Originally posted by: Martimus
My point is that it did matter, since what Intel did was keep their market advantage with these tactics. They had 500% more resources, but kept AMD or any other competitor from gaining any market share. (Although at the time in question here it was only AMD, but that isn't to say they didn't use similar tactics in the past to kill of the other competitors; and since they did in fact die off it would seem quite feasible.) The immediate consequences were minute, but what it enabled was the long term consequences that AMD would be unable to sustain any advantage that it held (and they were unable) since they were unable to capitalize on said advantages with higher revenue which would have ate into that 500% advantage. The point I am making is that if these illegal activities did not take place, then AMD could have a higher revenue, which would mean that Intel's revenue advantage would be decreased regardless of how Intel did. This may have dropped the advantage to a 3-1 ratio, or a 4.9-1 ratio, or even possibly led to a disadvantage of some ratio, but my point was that this advantage that is the most likely source of dominance would not be assured without those illegal activities.
I am up way past my bedtime, so please excuse my grammar, or if I did not quite convey my point coherently.
Martimus I fully agree with the spirit of your post as I interpret you as having expressed it, but at the same I disagree with the rigidness that you are invoking in regards to the outcome being solely a consequence of illegal activity.
IMO Intel was quite capable of effecting the same outcome thru entirely legal actions on their behalf...again with my point here simply being that existence of the outcome itself does not explicitly require illegal activities and thus the outcome itself is not evidence or proof in its own right that illegal activities were involved in the creation of the outcome.
Let me expand on this - with 5x the resources surely Intel could have adequately suppressed AMD's marketshare efforts thru the use of a well-budgeted marketing and advertising campaign (Intel Inside) combined with leveraging their lower cost structure for manufacturing (volume baby, volume) to sell chips at pricepoints which would have still generated net positive profits and gross margins for Intel but would have decimated AMD all the same.
To put it differently, just how piss-poor and dumbed-down would we have to contemplate Intel's management to be in order for them to find themselves in a situation where despite their well filled coffers and resource flushed R&D teams (as far back as 1993 mind you, not 2003) that they had no choice but to engage in illegal activities just to merely maintain their marketshare lead over AMD for decades to come?
I'm not saying it didn't happen, I'm saying I really have to paint a pretty dim picture of Intel management's ability to manage their business and their resources in order to convincingly argue to myself that the market outcome can only be explained by invoking illegal activities.
Now where you can convince me that perhaps illegal activities (as in abuse of monopoly position) came into play is not in the marketshare results but in the net profits and gross margins category. Sure Intel had the ability to put the hurt on AMD to effect the same outcome as we see today, but to be able to do that while maintaining >50% gross margins? Yeah now I start to become a tad suspicious.
But then again maybe that is just an unavoidable outcome of investing 5x the resources into R&D, you maintain not only a timetable lead over your competitors in terms of manufacturing nodes but you also generate a net positive offset in gross margins over your competition because of that timetable and the resources your are investing into its creation. 5x the resources allows you to do more things in parallel, as in "(1) create 130nm node with 8 month lead over competition, and (2) simultaneously engineer into the 130nm node the cost savings necessary for us to maintain a 30% GM advantage over the competition". From experience with building nodes that had to compete with the Taiwan foundries this is completely plausible in my mind.
So in closing, I agree with the logic you are using but only within the confines of some very strictly defined and seemingly unrealistic operating conditions for Intel's management. If they were operating under the self-imposed restrictions of not lowering gross margins as needed to put the hurt on AMD then we could make the argument that AMD would not be in their current situation if we stripped out the impact of illegal activities on Intel's behalf.
But there are many ways to skin a cat, and IMO Intel could have just as deftly put AMD into the intensive care unit by purely legal and traditional competitive methods so I can't really accept the argument that their condition could only have stemmed from illegal activities.