Intel has $55.9B record year, ships 46M tablets

[dahorns]

That's because the law, as it stands today, doesn't encompass or envison the computing industry holistically but that doesn't mean that they can't expand its scope. Intel doesn't operate in a multitude of markets, market segments, consumer segments, industry segments in isolation of each other.

I'm certain you have no idea what "law" is being violated. It is pointless to discuss some "law" that only exists in your mind. If you want to discuss legal specifics, cite a statute. I'll happily pull some case law and explain to why it doesn't apply to here.

I wonder how the LCD price fixing case was resolved, did the EU fine the defendants based on whether they fixed prices of LCD monitors, TV's or small screen items like a smartphone? The law, as I stated earlier doesn't take into account the semiconductor/MPU industry as a whole. What they're doing now is taking into account the components that sell in a given sector, say mobile, & not how the players operating (dominating) in multiple sector, say servers, of the (computing) industry are leveraging their clout (or money) to manipulate a certain subsection of this (computing) industry.

You understand that price fixing is the exact opposite of what we are talking about here? Price fixing laws are designed to protect consumers from artificially high prices agreed upon by an industry.

I rest my case.

So, generally in legal disputes, the party making accusations has the burden the proof. Absence of evidence is not evidence of absence, true. But it is also not evidence of existence. If you want to carry your burden, you need evidence.

And the fact that you can't even cite a law that has been violated is strong evidence that you have no idea what you are talking about. Realization of that fact will help you improve and educate yourself.

 

[Lonyo]

Selling anything below cost is illegal in my part of the world, probably anywhere else as well, or do you claim that Intel is not paying manufacturers additional money to sell Baytrail through their devices? You're arguing semantics here even though it's pretty evident to everyone what's going on.

Anti-dumping rules are usually applied only where there is varied pricing between jurisdictions.
Intel is subsidising people to buy their products in the same manner globally.

http://en.wikipedia.org/wiki/Dumping_(pricing_policy)

"A standard technical definition of dumping is the act of charging a lower price for the like goods in a foreign market than one charges for the same good in a domestic market for consumption in the home market of the exporter"

So the WTO rules don't apply, because Intel isn't discriminating in that manner. They are doing a wholesale policy of subsidising their product to get marketshare, which many people do, and it's not destroying a domestic market because it's only achieving price-parity with the competition. They are selling it below their cost, but they are doing that to sell it at the same cost as a competitor.

Sony and Microsoft aren't breaking the law by selling games consoles at a loss.
China and solar panels: http://www.reuters.com/article/2014/07/25/us-usa-trade-solar-idUSKBN0FU29D20140725

 

[R0H1T]

Take the well-substantiated idea that BT was originally designed for laptops, so the cost was way too high for the low-end tablets Intel needed to get a foothold in the tablet market. Even if they made a low-end SKU, no one would buy it because of the additional component (not the silicon, which is simply priced competitively; it's actually laughable for people to suggest Intel's paying OEMs to use their chips because those same anti-Intel folks also say in the same sentence that Intel's this monopolistic company with ultra high margins, which couldn't be possible if they did what those people claim) costs. This claim is based on reality.

Then why sell netbook parts (wasn't it low end netbook anyway?) in a tablet ?

Then you ask how Intel was indeed able to sell 46M tablets, if BT wasn't compelling for OEMs. Simply because they, like they explained in great detail, paid the component cost delta themselves.

This is like saying AMD should sell the 295x2 below cost by subsidizing the price of the hybrid cooler, cause you know it's a great card just runs hot!

If we now apply Occam's razor, your idea does not win. Because if your idea was really true, then how do you explain that Intel talked so much about reducing the BOM disadvantage throughout 2014. You can't. If your idea can't explain reality (which, btw, is why religion's ideas are so stupid), it's simply plain false.

So what does that tell you? That they were selling an inferior product by offsetting other component costs or do you have any other theory since any device is sum of parts & only a single component cannot & will not define it!

This is a good lesson in logic. Using your intelligence (if you have that, but there's hope) instead of your emotions to come up with the right, factual conclusions.

I think you should keep your twisted sense of logic to yourself that's be better for me at least.

I hope you learned anything, because I'm not going to spend any more time on this topic (which will become utterly irrelevant this year anyway, so we'll see if Intel suddenly stops selling tablet chips like your model of 'reality' predicts -- and by the way, have you every looked at benchmarks of Bay Trail; it's an amazing chip for even $300 devices, so never mind sub $100 ones) or learning you how to reason, certainly if you can't (or refuse to) face reality.

It's an amazing chip that requires additional input (i.e money) to sell in a highly competitive mobile market, it isn't class leading or the absolute best by any stretch of imagination.

In any case, on page 37 you'll find the answers to your questions: http://intelstudios.edgesuite.net/im/2014/pdf/2014_Intel_IM_Smith.pdf.

Alright tell me this will Intel stop contra revenues in 2015 completely? If not then why don't you keep your logic & any (fair) sense of equity in a safe & remove it when the time comes?

 

[AtenRa]

Yup, but the SoC is intimately tied to the platform, no?

You can't buy a Bay Trail chip without needing to build around it the rest of the platform.

So if Intel is selling a $10 chip and OEMs need to pay $20 extra relative to a competing $10 ARM chip to implement the chip, Intel needs to cough up $20 in contra-revenue support. That would lead to negative revenue of $10.

That means that the BOM delta is higher than the SOC itself

 

[AtenRa]

Sony and Microsoft aren't breaking the law by selling games consoles at a loss.

Well yes but in that case BOTH are selling bellow cost. In the Mobile market it was ONLY Intel with its Contra-Revenue.

 

[Arachnotronic]

That means that the BOM delta is higher than the SOC itself

Right, that's what I'm saying

 

[AtenRa]

Alright tell me this will Intel stop contra revenues in 2015 completely?

Actually they are forced to stop, they will have a substantial Tablet market share starting of 2015 unlike one year ago. They are not a small player any more, they are in the top 5 now(perhaps even second place).

 

[Arachnotronic]

Alright tell me this will Intel stop contra revenues in 2015 completely? If not then why don't you keep your logic & any (fair) sense of equity in a safe & remove it when the time comes?

No, any designs sold next year using Bay Trail-T will suffer contra-revenue. I am not sure about Cherry Trail, but we know SoFIA will not require contra-revenue.

Intel said quite plainly that gross margin positive for mobile doesn't happen until 1H 2016, so there's going to be contra-revenue as a result of these older parts until that time. The contra-revenue comes down, though.

 

[elemein]

Then why sell netbook parts (wasn't it low end netbook anyway?) in a tablet ?
This is like saying AMD should sell the 295x2 below cost by subsidizing the price of the hybrid cooler, cause you know it's a great card just runs hot!
So what does that tell you? That they were selling an inferior product by offsetting other component costs or do you have any other theory since any device is sum of parts & only a single component cannot & will not define it!
I think you should keep your twisted sense of logic to yourself that's be better for me at least.
It's an amazing chip that requires additional input (i.e money) to sell in a highly competitive mobile market, it isn't class leading or the absolute best by any stretch of imagination.
Alright tell me this will Intel stop contra revenues in 2015 completely? If not then why don't you keep your logic & any (fair) sense of equity in a safe & remove it when the time comes?

On mobile so this is a bit messy, sorry; but I dont think you two are at much of a conflict as you think

First; about the AMD 295x2: they would IF they had to go from a 0% market share in the GPU market to 20%. Thats what Intel did in the tab market. Thats what you have to do if youre late on adopting a market. You know what they say; can't show up late to a party empty handed, and Intel is coming late to the party but they aren't coming empty handed. They're paying for the platform costs and OEMs chose it because the chip is pretty much the top performing chip in the market SAVE for Apple's. I dont think the gentleman you were arguing with ever said it was "the best period."

No point making a conflict where there ain't one

Sorry for the post being messy. On mobile. Qualcomm if youre curious

 

[AtenRa]

Right, that's what I'm saying

You know what that means ??? It means ATOM BayTrail was not economically competitive against ARM SoCs. They just spend 4-5B in one year to BUY a higher tablet market share starting 2015.

Now they will have to fight at the same ground with the rest of the industry. Lets see if they will manage to even sustain that market share first without the contra revenue. Q1 2015 results will show if they will be able to compete this year or not.

 

[R0H1T]

And the fact that you can't even cite a law that has been violated is strong evidence that you have no idea what you are talking about. Realization of that fact will help you improve and educate yourself.

Because laws cannot be applied retroactively or that there;s no law covering such practices, as contra revenue? It's amazing how each & every one of you glossed over this supposedly (il)legal, moral, ethical debate & are asking me for evidence when you know very well that Intel's legal defense team has already devised ways around this.

You sure that's the only thing I missed? Let's say the likes of Mediatek approach some court & settle out of court with Intel, like AMD did last decade, exonerating them of any wrongdoing. Now in your book it was perfectly legal what Intel did a decade ago & what they're doing right now but I have no qualms admitting it's the same faces on both sides of the coin all over again.

Slavery was legal in many parts of the world at one point in time, that didn't make it right did it? If the law is structured, in present times, as such so as not to punish an individual (or organisation) for acts falling under such grey areas that shouldn't stop someone, like me, from pointing out the obvious flaws in it.

 

[frozentundra123456]

This thread has gone beyond the absurd. I am sure a few of the posters here know more about corporate and anti trust law than the legal staffs of AMD, intel, and all the ARM chipmakers and government regulators combined. I for one am really glad they chose to enlighten us.

 

[tential]

Because laws cannot be applied retroactively or that there;s no law covering such practices, as contra revenue? It's amazing how each & every one of you glossed over this supposedly (il)legal, moral, ethical debate & are asking me for evidence when you know very well that Intel's legal defense team has already devised ways around this.

You sure that's the only thing I missed? Let's say the likes of Mediatek approach some court & settle out of court with Intel, like AMD did last decade, exonerating them of any wrongdoing. Now in your book it was perfectly legal what Intel did a decade ago & what they're doing right now but I have no qualms admitting it's the same faces on both sides of the coin all over again.

The reason this practice has been acceptable has been described to you many times in this thread. The multitudes of examples given to you have been astounding and have even helped clear my own understanding of the practice.

The fact that you've chosen to simply ignore the information and instead just cry foul is worrisome at worst, and shows that you really should try and understand what people are saying.

 

[AtenRa]

Im sure everyone in the industry are looking very closely this Contra Revenue Intel thing. If and when they will feel they have something against it we will hear about it.

 

[Lonyo]

Well yes but in that case BOTH are selling bellow cost. In the Mobile market it was ONLY Intel with its Contra-Revenue.

Nintendo aren't. So therefore Sony and MS should be persecuted and prosecuted because Nintendo don't sell at a loss!
Also VW, because the Bugatti Veyron was sold below cost.
And Fiat.
http://www.factfiend.com/bugatti-veyron-car-loses-money-every-time-sold/
http://jalopnik.com/sergio-marchionne-doesnt-want-you-to-buy-a-fiat-500e-1579578914

Fact: Lots of people sell things at a loss. Doesn't make it illegal.
Your local shops probably sell products at a loss too, they are called "loss leaders" to entice you to go to the store, it gets them marketshare.
Imagine if Intel was doing something similar.

http://en.wikipedia.org/wiki/Loss_leader

You could argue it was predatory pricing, if it was.
http://en.wikipedia.org/wiki/Predatory_pricing
But it's not, because it's designed to make Intel price competitive, but not to kill ARM by making Intel price advantageous.

Lets put it this way: Qualcomm is the one under investigation for antitrust issues in this market, not Intel.

 

[R0H1T]

The reason this practice has been acceptable has been described to you many times in this thread. The multitudes of examples given to you have been astounding and have even helped clear my own understanding of the practice.

The fact that you've chosen to simply ignore the information and instead just cry foul is worrisome at worst, and shows that you really should try and understand what people are saying.

The practice is acceptable because it apparently doesn't hurt anyone except Intel's direct competitors, the fact that it's legal is in fact a tragedy. The most important conclusion that I've drawn from this thread, & it;s participants, is that you're free to do anything, anyhow, anywhere & anytime so long as it's legal. If its fills your pocket great & mine even better, but it does something bad to someone out there & that's just indefensible that's all there's to it.

 

[Lonyo]

The practice is acceptable because it apparently doesn't hurt anyone except Intel's direct competitors, the fact that it's legal is in fact a tragedy. The most important conclusion that I've drawn from this thread, & it;s participants, is that you're free to do anything, anyhow, anywhere & anytime so long as it's legal. If its fills your pocket great & mine even better, but it does something bad to someone out there & that's just indefensible that's all there's to it.

So if they waited 2 years and then decided to sell the same product at the same price with no contra-revenue, then that would be fine?
Because then they sort out their chips to not have those additional component costs by integrating models etc, they won't have a contra-revenue setup anymore because they will be price competitive.
Suddenly the competition is OK because their product is reasonable?
Or should they have sold products at a loss and ignored the whole contra-revenue thing because then it would be the exact same situation.
Or should they just not enter a market at all if their product isn't quite competitive right off the bat?

Imagine if instead of "contra revenue", they just sold at below cost of production and R&D, which many companies do when they are starting up. Does that still make them bad?

Basically you are saying that companies should only be able to try and enter a new market if they can do so profitably right from the start and shouldn't be able to run at a loss when trying to break into a market.
THAT is anti-competitive. What Intel is doing is standard operating procedure for someone trying to enter a new market. Get a load of cash, make massive losses for a few years until you have scaled up and obtained marketshare, and then you can start being profitable.
You have no sense of how business and breaking into new markets typically works, and are focused on stupid wording and phrasing of what Intel are doing, rather than the actual facts, which are that they are doing what 90% of companies do when entering a new market, they have just put some window dressing on it that has you all riled up for no reason.

If they decided to just sell chips for $20 less and scrap contra-revenue, so that they make a loss on every sale, would you be bitching about it?
Do you bitch about other companies outside the CPU industry who do the exact same thing? For example, did you bitch about Sony subsidising the PS3 when that came out to try and promote Blu-Ray and just generally get marketshare?

Your idea is that no one should be able to operate at a loss because that's anti competitive. Which is dumb.
Also we'd better shut down AMD because they are loss-making, which is anti competitive against Intel and nVidia. AMD shouldn't be allowed to sell products at a loss because it's anti competitive. Lets bring charges against AMD.

 

[elemein]

The practice is acceptable because it apparently doesn't hurt anyone except Intel's direct competitors, the fact that it's legal is in fact a tragedy. The most important conclusion that I've drawn from this thread, & it;s participants, is that you're free to do anything, anyhow, anywhere & anytime so long as it's legal. If its fills your pocket great & mine even better, but it does something bad to someone out there & that's just indefensible that's all there's to it.

Its a proverb in many countries that "alls fair in love and war." And a proverb in even more countries that "business is war." Sometimes you just gotta give up on morality when it comes to business. Its an exception not a rule.

 

[ShintaiDK]

Thats the slide I was looking for with 15$.

 

[R0H1T]

So if they waited 2 years and then decided to sell the same product at the same price with no contra-revenue, then that would be fine?

They should sell their products at cost price or slightly below not absorb virtually the entire BoM, if it's good enough it will sell & if it's not then the market forces will take care of its future.

Your idea is that no one should be able to operate at a loss because that's anti competitive. Which is dumb.
Also we'd better shut down AMD because they are loss-making, which is anti competitive against Intel and nVidia. AMD shouldn't be allowed to sell products at a loss because it's anti competitive. Lets bring charges against AMD.

No, but anyone driving others out of business by buying their way into a market, any market or market segment for that matter, ought to be penalized accordingly.

Its a proverb in many countries that "alls fair in love and war." And a proverb in even more countries that "business is war." Sometimes you just gotta give up on morality when it comes to business. Its an exception not a rule.

Let's see where the contra revenue, or lack of it, leads to in 2015. I for one would like to see everyone's stand here, especially if it's gonna continue like it has in 2014.

I'm not in the business of judgement, I do however have extremely strong & sometimes polarizing views & I'll see to it that they're not expressed when they aren't needed & certainly not when they're ridiculed by equating them to religious beliefs; things in life aren't always black & white but to hide under the guise of grey isn't what I've grown up doing

 

[Abwx]

Thats the slide I was looking for with 15$.

Nowhere it is written that it s 15$, it could be 60$...exactly the difference between what a BT would cost if sold at normal price and the total actual cost per chip, 89$ according to intel..

 

[elemein]

They should sell their products at cost price or slightly below not absorb virtually the entire BoM, if it's good enough it will sell & if it's not then the market forces will take care of its future.
No, but anyone driving others out of business by buying their way into a market, any market or market segment for that matter, ought to be penalized accordingly.Let's see where the contra revenue, or lack of it, leads to in 2015. I for one would like to see everyone's stand here, especially if it's gonna continue like it has in 2014.

I'm not in the business of judgement, I do however have extremely strong & sometimes polarizing views & I'll see to it that they're not expressed when they aren't needed & certainly not when they're ridiculed by equating them to religious beliefs; things in life aren't always black & white but to hide under the guise of grey isn't what I've grown up doing

Fair enough on your opinion, it's a logical one and everyone is entitlesd to it, buuut: do acknowledge that what youre basically saying is no one can enter a new market unless they make a far better product than those who are already in the market, more experienced in the market, and already have a much (infinitely) larger market share than the person trying to enter. Thats INCREDIBLY hard to do. Its like trying to become a master archer without being allowed to use arrows.

Thats a pretty anti-consumer view you've got there. I understand where youre getting your opinion from, but still; youre asking ANY company that is trying to enter a well-established market to beat the masters of the market. Thats near miracle. It can and has happened but its a miracle.

 

[III-V]

I'd advise Intel by now that they should drop out of mobile segment ...

That'd be just about the stupidest thing they could do. They've made tremendous progress in mobile, will be making huge strides towards hitting breakeven this year, and will likely begin making a profit next year.

Also, ITT: People that still don't understand how contra revenue works.

 

[R0H1T]

Fair enough on your opinion, it's a logical one and everyone is entitlesd to it, buuut: do acknowledge that what youre basically saying is no one can enter a new market unless they make a far better product than those who are already in the market, more experienced in the market, and already have a much (infinitely) larger market share than the person trying to enter. Thats INCREDIBLY hard to do. Its like trying to become a master archer without being allowed to use arrows.

Thats a pretty anti-consumer view you've got there. I understand where youre getting your opinion from, but still; youre asking ANY company that is trying to enter a well-established market to beat the masters of the market. Thats near miracle. It can and has happened but its a miracle.

Perhaps but there was this another thread where I posted about Xiaomi, now the point was that the mobile market is a race to bottom & really the only viable competitors left at the end of this rat race will be highly integrated players like Apple, Samsung (because they always have a choice for in house design in flagship products, the ones that actually make any money in this market) & to a lesser extent Qualcomm. What I foresee with contra revenues is a bloodbath in the not so distant future, with pretty much everyone operating on wafer thin margins being wiped out in the blink of an eye.

The point is mobile sector ain't yielding any money for Intel so why'd they not wait this storm out ? It's not like their R&D wasn't yielding any results, but then again they have to chug their fabs along, the only real justification I can see in for this.

 

[Lonyo]

Who is Intel driving out of the market with their strategy?
Name one company Intel has driven out of the mobile phone/tablet market with their strategy.