HP figured out that Dells famed manufacturing advantages wouldn't matter if it could expand globally and beat it up in US retail by lowering prices with you guessed it, AMD products(or intel if they could grind them low enough).
There it is in a nutshell... Intel-only Dell couldn't compete (without massive subsidies from Intel) against HP w/AMD in their portfolio, who could offer the consumer lower prices.
So why didn't Dell nullify HP's AMD advantage by also using AMD right away, in 2002, like they were discussing internally throughout 2002-2006? Why was it so important ($6B important) for Intel to keep Dell "aligned"?
Because AMD would take share, make money hand over fist, use it to build capacity, and become an even larger threat to Intel.
Of course, AMD would have to, at least initially, govern its new-found "supply issues" (i.e. demand > production capacity) by raising prices... You know, natural market forces...
and Dell eventually capitulated and gave in to the vocal cries for AMD products in it's portfolio. Which was a disaster when AMD was unable to deliver and Dell had to go crawling back to retail. Ironically the whole go AMD thing accelerated Dell's crash and burn.
The fact that Intel took Dell's rebates away and gave them to Dell's competitors instead sure didn't help Dell either.
fpg
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