Another nVidia/GF FX concern?
- Thread starter martrox
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RM. Andersson
Newcomer
Nagorak said:
A company needs good PR. If a companies ethics are bad enough people will stop buying the products because of it.
So it´s obvious that a company wants to give its customers the impression that it behaves ethical and has high moral standards.
But if the company behaves bad enough the customers will not believe that anymore.
And that means less profit of course.
Regards!
RM. Andersson said:
Exactly what i was trying (not so succesfully) to get across. Next time nvidia says their releasing a product in x months. whos going to believe them. as a stock holder. Id like to think when nvidias promises to sell something for a perticular season that they should deliver the product, or not make that promise. And for those who think that what they did was not wrong take a look at this:
I guess their lack of delivering a product has caused their stock to decline. (more factors are at play but im sure this was a big reason.)
later
sumdumyunguy
Newcomer
epicstruggle said:RM. Andersson said:
Exactly what i was trying (not so succesfully) to get across. Next time nvidia says their releasing a product in x months. whos going to believe them. as a stock holder. Id like to think when nvidias promises to sell something for a perticular season that they should deliver the product, or not make that promise. And for those who think that what they did was not wrong take a look at this:
I guess their lack of delivering a product has caused their stock to decline. (more factors are at play but im sure this was a big reason.)
later
Actually I would contend that it is the collapse of the main target market for IHV's that has had the most effect in causing Nvdia's stock to decline. Remember, Nvdia ATI, Matrox, et al., sell after market products. If the main "market" declines, then the add on vendors will experience a decline as well. Disproportionately so, I might add.
{disclaimer I am an ATYT investor}
Joe DeFuria
Legend
Actually, I disagree with that.
In my experience, very few people actually prevent themselves from buying products for some ethical reason. It would have to be really something terrible.
People like to talk big...."I'll never buy a product from them again...." rhetoric. But you know what? The next time that company makes a product that is the best on the market for their needs, no matter if they still have the same business practices....they buy it. Proclaiming "they have changed!".
Consumers (particularly the so-called hard-core gamers) are so two-faced.
They have no problem complaining about the ethics of some company and declaring their "stand" against them....as long as some other company is making what they feel is the better product.Then as soon as the bad company in question makes the better product, feelings magically change....
Having said that...
What publicizing bad ethics tend to do, is open the flood gates for law-suits. If the "public" turns against a company, it's easy to get a jury that's sympathetic to a plantiff that is suing them for one reason or another. Lawyers LOVE to see companies getting bad public PR...even if they have to create it themselves.
Look at Exxon.
Does anyone think the Valdez incident really made a significant dent in gasoline sales...despite how still today, ExxonMobil is crucified over that incident? Lots of people say "Bad! Bad! Exxon! But you know, I'm still not going to drive an extra 3 blocks out of my way to get gasoline from vendor X...."
The resulting litigation is something else...and that can hurt company profits.
Fuz said:
I disagree, out of everyone I know with a home PC or their own business;
a) People get Office (or Works) bundled with their PC by their Vendor, so no choice is made by them.
b) People get Office forced on them at work - my firm made a policy decison to go with Smartsuite but our clients forced us eventually to turn around and go with Office for compatibility reasons. We didnt hate M$ but Lotus and IBM were clients M$ were not. What the IT likes/dislikes is of no importance to the needs of the firm.
c) users who really hate MS will go with Star office and Linux at home and know how to translate, live with the differences.
d) People who hate Microsoft who have to have Office at home will envariable have a copy not an original. That's their revenge.
e) The majority of people who buy Office for home use out of their own pocket dont hate M$ as they dont care.
I don't think that the FX is the main factor(if at all) in the current decline of nvda's stock price. As was said before the current market conditions are the main reason. This year nvidia's revenue grew something like 15% (which was granted the lowest growth they have experienced in many years usually it was around 100%), ATI's was significantly lower than that even with a superior high-end product.
Ethics shmethics, stock holders want nVidia to do the smartest thing to prevent them from haemoraging money, distributors understand pipeline technology delays and simply go with a competitor if they have to. Besides how do you know nVidia didn't believe they were going to release their part earlier than they did? They were held back by TSMC as far as I can tell, and you really have no idea what timeline they were given? Obviously their information was wrong or nVidia wouldn't have gone .13 in the first place.
Also comparing nVidia and ATI to 3dfx and nVidia is a little premature IMO. As was said, ATI had been one of the largest graphics companies but they were completely humiliated generation after generation by superior nVidia 3d graphics cards, and it wasn't until the purchase of an outside company (artX or whatever it's called) that they released a competitive product. This is by no means intended to diminish their accompishment but to point out that the ATI engineering department failed to provide an answer to an nVidia product for over 5 years... , I personally think it has a lot to do with companies like ATI, trident, Matrox, etc having their primary engineering assets in high quality 2d graphics. This can be attested to by the superior 2d quality of ATI graphics cards, and features like that All-in-one boards. The thing though is that the currenty market really only cared about 3D and ATI failed to transition their enginnering to properly focus on that (up until now). With ArtX ATI appears to have become a real competitor to nVidia which we should all celebrate. But it is still premature to declare the battle won and to discount nVidia. Once nVidia fails to dominate for 3-4 generations a la voodo2/TNT - Voodoo5/GeForce, than one can start making 3dfx-nvidia analogies.
I got nothing at all against ATI, in fact I don't really give a crap about either company (though I wish I had had some cash when nVidia IPO'd, I would have made a bundle). Ultimately I will buy the best graphics card for my money. I just have a beaf against trying to paint the battle as some good vs evil crap.
aah. Alright I keep on repeating myself, what the hell is wrong with me always wanting the last word?.. I guess that's why these threads carry on for so long. You guys can sit in the ATI camp, and I'll just sit on the fence till I buy a peice of silicon from whence I don't give a crap.
peace!
Ethics shmethics, stock holders want nVidia to do the smartest thing to prevent them from haemoraging money, distributors understand pipeline technology delays and simply go with a competitor if they have to. Besides how do you know nVidia didn't believe they were going to release their part earlier than they did? They were held back by TSMC as far as I can tell, and you really have no idea what timeline they were given? Obviously their information was wrong or nVidia wouldn't have gone .13 in the first place.
Also comparing nVidia and ATI to 3dfx and nVidia is a little premature IMO. As was said, ATI had been one of the largest graphics companies but they were completely humiliated generation after generation by superior nVidia 3d graphics cards, and it wasn't until the purchase of an outside company (artX or whatever it's called) that they released a competitive product. This is by no means intended to diminish their accompishment but to point out that the ATI engineering department failed to provide an answer to an nVidia product for over 5 years... , I personally think it has a lot to do with companies like ATI, trident, Matrox, etc having their primary engineering assets in high quality 2d graphics. This can be attested to by the superior 2d quality of ATI graphics cards, and features like that All-in-one boards. The thing though is that the currenty market really only cared about 3D and ATI failed to transition their enginnering to properly focus on that (up until now). With ArtX ATI appears to have become a real competitor to nVidia which we should all celebrate. But it is still premature to declare the battle won and to discount nVidia. Once nVidia fails to dominate for 3-4 generations a la voodo2/TNT - Voodoo5/GeForce, than one can start making 3dfx-nvidia analogies.
I got nothing at all against ATI, in fact I don't really give a crap about either company (though I wish I had had some cash when nVidia IPO'd, I would have made a bundle). Ultimately I will buy the best graphics card for my money. I just have a beaf against trying to paint the battle as some good vs evil crap.
aah. Alright I keep on repeating myself, what the hell is wrong with me always wanting the last word?.. I guess that's why these threads carry on for so long. You guys can sit in the ATI camp, and I'll just sit on the fence till I buy a peice of silicon from whence I don't give a crap.
peace!
No, it simply takes someone rational to look at the facts. Looking at the graph of NVidia and ATI since last summer, both of them have followed the same curve. If Nvidia's decline was really due to ATI's rise, you'd expect ATI to be gaining while NVidia was declining. The problem is, both were declining.
Investors aren't graphics fanbois, most people are looking at NVidia and ATI's financial outlook, not some fancy pixel shading card. The overall tech sector outlook is malaise. So most investors assume that it doesn't matter how good NVidia or ATI's video cards get, since not many people are buying PCs.
This is the same mistake people made with TDFX. They invested because they liked the company's brand and they held out hope that some miracle technology project was going to save the company, but technology was but a small part of TDFX's problems. NVDA has stronger financials, better operating margin, higher revenue per employee, etc. The stock will live and die based on the fundamentals, not a few months delay of the tech du jour. This is not a repeat of the TDFX situation.
Investors aren't graphics fanbois, most people are looking at NVidia and ATI's financial outlook, not some fancy pixel shading card. The overall tech sector outlook is malaise. So most investors assume that it doesn't matter how good NVidia or ATI's video cards get, since not many people are buying PCs.
This is the same mistake people made with TDFX. They invested because they liked the company's brand and they held out hope that some miracle technology project was going to save the company, but technology was but a small part of TDFX's problems. NVDA has stronger financials, better operating margin, higher revenue per employee, etc. The stock will live and die based on the fundamentals, not a few months delay of the tech du jour. This is not a repeat of the TDFX situation.
Joe DeFuria
Legend
Yes and no.
Things like "a few months delay of the tech du jour" can have a negative impact things like financials, operating margin, revenu per employee, etc, which in turn has a negative impact on investors.
On mess-up like the GeForce FX won't mean much in the short term, but it could have some significant long-term effects...especially if it is compounded by another "few months delay" in the next tech du jour.
Hellbinder
Banned
Nice to see you jumo to the end result to make your case. However, Thats not how Nvidia GOT TO where they are now. They Got to where they are now EXACTLY with Fancy pixel shaders, fast graphics cards etc.. and Yes they created MANY a fanboi.
3dfx fell becuase they made one bad buisness decision after the next, and missed product cycles, and lost mindshare. the exact same can and WILL happen to Nvidia if they follow the same series of mistakes. If their stock price plummets, their assets and value go to crap over night. It can happen that fast. Note, I am NOT saying that it will happen, i am saying it could happen.
The Stock market is driven more with what people FEEL about a product, its brand power etc than hard market data. All it takes is to watch Kudro +Kramer or a few other stco shows to see the what really drives the market.
My point is, it takes more than one product cycle delay to hurt NVidia. If they continue to miss deadlines for the next 2-3 cycles, they will be seriously hurt. But the current dire predictions over the FX aren't justified.
TDFX didn't just miss deadlines, they were poorly managed. They burned more cash per employee, had lower margins, very bad sales organization, etc.
NVidia got to where they are today by flooding the market with cheap cards. TNT Vantas, TNT2, GF2 MXes, etc. They did do not derive the majority of their revenue from DX8 capable cards. You might argue that people BUY Vanta's because of the GF4 owning the performance crown. I would argue that companies like Dell, Gateway, Compaq bought vantas because NVidia offered them a good price on a card that delivered the right features and performance for that market segment. The video card in the average business/home desktop in "invisible" to the user. I still see lots of Compaq PCs shipping with *Intel* integrated video (ugh).
I don't think consumers buying value PCs with value vidcards are making the choice based on the performance crown holder. They are buying the value PC because they are a very price sensitive buyer. The last time my sister (a CS major) bought a home PC for her family, she didn't even look at what video card it had. She went to a shopping website, found the cheapest PC with the amount of RAM, HD, and CPU she wanted.
TDFX didn't just miss deadlines, they were poorly managed. They burned more cash per employee, had lower margins, very bad sales organization, etc.
NVidia got to where they are today by flooding the market with cheap cards. TNT Vantas, TNT2, GF2 MXes, etc. They did do not derive the majority of their revenue from DX8 capable cards. You might argue that people BUY Vanta's because of the GF4 owning the performance crown. I would argue that companies like Dell, Gateway, Compaq bought vantas because NVidia offered them a good price on a card that delivered the right features and performance for that market segment. The video card in the average business/home desktop in "invisible" to the user. I still see lots of Compaq PCs shipping with *Intel* integrated video (ugh).
I don't think consumers buying value PCs with value vidcards are making the choice based on the performance crown holder. They are buying the value PC because they are a very price sensitive buyer. The last time my sister (a CS major) bought a home PC for her family, she didn't even look at what video card it had. She went to a shopping website, found the cheapest PC with the amount of RAM, HD, and CPU she wanted.
Look if you're going to chastise me for not looking at the 'facts'(the small point I made was factual however if you think otherwise prove it), and then counter with something totally made up on your part, you're doing what you accuse me of 1 sentence later.
I follow the stock I know whats happening with it, ATi was hammered to the tune of about 30% because of the CEO insider trading. Their earnings while good, showed that their margins weren't great, and they reduced guidance going forward. If earnings were two cents rosier ATi would have probably surpassed Nvda's stock price.
Nvda has reduced earnings and theres been brokerage talk about their revenue being stolen by ATi. They're an SP500 company thats made a lot of money for a lot of people, so they have a stock of goodwill still. Earnings are expected to be down but people are in denial somewhat, theres a lot of talk about perhaps the nForce 2 making up for the lost high end sales to ATi. If Nvda meets their earnings projections, I'll be surprised and congratulate them. In the longer term there are a lot of concerns about margins on the GF FX which supposedly uses a 12 layer board. Obviously going forward theres also concerns about Nvidia's ability to deliver parts on a timely basis.
Put all this in the context of the current crappy tech market and you have the current situation.
The stocks wouldnt be trading in tandem if the Ky Ho stock scandal hadn't occured, if that hadn't occured and theR350 did trump the GF FX then ATi would have taken the leadership position in this segment in the mind of investors which would have caused the stock to leapfrog Nvda.
The stocks have been trading in tandem almost exactly since last summer. You would expect the R300 shipping and the NV30 delay to have altered that, it didn't. You chalk it up to insider trading, I say, investors are looking to put their money elsewhere besides tech stocks in a glum market. You basically say "If X and Y hadn't happened, the prices wouldn't be moving in lockstep" I say "they were moving in lockstep before X and Y, and they are moving in lockstep after X and Y, so X and Y had little effect"
I saw the same curve back when the dotcom bust happened, you could graph Cisco, Sun, Oracle, Intel, and other equipment carriers and have them match up exactly. It simply did not matter what new products Cisco, Sun, Oracle, et al, had coming down the pipeline. Earnings performance didn't even matter, since people were looking at the next few quarter's.
Fact is, Nvidia is still delivering a better return on investment at the moment and their fundamentals are stronger. But in a down market, people are holding, or going where they can park their money.
I saw the same curve back when the dotcom bust happened, you could graph Cisco, Sun, Oracle, Intel, and other equipment carriers and have them match up exactly. It simply did not matter what new products Cisco, Sun, Oracle, et al, had coming down the pipeline. Earnings performance didn't even matter, since people were looking at the next few quarter's.
Fact is, Nvidia is still delivering a better return on investment at the moment and their fundamentals are stronger. But in a down market, people are holding, or going where they can park their money.
Fuz said:
With the exception of Windows (and that's another story), I haven't bought a MS product in years. What's more, I try to avoid using MS products whenever possible, not because I hate them, but because their products are just crap.
You're right about most people, but some of us put our money where our mouth is.
Fuz said:
I think it's more accurate to say that neither is a good investment at the moment, and anyone who bought Nvidia when it was sky high hopefully has sold before now. Otherwise I feel sorry for them. If people are parking money in Nvidia or ATi, they're making a bad mistake IMO. It's too difficult to see exactly how the PC market is going to recover (and I'm not sure it is), Intel is erroding their lower end sales, and in the case of Nvidia, ATi is erroding their higher end sales.
Doomtrooper
Veteran
Lets wait for Nvidias 4th quarter results...and Q1 2003..anyone that thinks Nvidia will be in the dominent position they were in has got to be joking, we have Intel taking up most of the integrated graphics market, Matrox, SIS, Trident and now VIA and PowerVR entering the market again with DX9 offerings.
ATI leading with execution, and I'm waiting to see ATI's Q1 2003 results.
ATI leading with execution, and I'm waiting to see ATI's Q1 2003 results.
Totally erroneous, if you'd bought ATi and Nvda 2 years ago, in terms of paper losses ATi is a much better company to have owned.
In my post I recognized that the overall tech market has a significant impact on both stocks, I'd have to be stupid not to. I don't chalk everything up to insider trading as you imply, but at a glance you can see the great impact that had on the stock, to deny that is ridiculous.
However, it is quite possible to grow in a down market if you grow at the expense of another company, which ATi is doing to Nvda. So to say that ATi and Nvda are joined is simply wrong, you're making an erroneous assumption based on your own opinions, ignoring the insider trading, and ATi's relative strength over the past couple of years compared to Nvda's meteroic drop.
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