Intel structured its pricing policy to ensure that a computer manufacturer
which opted to buy AMD CPUs for that part of its needs that was open to
competition would consequently lose the rebate (or a large part of it) that
Intel provided for the much greater part of its needs for which the computer
manufacturer had no choice but to buy from Intel. The computer manufacturer
would therefore have to pay Intel a higher price for each of the units supplied
for which the computer manufacturer had no alternative but to buy from Intel. In
other words, should a computer manufacturer fail to purchase virtually all its
x86 CPU requirements from Intel, it would forego the possibility of obtaining a
significant rebate on any of its very high volumes of Intel purchases.
Moreover, in order to be able to compete with the Intel rebates, for the part
of the computer manufacturers' supplies that was up for grabs, a competitor that
was just as efficient as Intel would have had to offer a price for its CPUs
lower than its costs of producing those CPUs, even if the average price of its
CPUs was lower than that of Intel.