Looks like last month's rumors were true. As the Wall Street Journal reports, Dell was indeed able to pay a fine to the Securities and Exchange Commission without admitting guilt or ousting its CEO. Dell is now $100 million poorer, and Michael Dell himself $4 million poorer, but we may never know for sure if the SEC's laundry list of allegations holds any water.
And we are talking about a rather long laundry list. In a nutshell, the Journal says Dell was accused of failing to disclose huge payments from Intel—payments without which Dell "would have missed Wall Street analysts' profit estimates in every fiscal quarter from 2002 to 2006." The Intel cash reportedly made up over three quarters of Dell's operating income ($720 million) for one quarter in 2006... and the SEC has e-mails of Dell execs discussing "the need for larger payments . . . to hit financial goals"
If that's true, then it's no wonder Dell shunned AMD processors for so long. The Intel deal wasn't just too juicy; it actually helped the PC maker stay in the green. The Journal says Dell's operating income fell by 75% after the company adopted AMD chips. Officially, Dell would only attribute the drop to its "aggressive pricing."
Amusingly enough, Intel told the WSJ that the allegations against Dell haven't been "tested in court" and should thus be taken with a "grain of salt." Not exactly what I'd call an emphatic denial. Good thing Intel settled out of court with AMD last November.
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