an
800Mhz P3 is all anybody would ever need. I suspect that VIA will come
up to that standard soon. Are you saying China never will (without
seizing Taiwan, of course) or that an 800Mhz P3 is inadequate to do
Chinese text?

I know a family of Hong Kong escapees that last year came to
Saskatchewan from Vancouver. They have 6 computers: a
workstation for the father to work on, a good gaming rig for the
kids, and four cheap "homework" boxes for the kids that the
father built himself. Those four have a 512 MB PC133 DIMM and an
866 MHz C3 ( fanless !) plugged into used Socket 370 motherboards
that I gave him.

They find those C3 machines to be quite adequate with Linux for
tasks like word processing, e-mailing, and web browsing - all in
Chinese. For school work the kids also boot into W2K (English).

Maybe the key word is Linux. Or maybe the boxes George has seen in
action have become heavily encumbered with bloatware.

The ratio of hype-to-reality in Via's marketing is pretty amazing, as
their processors really are uncompetitive, but it seems as if they
would do well enough to satisfy users in undemanding applications:

http://www.digit-life.com/articles2/...-nehemiah.html

RM

Robert Myers wrote:
You posted an item about regulatory action against Intel in Japan.
That's neat. How important is it? I have no basis for judging, so I
do what everybody else does: I look that the stock price. When
something really dramatic and material happens to a stock, the
effects
are usually evident in the stock price. If it's not, then what
happened probably isn't that dramatic and material.

I've seen very little affect AMD's stock price, it has no streaks of
dramatism at all. Companies like Rambus spike up or down based on court
rulings, but then Rambus' main business is litigation.

For example, the introduction of Hammer and Intel's problems with
manufacturing were mainly evident to us here on these newsgroups long
before AMD's institutional investors even noticed it. That may have
resulted in a long slow outperforming of the sector by AMD, but there
was no spike up, just a long steady climb.

Well of course there's a difference in interpretation of the law.
How
often does an accused criminal ever admit that they are guilty?
There's
never any end of excuses.

And equally, the accuser strongly believes that they are in the
right.
That's why the legal system has judges to sort these interpretations
out.

Most such disagreements are worked out without going to trial.

Whatever.


Why not just sue Intel now? No guarantee that AMD will prevail,
even
with a judgment from Japan. Relief, if any, would be far into the
future. A carefully-drafted agreement, which need not be illegal,
could give AMD the level playing it wants sooner rather than
later.

Why is there no guarantee that AMD will prevail after a judgement
from
Japan? A guilty finding in a criminal case can be used in a civil
case
as irrefutable evidence.

It amounts to a finding of fact. Nothing more. You think Japanese
regulators are going to uncover enough evidence to support huge
damages without further litigation? I think it unlikely and there is
no evidence the markets disagree.

I don't know what the criteria to support "huge damages" are, but yes,
just this finding alone is enough to support some form of damages. It's
upto AMD to find out more about how long this has been happening, but
there won't be any doubt about whether this happened or not.

In the meantime, Intel cannot make any further contracts within that
jurisdiction that restrict AMD from doing business.

If they are enjoined by a regulator from doing so, they are enjoined
from doing so, but not as the result of litigation by AMD. Again, if
the markets expected significant action, we'd see it in trading on
Wall Street. Apparently, the judgment of the market is that it's no
big deal. You are free to disagree by laying your own bet.

These are perfect examples of stuff Wall Street normally misses and
then they scramble later to make up for it. WS will also require at
least a trial to begin before it starts reacting.

If even a substantial fraction of issues just between corporations
that could be litigated actually were litigated, our courts would be
even more jammed than they are. If you are in a situation that could
lead to litigation and your attorney does not advise you to try to
find a settlement without litigating, find another attorney. That's
good advice in the US. Maybe things are different in Canada.

Litigation also involves out of court settlements.

Yousuf Khan

On 16 Mar 2005 12:53:47 -0800, "Robert Myers"
wrote:

George Macdonald wrote:
On Tue, 15 Mar 2005 05:17:25 -0500, Robert Myers

wrote:

On Mon, 14 Mar 2005 17:02:19 -0500, George Macdonald

snip

I'm sure VIA has found a niche in the developing economies but as
for
China, I'd think their processors would lack the oomph required to
do
Chinese caharacter sets. I've seen this in action and even a
"text"
document drags the CPU down horribly... not sure how it all works
out.

Taiwan and Japan seem to cope somehow. Back to the cost of capital
issue, building a microprocessor industry doesn't seem like a wise
investment for China, except to satisfy their miliary ambitions,
which
they do have.

I was talking about the relative power of current VIA CPUs and their
ability to handle the job... which drags an Athlon XP 2500+ down
pretty
badly. IOW I don't see how VIA satisfies the reqts for even the
basics of
word processing, browsing etc. in Chinese chgaracters.


You know how I hate to be tedious, but the going word is that (say) an
800Mhz P3 is all anybody would ever need. I suspect that VIA will come
up to that standard soon. Are you saying China never will (without
seizing Taiwan, of course) or that an 800Mhz P3 is inadequate to do
Chinese text?

As far as PRChina success with product, I'm sure they can develop the
technology - I serously doubt that their system can offer the various
conduits to market that the U.S. or even Europe can take advantage of. As
an example of a country with leading edge technology which was allowed to
wither/rot on the bough, for a multitude of reasons, the U.K. auto industry
is a (stereo)typical case and that's a quasi capitalist system.

If the latter...I have a hard time imagining how that could be so. I
suspect poor programming, but I wouldn't mind being educated. I mean
*are* there tasks (other than computer games and bad programming) that
an 800 MHz PIII can't currently handle, and is this a real example?

You need to see Powerword or Foxmail doing scrolling of Chinese
characters.;-)

--
Rgds, George Macdonald

On Thu, 17 Mar 2005 01:53:00 -0500, Yousuf Khan wrote:

George Macdonald wrote:
It's my understanding that the military was *very* interested in using 808x
CPUs, to the extent that some of the licensees, possibly Harris IIRC, also
specialized in making "hardened" versions.

They may have become interested in using it, *after* IBM started using
them in their PCs. The IBM PC was pretty much an overnight success, and
it propelled its processor into the spotlight like it was never one
before. Prior to that, I would gather that most military projects may
have centred around Motorola 68xxx processors. Let's face it the Intel
8086 was generally considered a sad-sack processor.

Everybody loved the 68000 but nobody used it - when you boil it down,
performance-wise it was a dog. Such a beautiful thing for an orthogonal
CISC purist but using the orthogonality killed the performance; VAX had had
similar problems... you'd think people would learn. The 68000 also didn't
have the inertia built up from the 8080/8085 in micro-controller apps:
MultiBus, STB Bus, S100 Bus etc. VersaBus and then VMEBus didn't tickle
the right price/performance sector.

You'd have to go a long ways back to find any substantial volumes of
notebooks with non-Intel chipsets though... my point being that right now,
Centrino is not making sales of chipsets that would not otherwise be made.

Wasn't ATI making an Intel P3 and later P4 laptop integrated-graphics
chipset?

Not sure of your timeframe but I certainly never saw it... unless you mean
relatively recent efforts... which OEMs seem to be ignoring(?)... AFAICT.

Yeah, there was a study done by AMD to find out if it should also adopt
platformization too. They found that most people really couldn't care
less if the machine was Centrino or not, all they cared about was the
laptop's own brandname. The only subsets that did care about Centrino
were techies, and secondly airport travellers who are bombarded with
Centrino ads in airports.


AMD's "results" don't make sense to me: it's the techies who know that
Centrino doesn't mean anything... maybe self-proclaimed wannabe techies
don't know?:-)

No, I'm sure most techies know that the Centrino is not really a
processor, but a platform. But that's not really important, the techies
are more impressed with the power savings.

Even your average road warrior appreciates power savings for whiling away
the hours on long flights.:-)

Actually, as the Japanese authorities said, one Japanese company was
forced to limit marketshare of non-Intel processors to these levels:
90% Intel in Japan, 70% Intel in Europe, and 80% in the rest of the
world. So assuming similar agreements with other Japanese makers and
given that Europe had the lowest marketshare requirements, it must have
been much easier to find AMD notebooks over there.


I wouldn't call it *much* easier in Europe - one extra supplier in
Fujitsu-Siemens and even there they were playing the system down as a
"home" job.


This all should be changing relatively soon, after the JFTC gets through
with Intel. Japanese companies will be immune from Intel exclusivity
contracts from this point forward, because the JFTC will be scrutinizing
each contract individually. With their worldwide sales channels, these
Japanese companies can sell any mix of processors that they like, even
in the US. With so many Japanese brands carrying a large proportion of
AMD processors, the domestic manufacturers might have to respond in kind.

Let's hope that there will be some sanity and balance and that IT "decision
maker" types will take off the blinkers... and stop listening to paid
shills like RCK. It's a "sair fecht".:-)

--
Rgds, George Macdonald

In article , fammacd=!
says...
On Mon, 14 Mar 2005 21:57:48 -0500, Yousuf Khan wrote:

George Macdonald wrote:
The importance of X-licence isn't new. For many years,
nobody would design something without a second-source of
all parts. Why has Dell (et al) never learned?


Well so far Dell is not suffering... are the others so incompetent?

Yeah, the second-source model is a relic of ancient times, when silicon
output was a relative trickle compared to now. The mass production era
of IC production was barely underway when IBM decided that Intel needed
an AMD second source. Dell is operating from an era when IC's were
already commodity and their manufacturing process had become fairly well
understood.

I thought it was the U.S. military that insisted on the 2nd source for
x86s?

No, it was IBM. Remember, Intel was a teensy company in the early '80s
and came perilously close to the abyss. IBM was forced to invest
heavily in Intel to keep that from happening. IBM couldn't afford such
risks in any supplier (there were rules regarding the percentage of
business a company could have with IBM; IIRC 30%), so forced second
sources, of which IBM itself was later one. These rules/actions
weren't only true for Intel and the 8086. It wasn't unusual for
companies to be forced into second-source agreements to sell into IBM.
One of the first questions asked of any supplier was "who is your
second source?"

--
Keith

On 17 Mar 2005 08:28:27 -0800, "YKhan" wrote:

Robert Myers wrote:
You posted an item about regulatory action against Intel in Japan.
That's neat. How important is it? I have no basis for judging, so I
do what everybody else does: I look that the stock price. When
something really dramatic and material happens to a stock, the
effects
are usually evident in the stock price. If it's not, then what
happened probably isn't that dramatic and material.

I've seen very little affect AMD's stock price, it has no streaks of
dramatism at all. Companies like Rambus spike up or down based on court
rulings, but then Rambus' main business is litigation.

For example, the introduction of Hammer and Intel's problems with
manufacturing were mainly evident to us here on these newsgroups long
before AMD's institutional investors even noticed it. That may have
resulted in a long slow outperforming of the sector by AMD, but there
was no spike up, just a long steady climb.


And it's possible that those who read and post here might understand
better than markets in general what that kind of news means and what
kind of impact it might have on the business...

In contrast to the likelihood that anyone here would be able to
outguess the markets with respect to news that is purely business,
with no particular dependency on specialized technical knowledge for
interpretation.

I might add, even in the case of technical news, outguessing the
markets is possible but unlikely (on the average...that doesn't mean
individuals can't be very lucky or very unlucky in individual
transactions). Markets are pretty smart.

Rambus shows bigger price swings than AMD because it has smaller
market capitalization (1.34 billion vs. 6.37 billion). As it is, the
market cap even of AMD is tiny compared to Intel (146.46 billion), so
the fact that there was not a twitch from AMD share prices (or none
that is easily interpreted) over this particular news tells me you are
pretty far out there if you think this news is a big deal...certainly
not in a way that is going to impact Intel in any serious way.

snip

In the meantime, Intel cannot make any further contracts within that
jurisdiction that restrict AMD from doing business.

If they are enjoined by a regulator from doing so, they are enjoined
from doing so, but not as the result of litigation by AMD. Again, if
the markets expected significant action, we'd see it in trading on
Wall Street. Apparently, the judgment of the market is that it's no
big deal. You are free to disagree by laying your own bet.

These are perfect examples of stuff Wall Street normally misses and
then they scramble later to make up for it. WS will also require at
least a trial to begin before it starts reacting.

It just is not plausible that a technical person reading the financial
pages is going to be successful outguessing markets in a case like
this, except by pure luck.

If even a substantial fraction of issues just between corporations
that could be litigated actually were litigated, our courts would be
even more jammed than they are. If you are in a situation that could
lead to litigation and your attorney does not advise you to try to
find a settlement without litigating, find another attorney. That's
good advice in the US. Maybe things are different in Canada.

Litigation also involves out of court settlements.

Each step AMD takes raises the stakes, and it would be taking on a
corporation with very deep pockets. The easiest settlement to get is
one that doesn't involve money changing hands. The instant you start
paying lawyers to litigate, the first money goes into the pockets of
the lawyers.

AMD might file suit, anyway? Of course they might. How would I know?
I understand AMD less well than I understand Intel, which is very big,
very rich, very arrogant, and very stubborn. All the things that make
you dislike Intel. AMD might take them on, anyway? How would I know?
Were it me, I'd avoid it if I could.

RM

Robert Myers wrote:
And it's possible that those who read and post here might understand
better than markets in general what that kind of news means and what
kind of impact it might have on the business...

In contrast to the likelihood that anyone here would be able to
outguess the markets with respect to news that is purely business,
with no particular dependency on specialized technical knowledge for
interpretation.

I might add, even in the case of technical news, outguessing the
markets is possible but unlikely (on the average...that doesn't mean
individuals can't be very lucky or very unlucky in individual
transactions). Markets are pretty smart.

I wouldn't say that the stock markets are very smart. They're just
flocks of sheep, going wherever the shepherd leads them.

I did take my stab at stock market investing back in the Dotcom days,
like everyone else. Back then, the technological news was that AMD had
decided to start using copper interconnects in their process
technology, and that Intel was nowhere close to adopting it -- it would
take them at least six months or more to catch up. So I bought AMD as
soon as possible, armed with my technical knowledge, thinking once that
news was known, it was just going to be impossible to buy it. Well I
bought it, and it did go up, but there was no spike up because of the
news, it just went up with the sector like everybody else. Neither good
news nor bad news really affected its price severely. AMD did have at
least a six month lead on Intel in that field as I predicted, and it
did make some healthy money because of it too. But Wall Street doesn't
understand copper interconnects, nor SOI, nor 180nm to 130nm
transitions, or any of the other technological news that has come out
about it over the years.

I've decided the only knowledge that matters when playing the stock
market is not technical knowledge, but psychological knowledge.


Rambus shows bigger price swings than AMD because it has smaller
market capitalization (1.34 billion vs. 6.37 billion). As it is, the
market cap even of AMD is tiny compared to Intel (146.46 billion), so
the fact that there was not a twitch from AMD share prices (or none
that is easily interpreted) over this particular news tells me you
are
pretty far out there if you think this news is a big deal...certainly
not in a way that is going to impact Intel in any serious way.

I wouldn't even say that market cap has got anything to do with it.
Some stocks are just more institutionally-driven, while others are
driven by individuals. Institutional investors barely even look at the
fundamentals of a company, they just drive it up and down whit the
sector. That's AMD.

Each step AMD takes raises the stakes, and it would be taking on a
corporation with very deep pockets. The easiest settlement to get is
one that doesn't involve money changing hands. The instant you start
paying lawyers to litigate, the first money goes into the pockets of
the lawyers.

In this case, both corporations are mult-billion dollar corps. I don't
think AMD is too worried about legal costs anymore than Intel is. The
deep pockets argument is only valid when we talk about individual
people taking on a corporation.

AMD might file suit, anyway? Of course they might. How would I
know?
I understand AMD less well than I understand Intel, which is very
big,
very rich, very arrogant, and very stubborn. All the things that
make
you dislike Intel. AMD might take them on, anyway? How would I
know?
Were it me, I'd avoid it if I could.

AMD and Intel have taken each other on quite often in the past. Neither
went bankrup because of it.

Yousuf Khan

On 17 Mar 2005 13:26:44 -0800, "YKhan" wrote:

Robert Myers wrote:
And it's possible that those who read and post here might understand
better than markets in general what that kind of news means and what
kind of impact it might have on the business...

In contrast to the likelihood that anyone here would be able to
outguess the markets with respect to news that is purely business,
with no particular dependency on specialized technical knowledge for
interpretation.

I might add, even in the case of technical news, outguessing the
markets is possible but unlikely (on the average...that doesn't mean
individuals can't be very lucky or very unlucky in individual
transactions). Markets are pretty smart.

I wouldn't say that the stock markets are very smart. They're just
flocks of sheep, going wherever the shepherd leads them.

I did take my stab at stock market investing back in the Dotcom days,
like everyone else. Back then, the technological news was that AMD had
decided to start using copper interconnects in their process
technology, and that Intel was nowhere close to adopting it -- it would
take them at least six months or more to catch up. So I bought AMD as
soon as possible, armed with my technical knowledge, thinking once that
news was known, it was just going to be impossible to buy it. Well I
bought it, and it did go up, but there was no spike up because of the
news, it just went up with the sector like everybody else. Neither good
news nor bad news really affected its price severely. AMD did have at
least a six month lead on Intel in that field as I predicted, and it
did make some healthy money because of it too. But Wall Street doesn't
understand copper interconnects, nor SOI, nor 180nm to 130nm
transitions, or any of the other technological news that has come out
about it over the years.

I've decided the only knowledge that matters when playing the stock
market is not technical knowledge, but psychological knowledge.


Rambus shows bigger price swings than AMD because it has smaller
market capitalization (1.34 billion vs. 6.37 billion). As it is, the
market cap even of AMD is tiny compared to Intel (146.46 billion), so
the fact that there was not a twitch from AMD share prices (or none
that is easily interpreted) over this particular news tells me you
are
pretty far out there if you think this news is a big deal...certainly
not in a way that is going to impact Intel in any serious way.

I wouldn't even say that market cap has got anything to do with it.
Some stocks are just more institutionally-driven, while others are
driven by individuals. Institutional investors barely even look at the
fundamentals of a company, they just drive it up and down whit the
sector. That's AMD.


Yes, there is an aspect of psychology to the stock market, and the
stock market does wildly irrational things, like drive the tech sector
up to unreasonable and unsustainable levels before the internet bubble
crashed.

Securities markets measure expectations. There is no way to separate
expectations about fundamentals (how the company is going to perform
financially) from expectations about expectations (how other investors
are going to behave). I've relied on the stock price as an accurate
measure of expectations about fundamentals. You're arguing that stock
prices have nothing to do with fundamentals. I'll argue that if your
position were accurate, capital markets would be useless and
capitalism broken. And I'll stick with my position that markets
aren't expecting anything very exciting to happen as a result of
regulatory action against Intel in Japan and that the markets are more
competent than you or I to make that judgment.

RM