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Tom's Blurb: Intel's Press Incident and What Else You Should Know

Strong Arm Tactics - The Best Way To Reign The Computer Industry?

I have to admit it is still bugging me, this conclusion of John Markoff: "The incident may reveal other differences between the American and European computer publishing markets. Several American computer industry publishing veterans said that strong-arm tactics by large computer and software companies were relatively commonplace outside of the US. "

Does anybody honestly believe this kind of thing does NOT happen inside the US just as well? Did anybody wonder why the ZD press didn't get involved although 'PC Professionell' is a ZD magazine? I leave the answer to this question up to you. If you should have problems making up your mind, you maybe should consider business relationships ...

Now pressure on the press is only one way companies can influence the market and it's most likely one of the last considerations a company does. It is much easier and much less dangerous to put pressure on companies that depend on you. These companies wouldn't tell anybody, because they would be lost without the products of this monopoly. Exactly this kind of thing is happening with motherboard manufacturers and lots of computer stores (e.g. 'authorized dealers').

Before a semiconductor company releases a new product like e.g. a chipset, the motherboard manufacturers which like to sell boards with this chipset need samples of this chipset before they can engineer new boards and hence they need engineering samples before the actual product is released. Now what do you think happens if the semiconductor company dislikes a motherboard manufacturer? They get small amounts of chipset samples late. When we are celebrating a motherboard manufacturer for its early release of a new type motherboard, we just have to realize that the relationship of this company with the chipset producer seems to be pretty fine. Other manufacturers just don't have the chance to compete with this, because they got samples much later.

This is not all. Even if a motherboard manufacturer is selling its boards, the chipset manufacturer can cut the supply of chipsets. If there is shortage of supply anyway, they easily can pick companies they prefer. Hence please consider this thought in case you are getting upset about an unavailable motherboard.

Now you certainly ask what could be the reason for the semiconductor company to put a motherboard company on their black list. Well, here are some simple examples:

  • The motherboard company is using chipsets from other manufacturers as well.
  • The motherboard company builds motherboards that support CPUs from a competitor.
  • The motherboard company gives their engineering samples to the press.

There is one company that will have serious problems with these facts. When I went around the CeBIT, Hall 12, and spoke to the different motherboard companies, I asked them if they are planning to use the new AMD 640 chipset on their boards soon. Lots of motherboard manufacturers kept a pretty low profile in answering this question. You will see which motherboard manufacturers will actually use the AMD 640 chipset soon and which won't. I leave it up to you to wonder how good their relationship with Intel is and how much they are depending on Intel chipsets. There is also a company that is now producing the motherboards for the first AMD systems. They are really afraid of trouble with Intel and that they might soon get less chipsets and engineering samples anymore. Isn't that just wonderful?

Now there is another thing you may have forgotten. It is about 4 years ago when Intel was asking chipset manufacturers to cooperate with them. The reason was the introduction of the PCI bus, an invention of Intel. The chipset manufacturers did cooperate with Intel, PCI was available from all chipset manufacturers, which is one reason for its fast success, but then it didn't take long and all the chipset manufacturers started to disappear from the market. I don't think I need to ask you who is the largest chipset manufacturer now. Now Intel is having the power to influence the market with its chipsets very very well. The TX chipset is officially the last Intel chipset for Socket 7. Why does it only support 64 MB cacheable memory, why no AGP? Well, why should the market leader in chipsets and CPUs give its competitor a chance to use an Intel chipset as its platform?

Now a very similar trend is to be seen with AGP and video chipset manufacturers. Again Intel asked video chipset companies to work closely with them for the implementation of the AGP. The video chip manufacturers hardly have a choice, because Intel is the market leader and you can't afford not to follow it. However you certainly know, that Intel is working with lots of power on its own video chip. If there will be no miracle happening soon, Intel will be the world's largest video chip manufacturers by the year 1999. Then it will be able to steer the market just as well as it's steering the market away from Socket 7 and towards Slot One.