All Things Digital

Intel’s Core 2 Duo Extreme X9100 is shipping in “limited quantities,” all right. Quantities limited to Apple.

The Apple (AAPL) Web site went offline for a bit this morning, and when it returned it featured a handful of new iMacs, all of them apparently running Intel’s (INTC) as-of-yet unannounced X9100 Montevina processor. Priced between $1,199 and $2,199, the latest iteration of Apple’s iconic all-in-one system features the same enclosure as its predecessors, outfitted with the most powerful graphics cards yet available on the system and Core 2 Duos running at 2.4GHz, 2.66GHz, 2.8GHz and 3.06 GHz. All four have 1066MHz front-side buses and 6MB of L2 cache, configurations curiously absent from Intel’s current price list but expected to debut with Intel’s Montevina refresh.

How is it that Apple’s able to ship machines running unannounced Intel product? Perhaps the company’s designed its product roadmap to dovetail perfectly with Intel’s. Or, perhaps, Apple’s agreement with Intel is another of CEO Steve Jobs’s sweetheart-of-a-deal masterpieces that gives the company early access to Intel’s newest chips.

Our relationship with Apple is like a relationship in any marriage, good or bad. It’s an important relationship for both of us to maintain and make stronger, knowing that there are differences.”

–Former Adobe CEO Bruce Chizen, Sept. 2003

The iPhone doesn’t support Flash and according to Apple (AAPL) CEO Steve Jobs it’s not going to anytime soon.

In remarks during the company’s annual shareholder meeting yesterday, Jobs said Flash Lite, the mobile version of Adobe’s (ADBE) popular Flash Media Player, simply isn’t good enough for the iPhone. The device needs something more robust, but not so much so that it compromises its performance. Apparently, Flash Lite is insufficient, and the standard Flash player runs too slowly on the iPhone’s processor. Flash “performs too slow to be useful,” Jobs said. And Flash Lite “is not capable of being used with the Web. … There’s this missing product in the middle.”

“Too slow to be useful.” “Not capable of being used on the Web.” That’s a disparaging way of describing the products of a partner with whom you’ve had strained relations over the years, isn’t it. Certainly, it’s not the most diplomatic. But then Jobs isn’t exactly renowned for his diplomacy. As a recent profile of him Fortune explains, “Jobs himself judges the world in binary terms. Products, in his view, are ‘insanely great’ or ’shit.’ … Subordinates are geniuses or ‘bozos,’ indispensable or no longer relevant. People in his orbit regularly flip, at a second’s notice, from one category to another, in what early Apple colleagues came to call his ‘hero-shithead roller coaster.’”

So why take such a pot shot at Adobe in a public forum like this? Is Jobs telling the company to get its act together and develop an iPhone-specific Flash player, or is he suggesting that Apple itself might develop that “missing product in the middle”? Hmm. Perhaps it already has.

There’s a reason Intel’s processors are in more than four out of five x86 computers sold in the global market and–like the European Union, Japan and South Korea–New York’s attorney general thinks it might be an anticompetitive one.

Empire State AG Andrew Cuomo today opened a formal antitrust investigation against Intel to determine if it violated state and federal antitrust laws by engaging in a relentless, worldwide campaign to coerce customers to refrain from dealing with its rivals. “After careful preliminary review, we have determined that questions raised about Intel’s potential anticompetitive conduct warrant a full and factual investigation,” Cuomo said in a statement. “Monopolistic practices are a serious concern, particularly for New Yorkers who are navigating an information-intensive economy.”

Harder still for Intel rivals navigating a potentially antitrust-intensive economy. Rivals like Advanced Micro Devices, who in 2005 filed its own antitrust lawsuit against Intel, accusing the company of using illegal inducements to dissuade OEMs from buying AMD processors and “knee-capping” those who did.

Harsh accusations, but ones supported by some disturbing anecdotal evidence. In 2000, for example, Michael Capellas, then chief executive of Compaq Computer, allegedly told AMD that Intel had withheld the delivery of some server chips because of Compaq’s relationship with AMD. He told AMD he would stop buying from it, saying he “had a gun to his head.” And in 2004, Gateway officials told AMD that Intel “beat them into guacamole” after they purchased some AMD microprocessors. These are but two incidents among 38 other alleged acts of coercion claimed by AMD in its suit.

Intel, of course, denies them all. Just as it denies AG Cuomo’s. “We believe our business practices are lawful,” said Intel spokesman Chuck Mulloy. “We also believe that the microprocessor market is a competitive market and is behaving just as one would expect a competitive market to behave.”

It’s slower than initial expectations and about six months later than originally promised, but Advanced Micro Devices’ quad-core Opteron (Barcelona) processor is still a milestone for the company and perhaps an antidote for its sagging financial fortunes.

The new server chip, which puts four processors on a single silicon die, is the first of its kind and AMD’s shot at regaining some of the market its lost to a resurgent Intel. The company’s market share was about 25% in the middle of 2006. By mid-2007, it had slipped to close to 13%. “There is nothing that we would have been more excited about than getting it out earlier,” AMD CEO Hector Ruiz told eWeek. “But you know we are not making excuses. This is a damn difficult thing to do, as I’m sure you can imagine. …This is 600 million transistors on a chip, four cores, complex technology and tremendous architectural features. It was, frankly, a little tougher challenge than we had anticipated and it frustrated the hell out of us because we wanted to get it out there earlier.”

Of course you did. The Quad-Core AMD Opteron arrives at market nearly a year after Intel began shipping quad-core processors of its own and follows a string of consecutive quarterly losses. The stakes here have been high for quite a while. But is the quad-core Opteron the winning hand for which AMD hopes? Perhaps. Perhaps not. “Barcelona is not the sweeping challenge to Intel they wanted to make,” analyst Rob Enderle told the Austin American Statesman. “This keeps them in the game and competing. But it’s not a leadership position.”

Certainly, Intel doesn’t think so. This morning the company announced that it now expects third quarter revenue to be between $9.4 billion and $9.8 billion, improving on its previous guidance of $9 billion to $9.6 billion.