Intel needs to keep an eye on ARM

On that sunny day in May, when the European Commission fined Intel $1.54 billion for attempting to unfairly squeeze AMD out of the processor market, it seems likely a number of thrilling new swearwords were invented in Intel’s gleaming Californian offices.

Intel needs to keep an eye on ARM

$1.54 billion is, to paraphrase Douglas Adams, a vastly, hugely, mind-bogglingly big fine, even for a company with the impressive means of Intel. And yet for all the seething injustice the chip giant felt, the one thing that wouldn’t have been seen was panic.

Intel knows full well that even if this humongous fine is allowed to stand, it isn’t going to make a blind bit of difference to a market that it has sewn up tighter than a pair of badly made mittens.

History is littered with penalties and harsh words handed down to transgressing tech companies by bolshy regulators, but very rarely do they threaten the status quo.
Microsoft has been on the end of so many antitrust investigations they’re thinking of calling in Miss Marple to tackle the next one Take Microsoft, for example. The software giant has been on the end of so many antitrust investigations they’re thinking of calling in Miss Marple to tackle the next one, and yet it retains a stranglehold on the OS market that even Darth Vader would blanch at.

The simple fact is that Intel’s $1.54 billion fine won’t reverse AMD’s $330 million loss in the third quarter of 2009. It isn’t going to triple the company’s R&D budget, and it certainly isn’t going to interrupt the tick-tock design and production strategy powering Intel’s Napoleonic conquest of the processor market.

Innovation and investment, not regulation, are the weapons required to knock this king from the throne, and AMD is far too busy clawing its way back into profitability to stage a coup.

But while AMD is scrambling and Intel is arguing, a significant new threat has slipped out of the shadows and, remarkably, it’s British.

Recently, Cambridge-based ARM announced it was ready to take on Intel’s Atom netbook hegemony with its Cortex A9 processor – which will reportedly offer five times the number-crunching fury of the Atom at a comparable power draw.

But while all this bombast certainly spices up a PowerPoint presentation, the most enticing feature of the A9 is that ARM will be offering it without any of the Atom’s rigid restrictions.

As it stands, anybody who wants to build a machine around the Atom is required to have a screen no bigger than 10.2in (although it’s negotiable with individual manufacturers), a hard drive no larger than 160GB, no more than 2GB of RAM and integrated graphics that can’t handle anything beyond DirectX 9. Why? Because Intel doesn’t want cheap netbook processors eroding its more lucrative laptop business.

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