Did Intel Kill Opteron?

In April 2003, AMD released Opteron, a fancy new chip designed for servers. Analysts said it was cheaper, faster and guzzled less power than anything else on the market, including Intel's muscular Itanium chip, which debuted in 2001 but never lived up to expectations.

AMD had done its homework during the design process. While both Opteron and Itanium ran newer 64-bit software, AMD's chip was also backward-compatible, enabling it to run software written for older 32-bit processors. That made it more practical in corporate data centers, which run a lot of older software.

A year after the Opteron chip hit the market, we recognized that AMD was winning over some big customers and seemed poised to make a mint. AMD filled the airwaves with press releases and staged anniversary parties as it declared itself the technological leader over Intel.

But Intel held on to its 92% market share in server chips. AMD was stuck at 6.5%. Opteron looked as if it was mostly hype.

AMD's real answer came in the form of a lawsuit filed Monday that accuses Intel of a litany of abuses, including using rebates to bribe computer makers into limiting their AMD purchases and threatening uncooperative customers with delayed shipments. "Tellingly, AMD's market share has not kept pace with its technical leadership. Intel's misconduct is the reason," the lawsuit stated.

The Opteron is featured throughout the lawsuit. AMD accuses Intel of paying IBM to stop marketing servers with Opteron chips. AMD also accuses Intel of interfering with Opteron's marketing and public relations by intimidating customers into skipping launch events.

Soon the courts will get to hear both versions of the story while Opteron, at least for now, collects a lot of dust.

Unfortunately for AMD, there is no good history of saving a product with lawsuits, as former Netscape executives can attest.

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