AMD yaps at Intel’s tablet rebates

AMD is incandescent with rage at Intel’s cunning plan to offering rebates to device makers that use its chips for tablets.

Intel needs to win over lots of tablet makers in 2014 to hit its target of 40 million and is offering OEMs rebates for using its chips.

AMD Chief Executive Rory Read said during a first-quarter conference call on Thursday about contra revenue or rebates that Intel gives device makers to incentivise them to use its chips. In this case, chips that go into tablets

He said that AMD had a competitor that’s really taking a “different approach” in terms of revenue management by using rebates.

“They have a different philosophy on profitability sometimes, but this idea of contra revenue is a foreign idea to us,” he said.

As far as PR is concerned that is fighting talk and is the equivalent of making comments about a rival’s mother. While he did not mention the words antitrust it must be in his mind.

AMD has good reasons to be suspicious about Intel’s contra revenue plans as it sails dangerously close to antitrust actions. The logic is that Intel can use its market share and piles of cash to shut rivals out of the market by bribing suppliers to use its chips.

However Intel is saved in this case by the fact that it is not a market leader in mobile chips and it would be difficult for any antitrust inquiry to find against it.

But Intel is aware of the problem and spent a lot of time during its own earnings conference call on Tuesday discussing contra revenue with analysts.

Intel wants to use contra revenue to make sure it hits a stated goal of 40 million tablets shipped this year with its chips inside. In the first quarter, Intel said five million tablets shipped with its processors so it is a long way from meeting its goal.