NVIDIA claims Intel Atom pricing unfair for ION

Subject: Processors | May 20, 2009 - 10:06 AM |
Tagged:

Apparently AMD isn't the only who thinks that Intel is playing dirty in the world of technology.  Just a few days after Intel was hit with the largest fine in history from the EU For anti-competitive practices, NVIDIA's CEO Jen-Hsun Huang is telling the world that Intel is pulling the same stunts with them.

 

Nvidia makes graphics chips that pair with Intel's low-powered Atom in lower-priced netbook computers. He said Intel sells an Atom chip by itself for $45, but sells a three-chip set for $25 to lure business away.
"That seems pretty unfair," he said. "We ought to be able to compete and serve that market."

 

 The difference here is that NVIDIA has indicated that it will NOT pursue any sort of legal action against the company but has instead decided to take the fight to the media and to its partners.  The obvious hope is that pressure from the community itself will be enough for Intel to see the error in its ways and fix the problem on its own before any legal forces are involved.

Intel responded with this:

 

"We compete fairly. We do not force bundles on any computer makers and customers can purchase Atom individually or as part of the bundle," said Bill Calder, a spokesman for Intel. "If you want to purchase the chip set, obviously there is better pricing."

 

In the truest letter of the law, they are correct; they aren't breaking any regulations that I am aware of.  However, simply by looking at it from a common sense point of view, there is NO WAY that they can justify selling the Atom CPU + chipset for 80% less than the CPU alone.  If Intel were simply offering the chipset for free with the Atom processor, that would seem more appropriate but Intel is essentially paying its customers $20 to NOT use alternative chipset technology with the Atom.


Intel's Atom 330 processor

From a system builders point of view then, they would have to pay $20 additional for the Atom processor plus the $50 or so for NVIDIA ION chipset in order to build a system with ION technology.  That essentially ads a $70 cost to a product line that typically will sell for the $299-$599 segment - a very significant portion.  It is no wonder then that partners have been less than excited to promote any ION designs. 


Intel's Atom 230 CPU (right) with NVIDIA's ION GPU (left)

In my experience with the Atom processor (here and here) and the ION platform (here and here), there is little doubt that a system using NVIDIA's ION graphics is going to be a better performing system than one using the 945G option from Intel.  If in fact these tactics by Intel are keeping the ION from reach customers then I hope someone does force Intel's hand, legally, on the issue.

NEW YORK (Reuters) - Jen-Hsun Huang, chief executive officer of graphics chip maker Nvidia, called Intel's chip pricing unfair but said his company will not seek antitrust action against the world's largest chip maker for now.

Nvidia makes graphics chips that pair with Intel's low-powered Atom in lower-priced netbook computers. He said Intel sells an Atom chip by itself for $45, but sells a three-chip set for $25 to lure business away.

"That seems pretty unfair," he said. "We ought to be able to compete and serve that market."

Last week, the European Commission fined Intel $1.06 billion euros and ordered it to change its business practices for competing illegally against Advanced Micro Devices.

Intel brushed off Huang's suggestion.

"We compete fairly. We do not force bundles on any computer makers and customers can purchase Atom individually or as part of the bundle," said Bill Calder, a spokesman for Intel. "If you want to purchase the chip set, obviously there is better pricing."

For now, Huang plans no legal action.

"I hope it doesn't come down to that," he said, adding: "We have to do whatever we have to do when the time comes. We really hope this company (Intel) will compete on a fair basis."

No comments posted yet.

Post new comment

The content of this field is kept private and will not be shown publicly.
  • Lines and paragraphs break automatically.
  • Allowed HTML tags: <a> <em> <strong> <cite> <code> <ul> <ol> <li> <dl> <dt> <dd> <blockquote><p><br>
  • Web page addresses and e-mail addresses turn into links automatically.

More information about formatting options

By submitting this form, you accept the Mollom privacy policy.