Graphics Chip 4th Quarter Numbers

That Q3 and Q4 will be good compared to Q1 and Q2 is likely based on the assumption that 40nm lithography will bring new line-ups of GPUs that are very attractive compared to what was offered on 65/55nm. However, the other side of that coin is that neither AMD nor nVidia is likely to be able to bring anything particularly new or attractive to the table until they can ship those 40nm parts. Combine that with the economic downturn, and the next six months are likely to be atrocious.

 

3 and 4 Qs are traditionally seasonally stronger then 1 and 2, so it's kind of expected by evertbody that the lowest point of recession will be the first two quarters while the the second half of 2009 will be better although probably still worse then the second half of 2008.

 

Tradition didn't count for much this year though... the market drop of the last quarter was, according to those numbers, 34%! Again, Q3 is when we might see less expensive (and lower performance) i5 Nehalems, and wider 40nm GPU availability, so somewhere around there we should see the market improve, but
a, that would be relative to Q1 and Q2 which look as if they could be terrible, and
b, such a concurrent platform/GPU step as Q3/Q4 will bring is a rare event, and the corresponding sales peak isn't sustainable.

I've long been critical of the way the graphics giants approach the market, it will be interesting to see if the upcoming year brings a change.

 

What kind of change are you looking for and what "approach" are you referring to?

 

Looking at these numbers. I have to wonder if the price cuts we've seen this year have been overall good for the industry itself. I'm not disputing the consumer has had some great deals floating around lately. But I do question whether the industry as a whole has benefited from it. It seems profits are down for every company right now and market share certainly has not shifted a whole lot.

 

Market share certainly hasnt shifted much as a result but sales may have been significantly lower without the price cuts.

 

To be precise, even though NV seems to be quite lucky that G9X and G8X chips are doing very well on keeping their share on the bigger mainstream segment, I think the "new enthusiast" segment did saw significant shifts in favor of ATI. But the economic crysis seems to have more impact on the later segment. Which in turn brought ATI a bigger % drops in their Q4 numbers.

 

Looking at that the market share paints a much brighter picture for Nvidia than otherwise would be the case.

While everyone lost year to year, Nvidia (out of the big 3 of Nvidia, ATi, Intel) took it on the chin.

ATI saw growth (shipments) decline -23.8% while gaining a scant 1.0% marketshare year on year.
Nvidia saw growth (shipments) decline -34.3% while losing 2.9% marketshare year on year

The increased performance (relative to ATI) in the 4th quarter due to being more (retail) cost competitive was still not enough to prevent them from losing some share to both ATI and Intel over fiscal 2008.

Right there (qtr-qtr) you can see the effects of Nvidia slashing their margins in order to maintain marketshare in the face of a strong 48xx lineup from ATI. Intel as usual weathered things rather well as there isn't a lot of pressure on their IGPs.

And the smaller players ouch. Are they even going to be able to survive this recession?

Is there somewhere with a link to Nvidia's 4th quarter financials? Was it posted somewhere on the boards here and I missed it?

Regards,
SB

 

The results for Q4 2009 (Financial year) will be released on tuesday next week (10/2 (european notation)).
They have previously warned about a decline of 40% to 50% from Q3 2009 (Financial year).

 

Market share means more than just revenue/profit, IMO. Install base majority ensures that developers put compatibility issues with your hardware on their top priority list. And also a bargain point to sell your technologies, especially in the era when the GPGPU war has just begin to take place. To name just a few.

 

Umm, that's all we're discussing here is marketshare and the growth of marketshare.

The relative order hasn't changed, Intel > Nvidia > ATI.

However, while Intel and ATI gained marketshare, Nvidia still lost marketshare. And it would have been much worse for Nvidia if they hadn't slashed margins in order to stop the bleeding. As the 3Q-4Q comparison shows, it was very effective in that they regained some of that lost marketshare.

Apparently next week we'll get to find out revenue/profit numbers and see how this all ties in.

Regards,
SB

 

I can see that. And I guess it depends on what margin's are. As far as other comments. Its obvious Nvidia's margin's are not as great due to the radical price cuts. I'm simply suggesting that nobody except the consumer is really benefiting from them. AMD doesn't seem to be really benefiting from them either. ((their losses may be smaller but they're still losses)),

I didnt really consider the Intel factor. But I was merely speculating as to the point of margins verses units sold verses money made. Lets say in theory we still had GTX 260 for 400 dollars and the 4870 was being sold for 400 dollars. And AMD/Nvidia still sold roughly 70% as many units as they are selling now. Would AMD/Nvidia be in any better shape?

From a perspective of hardware quality. I have already noticed that "some of the fat" has been trimmed in the design of current GPUS verses last years GPUS. Have very little doubt that this is related to keeping cost down to keep GPU prices competitive.

- Hybrid Power removed from modern GPUs. Probably not a big deal to most. But its just one of those things trimmed

-Card design inferior to last year. 9800GX2 verses GTX 295. The cooler is in fact superior. But the loss of backplate/covering obviously is a design choice. Look at the EVGA backplate. It clearly could have been added to the reference design. But I'm sure it was a cost thing. I see the same thing with the GTX 280 verses GTX 295. No backplate. Less GPU protective coverings. Ect. I dont believe for example the GTX 280's backplate is all that beneficial to its cooling. But it sure is nice protective casing.

That being said. Both of these cards are improved on the performance factor verses the other designs. But during the price wars this is something I'm gonna watch closely as the next few GPUS get released. How card/quality design is affected by the price wars overall. Most of these things are "minor" things that most consumers probably wont notice. So long as they're winning the graph wars. I just hope the standard doesn't keep going down here. IMO there should be perks to buying "high end" beyond just performance for the enthusiast.

 

I couldn't agree more. It's no doubt both ATI/AMD and Nvidia would be better off from a losses standpoint if they hadn't engaged in the price war however...

It's a game of chicken right now, and who is going to blink first. Whoever does risks giving the other a leg up in marketshare and sales.

I've been hinting for a while that what appears to be best for the consumer right now (incredibly low prices for exceptional power) may not be best for the consumer in the long run. Especially if it impedes either quality or ability to implement new features.

Odd that you noticed those things about quality ChrisRay...

I was just thinking to myself that with the 48xx series ATI's quality and build quality actually went up. The cards (at least the ones I've seen and the one I have) now have extra reinforcing pieces to prevent card flexing. It adds a bit of weight to the 4870's but I certainly feel safer with them there.

Neither the 3870 nor the 2900 had this even though they all feature coolers that are basically about the same weight.

Regards,
SB

 

well during recessions prices don't really help much to garner marketshare. Rather they hurt the industry as a whole.

http://businessedge.michcpa.org/issue/article.aspx?i=v5n10&a=350&s=MI

check number 4, thats exactly what AMD is doing right now

Interesting quotes from the article

Dr. Read Holden and Mark Burton, have done number of articles and books on recessions and market pricing, they also havea company called Holden Advisors that specifically looks into this.

I agree it was great for consumers but thats only nice if the industry doesn't get hurt. My view AMD misread the economic crysis as did many others.

This is the same thing that is happeing with the American car companies, they are discounting their cars to the point they are taking losses and hoping to get money back on financing, but who is buying? In turn it forces all other companies to drop prices too.

 

They way i remember HD2900 XT is with an l-shaped black metal covering over part of it's back (and a look at the card resting in my inventory confirms that memory). As for the HD3870, my memorie's a little blurred, but wasn't its GPU-cooler separated from the metal thingie resting on the GDDR4-chips, acting as a supportive piece also?

 

I just looked at both of my 2900's and my 3870 and neither are well reinforced as the 4870.

The 4870 also feels more solid. But that's probably just due to the extra weight of the reinforcing bar along the top of the card.

EDIT - see if this works...

The 3870
http://www.newegg.com/Product/ShowI...HD 3870 H387QS512NP IceQ3 Video Card - Retail

The 4870 - Notice the reinforcing metal bits along the top.
http://www.newegg.com/Product/ShowI... Radeon HD 4870 H487F512P Video Card - Retail

Regards,
SB

 

hmm , US car companies are selling at losses to gain marketshare, they have done this for the past few years even before the recession and they are stretching even more now. I'm talking more from a higher level, of what lowering prices to gain marketshare does to the market in a recession.

If you look at GMAC profits form last year they were making 3+ billion per quarter and GM was losing 2 billion per quarter, interesting? It gets even better as look at numerous years and with the recession what has happened now.

When the markets are down, lowering prices, you end up fighting yourself and not competitors, marketshare isn't affected by price cuts durning a recession, it has an opposite effect in the long term.