The year in firstview

[W1nTry]

PC industry turned upside down in 2006

2006 Dell far from Dull as notebooks get flamed

By INQUIRER staff: Sunday 17 December 2006, 07:59
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IF 2006 wasn't the year of Dell, it certainly wasn't the year of Dull either.

The year kicked off with Michael Dell being wheeled onto stage at the Consumer Electronics Show (CES) by Intel to pledge his troth to Chipzilla.

But it was already clear by then that Intel had a deal with Apple in place, demonstrated just a few days later when CEO Steve Jobs bit the bullet and said his firm would use Intel chips for its Macintosh machines.

This was Intel's way of saying it was tired of being pushed around by its biggest customer and precipitated the long awaited adoption of AMD processors by Dell later in the year.

It was clearly evident to most observers that Intel would have to do something to turn its own fortunes round. At its Developer Forum in San Francisco just a month later, there were persistent rumours that the board of directors of Intel was ready to keelhaul CEO Paul Otellini unless he did something to chip away the barnacles and seaweed that were slowing the progress of the Good Ship Chipzilla.

At CeBIT, one month later, the first rumours started to surface of changing alliances within the industry. Speculation started about the roles of Nvidia, ATI, Intel and AMD in the future shape of things to come. Intel was clearly not going to allow the graphics companies to dictate its future direction and had started a project that might lead to it introducing its own discrete graphics chip in the future.

That must have concentrated the minds of the guys at ATI, at AMD and at Nvidia. In May, ATI's Dave Orton denied rumours that Intel might acquire his company - but did suggest that the chipset business would go through a period of consolidation in the future. AMD and ATI had obviously started talking seriously by then. And Dell, by May, acknowledged it would use AMD chips - just an Opteron for high end servers, so Kevin Rollins maintained, but the INQ knew differently. The glorious alliance between Dell and Intel was cracking.

By the time Computex came, the direction of the rumours had totally changed - now AMD was the suitor and ATI the not so reluctant bride. These rumours just would not go away.

The notebook industry and the world+dog were woken with a bang later in June when the INQ published two pictures of a Dell notebook bursting into flames at a Japanese conference - the images were to fly around the world with staffers receiving requests from numerous news organisations for permission to use the pictures.

It transpired that Dell would recall millions of Sony-made chargers for its notebooks - another story that the INQ was first to break. It was obvious that it wouldn't just be Dell that would be forced to recall - in the end a spate of notebook manufacturers were forced to eat their words.

In late July, AMD and ATI admitted the love that would previously not speak its name, homogeneity, just three days after the INQ had once more broken the story.

It was clear that this move would cause a sea change in the PC industry as we knew it. It put Nvidia on the back foot and suggested that all sorts of previous alliances at vendor level and in the distribution and dealer channel, were now completely up for re-discussion.

The firm that prided itself on its ethical behaviour suffered a crushing humiliation after charges were brought against HP and some employees for using false pretences to discover who had leaked "secrets" to the press. Mark "Teflon" Hurd continued to cut staff while maintaining his complete innocence and grovelling mightily to a congressional inquiry into the affair.

The AMD antitrust case against Intel continued to tick away like a slow burning fuse during the whole of 2006. We began to feel sorry for the judges presiding over this can of worms - a can, much of the can will be under seal so that the world+dog cannot examine the intriguing relationships between the vendors, the distributors and the resellers. The vendors like to describe these relationships as an "ecosystem", but if it's an ecosystem it's one that is suffering from its own variety of global warming.

The biter AMD itself got bit when the Justice Department subpoenad Nvidia, ATI and AMD in late November followed by a class action alleging antitrust behaviour earlier this month.

Other things that happened. Dell bought Alienware. HP bought Voodoo PC. Microsoft shipped a version of Vista and promises to shower us with more next month. CA's disgraced CEO Sanjay Kumar got sent to clink.

And Dell and Apple ended the year not with a bang but with investigations continuing into their behaviour on what appeared to be a company wide malaise - the practice of backdating share options. µ