"Without competition, customers don’t get the innovation they need, or want. Recently, you might have learned that Intel is producing a microprocessor called Itanium. Itanium is our competitor’s migration to 64 bits. If it’s successful, this will be the most painful migration at more expense in the history of computing. This product builds on no history, requires you to change all of your existing software, it’s power-hungry, will never tap the benefits of PC economics, will never go down to a handheld application, and will require everyone to rewrite software. It’s rather amazing. Why? Because it’s not true innovation; it’s not the greatest possible technology for the widest possible audience. I want to talk about that for just a minute, because Intel is ten times AMD’s size, and they spend five times as much on R&D, they spend seven times as much on marketing. Intel has transmogrified – indeed, that means going from something beautiful to something ugly, to become a marketing company. They’re marketing technology that is not true innovation; it’s not the best possible technology. Centrino is a prime example. In most cases, if you want to get a wireless capability in your portable you have to buy a Centrino base. Why? Because Intel won’t give their subsidies to PC makers if they use anybody else’s 802.11 networking chips. Think about that – Intel has a near-monopoly on enterprise PCs. The only way that they will let you advertise [with MDF] that you’ve got Centrino, which they’re going to spend $300 million to promote, is if you use their networking solutions, even if there’s a better one available from Broadcom or elsewhere, and there are, and so consumers are forced in the absence of competition to pay a higher price for an inferior technology. To me, this is an example of a dominant company using its market power to diminish or make market forces irrelevant. If market forces are irrelevant, then entrepreneurial fervor is useless. If the market forces don’t support the entrepreneur, he can’t possibly succeed. If this happens, the big companies will always win, the deck is stacked, you lose, and Silicon Valley becomes Monopoly Valley."
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