Intel has posted a detailed, 25-page rebuttal to the antitrust complaint that the FTC filed against the chipmaker this past November. It can be paraphrased as: "We deny almost all of the charges, except for the charges that are bogus because the FTC doesn't even understand the basics of the processor business."

But much more interesting than the Intel rebuttal (which, like the FTC complaint, is eminently worth reading for educational value) is what some of the material in the document appears to reveal about the depth of AMD's mismanagement over the past decade. Specifically, the filing quotes some 2004 comments from former AMD marketing chief Henri Richard, who had some surprisingly disparaging things to say about AMD's processors in an internal memo:

"[I]f you look at it, with an objective set of eyes, you would never buy AMD. I certainly would never buy AMD for a personal system if wasn't working here," Mr. Richard allegedly declared to his fellow AMDers. He apparently went on to characterize AMD as "pathetic" for "selling processors rather than platforms and exposing a partial story, particularly in the commercial segment, that is clearly inferior to Intel's, if we want to be honest with ourselves."

And then comes the kicker: AMD's products have a reputation as a "cheap, less reliable, lower quality consumer type product."

Given that in 2004, AMD's Athlon was soundly beating the pants off of an aging Pentium 4 that had run smack into the power wall and had yet to be displaced by the Core architecture, Richard's comments seem astoundingly disconnected from anything approaching reality.

When winning looks like losing



In 2004, AMD had secured a seemingly permanent spot as the processor of choice across the spectrum of builds in the Ars system guide, a spot that it only recently relinquished with the arrival of Intel's Nehalem architecture. Anand Lal Shimpi captured the PC scene's consensus on the Intel vs. AMD horserace in the opening paragraph of his review of the Athlon 64 4000+, published on October 19, 2004:

It's been a good year for AMD; they've been making money (not as much as Intel, but at least they're in the black) and ask the majority of PC enthusiasts and they're recommending AMD chips. There's obviously good reason; the Athlon 64, while not priced as aggressively as AMD's chips in the past, ends up offering better performance than the Pentium 4, for less money. What more could you want?

Not only was AMD ahead in the enthusiast market, but its enterprise platform held a solid price/performance and performance/watt lead as well. In fact, over the course of 2004 and 2005, AMD's enterprise story grew so compelling that Dell's glaring failure to offer AMD servers during this timeframe went from being a mystery to something of a standing joke about Intel's vise grip on the top computer makers.

Indeed, AMD didn't definitively lose the enterprise server race until the launch of the Nehalem Xeons in the middle of last year, when Intel's lineup finally overtook AMD's server offerings in all the platform-level performance and power metrics that matter. (AMD lost the lead in the desktop and enthusiast market well before then.)

It's possible that there is some mitigating context in which the comments from Richard quoted in the Intel filing aren't as completely backwards as they seem on their face, but I can't imagine what such a context would be. One possibility that might make sense is if the communication that Intel cites was from 2004, but the remarks were originally uttered two or three years earlier.

The only other way that these comments seem at all rational to me is if Richard knew better, but he wanted to shift the blame for AMD's difficulty in raising its profile away from his marketing department and onto the engineers.

Whatever the ultimate source or context for these remarks, if they really do reflect sentiments that Richard openly disseminated within AMD in 2004, then they're also fairly damning for an AMD upper management that didn't know enough to send him packing. The engineering talent at AMD can fairly be said to have schooled Intel on its home turf during this period, and they definitely deserved better than this kind of talk from management.

So, in a roundabout way, Intel's use of Richard's communications does indeed help it make the case that AMD's troubles were (at least partly) due to its own incompetence. But it wasn't technical incompetence, as Intel and (apparently) Richard would have it, but managerial and marketing incompetence.

In the period in question and sometime thereafter, AMD held the performance lead and had superior products from a price/performance perspective in many of the main desktop and server segments that mattered; those of us watching always wondered why the company had such a hard time selling them. Maybe now we know why.

Richard is now the marketing chief at Freescale, the semiconductor company that Motorola spun off in 2004.