Technologizer

Last month, Intel and AMD settled their differences with an agreement that ended the long-running legal battle between the world’s largest CPU maker and its much smaller rival. Today, Intel is in hot water with an organization far more powerful than AMD: the Federal Trade Commission. The FTC is suing the company, accusing it of abusing its dominating market position to stifle competion. And the most interesting parts of the FTC’s list of complaints involve not CPUs but GPUs. Which is not a market that Intel controls in the least–Nvidia and AMD dominate discrete graphics, and Intel was recently forced to indefinitely delay its Larrabee GPU.  But the FTC says that Intel makes it difficult for PC manufacturers to choose Nvidia or AMD graphics options by charging them higher prices for CPUs than if they opt for Intel’s less powerful integrated graphics.

Here’s Intel’s response to the suit, in which it says it was on the verge of a settlement with the FTC, and that it’s the victim of a rush to judgment.

I don’t know enough about the backstory to have an opinion of the specifics of the FTC’s charges, and I like free markets more than government interference, but this I know: Consumers benefit when there are multiple healthy competitors in a category. If PC manufacturers make technology decisions based primarily on fear of Intel–which is what the FTC claims–it’s not good for anybody except Intel.

One of the longest-running, fiercest battles in tech isn’t exactly ending–but it’s sure entering a new phase. Today, Intel and AMD announced that they’ve reached a settlement that ends their legal wrangling (most notably AMD’s lawsuit against Intel for monopoly abuse), establishes a patent cross-licensing agreement, sets ground rules for how Intel can compete with AMD, and puts $1.25 billion of Intel’s money in AMD’s pockets.

The agreement doesn’t end legal action against Intel by government officials, such as the EU’s $1.45 billion fine for abusive business practices (which Intel is appealing) or New York State’s recently-filed lawsuit.

For consumers, the major question about the settlement is pretty simple: Does it increase the likelihood of healthy competition between Intel and AMD, thereby driving greater chip innovation and lower prices so that we get the most PC possible for our money? We’ll see. But it’s fascinating to look at what Intel has agreed to refrain from doing, as reported by Cnet:

• Offering inducements to customers in exchange for their agreement to buy all of their microprocessor needs from Intel, whether on a geographic, market segment, or any other basis

• Offering inducements to customers in exchange for their agreement to limit or delay their purchase of microprocessors from AMD, whether on a geographic, market segment, or any other basis

• Offering inducements to customers in exchange for their agreement to limit their engagement with AMD or their promotion or distribution of products containing AMD microprocessors, whether on a geographic, channel, market segment, or any other basis

• Offering inducements to customers in exchange for their agreement to abstain from or delay their participation in AMD product launches, announcements, advertising, or other promotional activities

• Offering inducements to customers or others to delay or forebear in the development or release of computer systems or platforms containing AMD microprocessors, whether on a geographic, market segment, or any other basis

• Offering inducements to retailers or distributors to limit or delay their purchase or distribution of computer systems or platforms containing AMD microprocessors, whether on a geographic, market segment, or any other basis

• Withholding any benefit or threatening retaliation against anyone for their refusal to enter into a prohibited arrangement such as the ones listed above.

Basically, Intel’s agreeing not to take actions that would shut AMD out of dealing with major PC companies entirely, or hobble it so severely that it might as well be shut out. Sounds good to me. I wanna have the opportunity to choose between PCs based on a variety of processors from multiple companies.

Ultimately, AMD has always fared best when its portfolio of chips has been at its strongest in comparison to Intel’s offerings. Today’s agreement won’t have any immediate effect on its product lineup, of course. But if it increases the chances that a great AMD chip will get a great response from the industry, it would be…great.

For as long as I can remember, AMD has been trying to convince the world to worry less about specsmanship when thinking about the CPUs inside PCs. It’s often had a point, such as when it argued that processor clockspeeds were a lousy way to judge a chip’s performance. (It largely won that war when Intel deemphasized clockspeeds in its marketing, although I have a sneaking suspicion that consumers still use them as a primary means of comparing processors.)

Now AMD is making a dramatic bid to simplify branding of its CPUs down to the bare essentials. In fact, rather than emphasizing specific CPUs at all, it will focus on three levels of performance:

PCs with Vision technology are basic machines designed for Web browsing, music listening, and the like. Ones with Vision Premium are potent enough to handle video and audio conversion well, as well as gaming. And Vision Ultimate indicates that a PC is well suited to video recording, audio editing, advanced photo editing, and the like.

Beyond the fancy stickers, there are two simple ideas here: AMD is emphasizing media applications (which makes sense, since video and audio-related performance is the main reason to worry about what chip you get at all) and is giving consumers the classic choice between good, better, and best. (However, it plans to introduce Vision Black, a sort of “bester” designation aimed at gamers and enthusiasts, early next year.)

Intel, meanwhile, is trying to simplify performance comparisons, too–but its menu of choices is broader and more complicated, and it’s not always easy to figure out how everything relates. Which brings up an issue with Vision that’s out of AMD’s control: The most important CPU comparisons are those you make between processors from competing companies, and it isn’t obvious how the three Vision options map to Intel’s chip family.

I’m sure that serious tech enthusiasts will squawk that AMD is dumbing things down too much (and the company does say that it’ll use more traditional, meaty technical facts to market its chips and technology for that crowd). But when I think about how I buy PCs these days, the Vision distinctions would probably do the trick. There was a time when I dithered over whether I needed a CPU with a math coprocessor, and got excited over stuff like MMX extensions. Today, I mostly want a general idea of whether the processor will be potent enough for the tasks I’m likely to throw at it. And once I’ve plunked down my money for a computer, I tend to forget what’s inside.

How much time do you spend thinking about CPUs these days?

[A NOTE FROM HARRY: Here's the inaugural edition of a new feature: Technologizer Q&A. We'll give you the opportunity to pose questions to interesting technology companies. First up is chipmaker AMD--many thanks to VP of Advanced Marketing Pat Moorhead for answering these queries.

Got nominations for other companies you'd like answers from? Let me know--I'm lining up subjects for future installments.]

Fernando Garcia asks:

I have always asked the following question. Why is it that AMD will not step up advertising? A good 70% of the consumer public,still does not know what AMD is. I used to work for Best Buy and on the average day, one out of eight persons I would speak to knew what AMD was. Whenever I asked a customer  about processors automatically they would say Intel.

Pat answers:

Simply taking out more advertising does not guarantee a product’s success. I think the best way to answer that is AMD chooses to focus differently. We first focus on making our customers and their channel partners successful by investing in them, not leveraging off their brandsby sandwiching them between AMD logos. We want to invest in our customers’ success. For those people who are specifically focused on the “processor,” we have very high awareness and market directly to end user groups. These include but are not limited to enthusiasts, gamers, DIYers, Fortune 1000 and government decision makers, etc.

Continue reading this story…

Technologizer is launching a series in which we’ll let readers pose questions to tech companies, and AMD was nice enough to volunteer to be the first organization to field your queries. Got any questions about the company, its products, the chip industry, or tech in general? Ask away in comments on this post by the end of day on Wednesday. Then look for AMD’s answers soon.

I’m happy to announce that we’re cooking up a new Technologizer feature that will let members of the Technologizer community pose questions to tech companies–and I’m equally happy to report that the first company that’s agreed to field your queries is chipmaker AMD.

If you’ve got a question for AMD–about its products, the state of the chip race, the future of computing, or anything else–please post it as a comment here. We’ll collect the questions you post and publish a story soon with answers.

Also welcome: nominations for other companies who you’d like to have the chance to shoot questions at.

[A NOTE FROM HARRY: Please welcome Patrick Moorhead of AMD to Technologizer's roster of contributors. He'll be writing both topics relating to his day job and others that simply stem from his experiences as a gadget enthusiast.]

Do you ever feel like the actual battery life on your notebook never quite equals the information that appears in promotional material? For example, you may see “up to five hours,” but actually get about half that.  Well, you aren’t alone.  I hear it all the time, and if you do a quick Twitter search on the topic, you’ll see lots of discussion.

I can assure you that no devious plot exists to mislead you. It really comes down to a few simple factors.

#1: Measurements are best case: Like a car’s “highway miles per gallon” which gauges the best case (cruising at a sustained speed for an extended period without stop-and-go driving), notebook battery life is typically based on MobileMark 2007. This benchmark primarily measures battery life while the notebook is doing nothing–not even wirelessly connecting to the Internet. A “city-driving” equivalent of notebook battery life doesn’t exist…yet.

#2: Different strokes for different folks: We all use notebooks differently, and therefore will see different battery durations.  Some watch HD web videos on YouTube, some may just do email, and some play more games than others. all of which will mean varying battery life.  You can see this data from AMD here that shows the phenomenon.  (Disclosure: I work for AMD) This also shows that battery life varies depending on the combination of components inside a machine.

#3: Battery life varies over time: The longer you own your notebook, use it, charge, and recharge, over and over again, the more the battery loses its effectiveness.  So theoretically, your longest battery life will be on the first day you crack open the packaging.  See all the people selling new batteries for old notebooks?  Some even say that battery life is variable with heat.

So what should you do?

• Grade battery life on a curve–let’s say, 60% of the claimed performance. If the label says 10 hours, my guess is it’s probably only about 6 hours in real use.
• Ask your retailer and systems providers to provide the “city miles per gallon,” or, using the tried and tested cellphone analogy, “talk-time.” They all have Web sites–and when all else fails, you can ask them over Twitter.

I may have not added back 40% of your battery life, but hopefully you know why you only get 60% of it!

Pat Moorhead is Vice President of Advanced Marketing at AMD. You can find him on his AMD blog, Twitter, FriendFeed, and LinkedIn. His postings are his own opinions and may not represent AMD’s positions, strategies or opinions.

The chipmaker is hoping splitting itself up is what it needs to compete with Intel. While the original announcement of the breakup happened in October, the actual breakup occurred today. The larger of the two would still be AMD, which would retain about 14,000 employees, and would be charged with design and marketing.

Manufacturing of the chips would be the responsibity of the temporarily named Foundry Co. 3,000 of AMD’s employees would transition there. AMD would have a 50 percent stake in the new company. Most importantly, the company would no longer have any debt.

That has been assumed by the Abu Dhabi government in return for a large stake in Foundry. Intel should be a bit worried: now debtless, AMD will have a much easier time in taking the chipmaker head-on.

What’s up, ladies and gents?

Safari 4 is blazingly fast.

Google explains yesterday’s Gmail outage.

…and Gmail users get phished.

Google joins European Microsoft tussle.

Is your congressperson on Twitter?

Intel says thin is in.

AMD demos six-core CPU.

A big Photoshop bug fix.

Microsoft’s stock isn’t so hot.

Google updates Internet 6 Toolbar.

Roy Blount wants Kindle cash.

Samsung writes a Memoir (phone)

Nokia music phone hits stores.

Will the Kindle go international?

Another roaming-charges horror story.

Adobe patches up Flash vulnerabilities.

Happy Monday morning, Technologizer pals:

Is Amazon’s newest a King-le?

iPhone could become a Kindle.

Two e-book events happnening today.

Triple-core chips from AMD.

The Dalai Lama joins Twitter.

Hey, Woz is going dancing.

Some Apple Stores ban Facebook.

Amazon’s cheapo BlackBerry Storm deal.

Digital TV boxes getting scarce.

Microsoft preps new phone services.

Judge hands Psystar a victory.

Okay, so I can’t be 100 percent negative about this economy all the time. Besides Microsoft’s poor results and resulting job cuts which Harry covered this morning, other big name tech companies also reported results today.

Google’s results were quite respectable: $4.22 billion in revenue and earnings of $5.10 per share. This beat Wall Street expectations, who were looking for $4.12 billion and $4.96 respectively. How many times these days do you hear about a company beating The Street lately? Not much.

It’s advertising business, essentially the core of Google’s revenues, actually increased ever so slightly which came as a surprise to many. In a weakening ad market, it was expected that the so called “cost per click” would decrease during the quarter.

Employees will be happy: Google is launching a program for “underwater” stock options — where the cost of the option is higher than the current stock price — for new options that will be priced at the share price at close on March 2.

But don’t get too excited. AMD rains on our parade with results that come in below what Wall Street was expecting. The chipmaker was already struggling, so this hits doubly hard.

The company lost $1.424 billion on revenues of $1.162 billion, which means that its losses outpaced revenues. However, lets be far to AMD: this included $996 million in one-time charges, including $684 in impairment charges related to its buy of ATI.

Still, taking all that out, the company lost about 68 cents a share, considerably worse than the Wall Street predictions of 54 cents. AMD doesn’t see a light at the end of the tunnel yet: it warns that Q1 could even be worse.

Nokia joined the bad news bandwagon too, posting sales of 12.67 billion euros, down a staggering 20 percent year-over-year. Worse yet the company sees a 10 percent drop in handset sales in 2009 over the year previous.

That’s Nokia’s bread and butter, so essentially expect a full year of financial bad news out of the Finnish phone manufacturer. CEO Olli-Pekka Kallasvuo seems concerned, saying “in recent weeks, the macroeconomic environment has deteriorated rapidly,” and the company is taking steps to insulate itself.

Deflation is rearing its head in the chip-making business. Advanced Micro Devices intends to reduce its workforce by nearly 9 percent and will reduce employee compensation during its first quarter.

Even its top executives are taking a hit to their base salaries (no word about their bonuses); the rank and file will see their incomes drop on a staggered basis depending on their employment status. Other perks, including the company’s 401(k) matching program are being suspended indefinitely.

AMD must take difficult and prudent steps to reduce its cost in response to the worldwide economic downturn, it explained in a statement to the press.

This should come as no surprise considering there has been a corresponding downturn in the sales of semiconductors. Chip sales dipped to $20.8 billion in 2008 from $23.1 billion in 2007, according to a recent report by the Semiconductor Industry Association. Public companies like AMD are going to respond to reduced demand by cutting expenses, because they have to act in the interest of shareholders.

The company is not selling the copper plumbing–yet. While its sales have dipped, it still remains second largest semiconductor producer in the world next to Intel, and it has laid out long term road maps for future technologies. Further, new chips designed for low-cost computers, such as its Neo processor, could entice spendthrift consumers to open up their wallets.

Should PC buyers worry about AMD’s prospects or even shy away from buying machines that use its chip? Not really. Companies  that big don’t just close up shop overnight, and AMD is also highly unlikely to skimp on its manufacturing processes or R&D, lest it risk damaging its brand or ceding even more market share to Intel. Customers can buy AMD-based systems with confidence.

HP is showcasing its new Pavilion dv2 ultraportable notebook at the Consumer Electronics Show (CES) in Las Vegas this week. It is the first PC manufacturer to utilize AMD’s value-priced Neo processor, which it is selling for under $1000, and looks like a sensible option for buyers that want to purchase a lightweight–but not bleeding-edge-machine.

The Pavilion is stylish and packs some decently robust hardware. The Neo processor, formerly codenamed “Huron” has a clockspeed of 1.6GHz and is comparable to Intel’s Ultra Low voltage Chips in its power consumption. The notebook offers hard-drive options as large as 500GB, it has AMD-ATI Mobility Radeon HD 3410 graphics, a 12.1-inch LCD screen, and Blu-Ray. Pricing starts at $699; higher-end models cost nearly $900.

Consumers that pay less than $700 for an ultra-portable should not expect every bell and whistle. AMD’s Neo processor has scant cache memory (512K), and is a single-core processor. However, people who are in market for the Pavillion probably will not be using the kinds of applications that take advantage of many-core processors. There isn’t much commercial ‘parallelized’ software on the market anyway.  The Pavilion will pack more than enough of computing power for people to surf the Web and type reports.

AMD will release a dual-core portable chip code-named Conesus in the second half of the year, News.com is reporting. In the meantime, I see no reason why the average person should hold off their PC purchases other than Windows 7 compatibility (although it would seem unlikely that a relatively new machine would not be upgradable).

The T-Mobile G1, the Nokia 5800 XpressMusic, and now the BlackBerry Storm. The iPhone-like touchscreen phones are coming at us fast and furious. And while the Storm doesn’t look to be the mythical “iPhone killer” that folks like to talk about, it’s the most interesting iPhone rival from a hardware standpoint.
Continue reading this story…

It’s been a possibility for a while, and now it’s a reality: AMD, the perennial number-two CPU company to Intel and one of the few chip companies that both designs and manufactures processors, plans to break itself up. The company behind Phenom, Athlon, Opteron, and other CPUs will become two companies: one that designs chips, and one that makes them. The design company will end up partially owned by Mubadala, a company which is owned by Abu Dhabi; ATIC, another company owned by Abu Dhabi, will own the majority of the manuacturing company. Both of those Middle Eastern investments will provide an infusion of cash which is designed to help AMD with its next-generation chips and therefore its overall competitiveness with Intel.

Emotionally, the move may be a big deal for AMD, which has spent decades taking on Intel by, essentially, trying to be Intel. But nearly everyone else involved in the designing and building of processors has decided that financially, it makes sense to separate the building part–which involves massive, massively expensive plants–from the designing.

I’m neither an economist nor an expert on chip manufacturing, so I can’t judge the deal on its merits. But if it helps the two new companies produce more advanced chips more quickly, it’s a good thing for consumers. And, of course, a good thing for AMD, which has struggled to stay even vaguely competitive with the products from its much larger competitor in recent years. (The golden age of the Intel-AMD wars were back around the turn of the century, when AMD rolled out the excellent original Athlon CPU, giving every PC user a reason to consider an AMD-powered computer–and giving Intel a scare that ensured it wouldn’t spend the next few years resting on its technological laurels.)

The chip wars matter to most consumers only because they’re a driver of healthy competition that results in faster, cheaper CPUs that power faster, cheaper computers and other devices. For that reason, I’m happiest when AMD is at its most competitive versus Intel–and hope that this corporate breakup makes as much sense as AMD thinks it will.