AMD And Intel Put Differences Behind Them And look To The Future

Intel hopes to expand into other markets

For Intel, the settlement with AMD means it can focus on areas where it sees its greatest growth potential, outside of the traditional PC and server markets, analysts said. Intel has made no secret of its desires to expand in such areas as netbooks, consumer electronics, handheld devices and graphics.

“In five years, 98 percent of Intel’s revenues won’t be coming from server and PC processors,” Spooner said.

Jack Gold, an analyst with J. Gold Associates, said Intel’s biggest concern these days is not AMD, but ARM and its various licensees—including Qualcomm, Texas Instruments and Freescale Semiconductor—that dominate the mobile space.

“While PC and server chips are its breadwinner today, Intel rightly understands that the sheer number of personal and consumer intelligent computing devices that will be built over the next several years will far outnumber the traditional PC marketplace,” Gold wrote in a report. “These devices—smartphones, netbooks, Mobile Internet Devices, home entertainment, smart appliances, personal entertainment, smart power devices, smart autos, and on and on infinitum … all connected to the Internet—are not currently the domain of Intel and its x86 architecture.”

This poses a risk to Intel, which is why the vendor is spending so much money and effort on its Atom platform, Gold said.

Legal issues likely to linger

Still, before Intel moves too far into the future, it needs to deal with other legal issues surrounding its business practices. Intel is appealing a $1.45 billion (£170 million) fine levied by the European Commission in May, and now has to deal with the New York lawsuit.

The settlement also may have allowed Intel to dodge another complaint that analysts had been expecting from the Federal Trade Commission.

Otellini said he was hopeful the AMD settlement would “bring some comfort to regulators.” Endpoint’s Kay said the established cases, such as the one out of Europe, would probably have to run their course. As far as the newer ones, such as the New York lawsuit, they may go away pretty quickly now that the AMD deal is in hand, he said.

There still are a few lingering issues to be worked out around pricing, both companies said.

The deal also ensures a relatively healthy AMD, which Intel needs to fight off further claims of a processor monopoly.

The Computer and Communications Industry Association, which has been a vocal critic of Intel’s business practices, applauded the deal.

“While there is unfortunately no explicit admission of wrongdoing by Intel, perhaps understandably in view of its continuing legal challenges, the facts that have been made public and the size of the settlement [leave] little doubt about culpability,” Ed Black, president and CEO of CCIA, said in a statement. “We nevertheless hope this settlement signals a firm commitment from Intel to stay focused and to compete on the merits of their products, not their power in the marketplace.”