Intel 2004 Annual Report Download - page 16

Table of Contents
We plan to continue to cultivate new businesses and work with the computing and communications industries through standards bodies,
trade associations, OEMs, ODMs, and independent software and operating system vendors to align the industry to offer products that take
advantage of the latest market trends and usage models. These efforts include helping to create the infrastructure for wireless network
connectivity. We are also working with these industries to develop software applications and operating systems that take advantage of our
microprocessors, chipsets and other next-generation semiconductor devices with higher performance. We frequently participate in industry
initiatives designed to discuss and agree upon technical specifications and other aspects of technologies that could be adopted as standards by
standards-setting organizations. Our competitors may also participate in the same initiatives, and our participation does not ensure that any
standards or specifications adopted by these organizations will be consistent with our product planning.
Companies in the semiconductor industry often rely on the ability to license patents from each other in order to compete in today’s
markets. Many of our competitors have broad cross-licenses or licenses with us, and under current case law, some such licenses may permit
these competitors to pass our patent rights on to others. If one of these licensees becomes a foundry, our competitors might be able to avoid our
patent rights in manufacturing competing products. In addition to licensing our patents to competitors, our participation in industry initiatives
may require us to license our patents to other companies that adopt certain industry standards or specifications, even when such organizations
do not adopt standards or specifications proposed by Intel. Any Intel patents implicated by our participation in such initiatives might not, in
some situations, be available for us to enforce against others who might be infringing those patents. We cannot be assured that the patents and
licenses on our products will be honored in all regions in which we compete. In various geographies where our business is growing, we have no
assurance about the scope of rights that we can enforce against others, or that others may assert against us. In addition, in certain regions,
governments may adopt regulations or courts may render decisions requiring compulsory licensing of intellectual property to others, or
requiring that products meet specified standards that serve to favor local companies, negatively impacting Intel’
s ability to achieve an economic
return for its innovation and investment.
Intel Architecture Business
We continue to be largely dependent on the success of our microprocessor business. Many of our competitors, including Advanced Micro
Devices, Inc. (AMD), our primary microprocessor competitor, market software-compatible products that are intended to compete with Intel
architecture-based processors. We also face competition from companies offering rival microprocessor designs, such as International Business
Machines Corporation (IBM), which supplies microprocessors to Apple Computer, Inc. IBM is also jointly developing a rival architecture
design with Sony Corporation and Toshiba Corporation. We currently offer desktop, mobile and server microprocessor products based on our
32-bit architecture; enterprise-class servers and supercomputing product offerings based on 64-bit architecture; and workstation and server
solutions based on the IA-32 architecture with 64-bit extension technology that are able to run both 32-bit and 64-bit software applications.
AMD offers competing microprocessor product offerings for servers, workstations and desktops that are able to run existing 32-bit and 64-bit
software applications. We continuously evaluate all of our product offerings and the timing of their introduction, taking into account factors
such as customer requirements, availability of infrastructure to take advantage of product performance, and maturity of applications software
for each type of processor in the relevant market segments.
Our desktop processors compete with products offered by AMD, IBM and VIA, among others. Our mobile microprocessor products
compete with products offered by AMD, IBM, Transmeta Corporation and VIA, among others. Our server processors compete with software-
compatible products offered by AMD and with products based on rival architectures, including those offered by Hewlett-Packard Company,
IBM and Sun Microsystems, Inc. Our chipsets compete in the various market segments against different types of chipsets that support either
our microprocessor products or rival microprocessor products. Competing chipsets are produced by companies such as ATI Technologies, Inc.,
Broadcom, NVIDIA, Silicon Integrated Systems Corporation (SIS) and VIA. We also compete with companies offering graphics components
and other special-purpose products used in the desktop, mobile and server market segments. One aspect of our business model is to incorporate
higher performance and advanced properties into the microprocessor and chipset, the demand for which may increasingly be affected by
competition from companies, such as ATI and NVIDIA, whose business models are based on incorporating performance into chipsets and
other components, such as graphics controllers.
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