Quanta Sues AMD Over "Faulty" Chips

The world's largest contract maker of notebook computers, Quanta Computer Incorporated, has filed a lawsuit against Advanced Micro Devices Incorporated (AMD) for what Quanta is calling a breach of contract. Quanta is accusing AMD of selling the company defective products and thus seeks compensation.

AMD and its ATI Technologies Incorporated unit sold chips to Quanta that did not meet the company's tolerances and were unfit for particular purposes, the company noted in a federal court filing in San Jose, California. The chips Quanta purchased were used in notebooks Quanta manufactured for NEC which caused the computers to malfunction and crash according to the court filing.

In a statement from Quanta that is found in the court documents says, "Quanta has suffered significant injury to prospective revenue and profits." Quanta is seeking a trial by jury as well as damages for the faulty chips. AMD, which accumulates over $6 billion in annual revenue, is the second largest maker of computer processors, bested only by Intel, which has a staggering $50 billion annual revenue.

The lawsuit also claims breach of warranty, negligent misrepresentation, civil fraud and interference with a contract. "AMD disputes the allegations in Quanta's complaint and believes they are without merit," AMD spokesman Michael Silverman said in a statement. "AMD is aware of no other customer reports of the alleged issues with the AMD chip that Quanta used, which AMD no longer sells. In fact, Quanta has itself acknowledged to AMD that it used the identical chip in large volumes in a different computer platform that it manufactured for NEC without such issues."

In addition to NEC, Quanta makes computers on contract for HP, Dell and Acer. The company's shares increased 1.9% in Taipei today before news of this lawsuit went public, and the case has been filed as Quanta v. Advanced Micro Devices, 12-cv-12, U.S. District Court, Northern District of California.

Source: Bloomberg - Quanta Sues AMD Over Allegedly Unsuitable Chips for NEC Notebook Computers

Italian Government Slaps Apple with $1.2 Million Fine

Apple has been hit with quite a hefty fine from a somewhat surprising place today, Italy. That's right, on December 27, 2011 the country of Italy fined the tech giant 900,000 euros, or roughly $1.2 million, for allegedly encouraging its customers to sign up for AppleCare, the official tech support of the company, without informing them that they would receive two years of free support after purchasing the service.

Reuters reported that Italy requires every company that does business in the country to offer two full years of absolutely free technical support to any and all Italian customers. AppleCare is an important after-purchase revenue generator for the company. Apple offers this protection service on every single one of its products, from iPads and iPhones to MacBooks and Apple All-in-Ones, though prices vary depending on which device you get the service for. Naturally getting tech support on your iPhone should cost a little less than getting it on your MacBook Air.

Towards the beginning of this year, Apple updated its iPhone plan. The all new AppleCare+ gives customers extended warranties and technical support for as long as two years. In addition to this, the new AppleCare+ also includes repairs on two incidents of accidental damage as opposed to the previous single repair offered. The service itself will cost iPhone users $99.

In addition to AppleCare+ for the iPhone, another AppleCare package for the iMac will run customers $169 with the MacBook Pro option costing $349. The cheapest service is for the iPod Touch, costing only $59.

Apple has yet to release any official statement on the fine by the Italian Government and there is no way of knowing if it will ask employees in Italian Apple stores to make it clear to customers that their products are covered for two years. However, this fine will barely scrape the top of Apple's revenue pile as the company has tens of billions of dollars just lining the walls of their headquarter's bathrooms for decoration.

Source: CNET - Italy fines Apple $1.2 million over AppleCare practices