The head of Nvidia Corp. said that even though Intel Corp. agreed to pay its arch-rival $1.25 billion in order to settle all legal disputes, the customers still need to be protected from Intel since the company’s business practices were far from fair. In response, Intel said that chief exec of Nvidia was also unfair in his allegations towards the chip giant.
“We'll keep growing as a company, but further action needs to be taken to protect consumers, said Jen-Hsun Huang, chief executive officer of Nvidia, reports Cnet News web-site.
Mr. Huang believes that discounts Intel provides to its customers who acquire Intel Atom processors and chipsets in bundles are unfair and undermine Nvidia’s ability to popularize its GeForce 9400M (Ion) core-logic on the growing market of netbooks and nettops. The highly-ranking executive believes that the tactics is both aggressive and anti-competitive.
“Intel's tactics with Ion have been the most aggressive we've seen from a competitor. They have offered the Atom [a total of three chips] for $25, but when the one-chip Atom is used with Ion, it sells for $45. A customer can't even choose to resell the chipset and use Ion instead. What's the point of Nvidia getting an Intel bus license if it's impossible to overcome Intel's pricing bundles?" said Mr. Huang.
Bundling schemes are not something new for Intel: the company became massive successful with its Centrino brand (which required notebook vendors to use a Pentium processor, an Intel chipset and an Intel wireless network controller to put Centrino mark on their laptops) earlier this decade. Still, Nvidia is also known for forcing customers to use its own components exclusively: the firm did not support SLI multi-GPU operation modes on platforms that were based on non-Nvidia chipsets. In addition, from time to time the company, according to some reports, used to sell its high-end graphics chips only on condition that its partners would acquire lower-end models as well.
Intel says that selling products in a bundle or negotiate regarding exact pricing is not something unfair and that Mr. Huang’s claims are baseless.
“He's playing a trick of numbers. He's giving you a $45 list price – that nobody pays – for a part and then a negotiated price (which is more realistic). He's mixing apples and oranges. We have scrubbed and continue to scrub our pricing practices as it relates to chipsets and processors. It's all above cost. And that meets the legal standard worldwide," said Intel spokesman Chuck Mulloy.