European Commission Hits Intel with $1.45 Billion Fine - Page 2

John Spooner, an analyst with Technology Business Research, said the Commission's ruling will have far-reaching effects in the market.

"Although Intel faces a $1.5 billion fine from the European Commission, it's not about the money for the chipmaker," Spooner wrote in a report. "It's about influence. Today's action by the European Commission-and the potential for the U.S. government to take action in the future-will work to limit Intel's vast influence on the PC market. ... There is no doubt that Intel has been and will continue to be heavily involved in influencing the future direction of the PC market. However, the actual results of the EC ruling remain to be seen."

Spooner said he expects that influence will be limited to some extent by the Commission's actions. Intel uses a number of "levers," including rebates-or what Spooner said are called market development funds-pricing discounts and a well-funded marketing arm, to influence PC makers in which systems they bring to the market and how those systems are positioned, he said.

A reduced Intel influence on the PC market could change things, Spooner said. For example, the netbook market would have seen greater experimentation with larger screens without such a strong Intel influence. Indeed, during a meeting with investors and analysts May 12, Otellini spoke of a netbook market that Intel essentially created and dominates.

"Instead, Intel has helped PC makers to develop a new class of thin and light full-size notebooks, based on the forthcoming Intel's Consumer Ultra Low Voltage Core processors (dubbed CULV) to occupy the 12-14-inch screen range," Spooner wrote. "To create these machines, Intel has delivered a lower-cost version of its platform for lightweight notebooks. It did so instead of offering its Atom processor, which it has tied to the smaller-sized screens, for these notebooks."

That said, limiting Intel's practices won't necessarily mean a huge jump in AMD-powered systems, he said. AMD needs to do the work to ensure that its products and prices are competitive with Intel's, something AMD is trying to do with its Puma notebook platform and Yukon chips for lightweight systems.

Making headway in the business space will continue to be a challenge for AMD, but Spooner said that consumers are open to trying AMD-powered systems.