Opinion

Will Intel have the last laugh?

The embarrassing public court cases facing Dell and Intel will come as scant consolation to the hundreds of national system builders whose demise was sped up by the alliance between the two firms.

But they might provoke a wry smile.

While Intel may have given AMD $1.25bn worth of reasons to get over its anti-competitive actions, the European Commission is waiting for Intel to appeal the guilty verdict on its monopolistic behaviour.

There are also developments on the other side of the pond.

Dell has recently set aside a $100m reserve to cover any potential settlements with the SEC over a civil injunctive action related to historical accounting practises and its dealings with Intel.

However, in another outstanding case brought about in November, Andrew Cuomo, New York attorney general filed an anti-trust lawsuit against Intel and Dell which alleged the PC maker had delayed buying chips from AMD in return for rebates.

The lawsuit has revealed emails sent between Intel boss Paul Otellini and Michael Dell, in which the Texan complained his company lost sales to rivals that were using AMD processors.

However, Otellini was quick to remind him that Intel deposited more than $1bn a year in Dell's bank account which was "more than sufficient to compensate for the competitive issues."

Latterly in the suit, it emerged that Otellini sent another message to a colleague referring to Dell as "the best friend money can buy."

Intel realised the uncontrollable monster it had created in Dell too late in the day and as UK nationals including Elonex, Tiny, Time and Compusys sank, Intel's reliance on the whims of tier one brands rose.

Who is smiling now, Intel?

Drop me a line, on the QT, off-record, very much hush hush.

paul.kunert@rbi.co.uk

This was first published in June 2010

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