Jon Peddie Q2 graphics market share report

[Bjorn]

This is really sort of amusing when I think back to the years between nV25 and nV40, in which nV proponents were assuring me that the only thing that did matter at all was the high-volume, low-performance markets the GF5200 was said to dominate--it being a "DX9" part and all... Wonder where that sentiment has gone today...?

I wonder, i wonder... Anyway, the point was that gaining marketshare isn't necessarily the most important thing if you do it by lowering your margins to much.

 

[Richthofen]

I wonder, i wonder... Anyway, the point was that gaining marketshare isn't necessarily the most important thing if you do it by lowering your margins to much.

which happened regarding ATI. Margins took a dive from 36 to 29% in the same timeframe i was talking about above.
Nvidia's all time low during the last years was at 27% during the FX timeframe. Now Nvidia is at around 37/38% approaching the 40% watermark.

That all mixed together indicates that ATI had a huge shift in customer demand from the mainstream/highend to the low end.
Another driver were IGP sales. They increased their business there by a decent amount.
But still fact remains that they lost customers in rather pricy segments which is the reason that they had such a horrible quater compared to the quaters before.

 

[martrox]

Spin........Scott MacCellan would be proud ;-)

 

[Maintank]

Pricing pressure from Nvidia have obviously erroded their margins.

Ill will be interesting to see what the 3rd qtr holds as Nvidia will have basically the entire quarter with the highend to themselves.

Nvidia could if they want to put more pressure on ATI keep dumping the 6800 series cards and drive ATI's margins down down down using the 7800 series to subsidize this.

 

[WaltC]

Really? So unlike 2002, Intel *IS* visible in 3D marketplace? And when did they make 2d-only chips? When this post was written, Intel's presence in the marketplace was primarily I740 derivative, which has always been "2d/3d chips, at least to some degree". Seems to me that the only thing that really changed since then was your faith in relevance of Jon Peddie's numbers.

By "Intel's influence" I mean influence with standards implementation--such as PCIe, AGP, USB, ad infintum.

Years ago--you couldn't *buy* a 3d chip because they hadn't been invented yet--but you could readily buy 2d chips from a wide variety of OEMs.

 

[WaltC]

well they missed their already 2 times cut down expectations for the last quater.
And their revenue was 78 Mio below the quater before and their profit stalled from around 60 Mio to a small loss. Further on they cut down their expectations for the remaining year.
Around 80 mio lower revenues in a 3 month timeframe is really big.
In contrast to that Nvidia was able to increase both - revenue and profits. They are now above ATIs numbers.

So while i think it is possible that ATI maintained overall marketshare its undeniable that they lost customers by a decent amount in price segments beginning at the GF6600GT level up to the ultra high end.

I still don't know what "80 mio" is. Sorry... Also, not hitting your quarterly "expectations" is much different from losing any money, AFAIK. Fortunately, corporate P&Ls do not include bonuses for meeting expecations nor minuses for missing them... They just are what they are in terms profit and loss. An "expectation" in and of itself has no financial substance.

As well, as I already mentioned, ATi "expected" the PCIe market to grow much faster than it did, hence the "expectations" you speak of. Since the PCIe market has grown much slower than ATi expected, what ATi made during the quarter, it seems to me, fits entirely within a reasonable expectation based on what the market actually did.

Again, falling short of your "expectations" does not mean losing money and going in the red--and indeed, had ATi not expensed out its employee stock options this quarter they'd actually have shown a profit, and that's even with them having overstimated (grossly, I think) the speed at which the PCIe market would grow in proportion to the much more mature AGP market already in place.

 

[Richthofen]

I still don't know what "80 mio" is. Sorry... Also, not hitting your quarterly "expectations" is much different from losing any money, AFAIK. Fortunately, corporate P&Ls do not include bonuses for meeting expecations nor minuses for missing them... They just are what they are in terms profit and loss. An "expectation" in and of itself has no financial substance.

As well, as I already mentioned, ATi "expected" the PCIe market to grow much faster than it did, hence the "expectations" you speak of. Since the PCIe market has grown much slower than ATi expected, what ATi made during the quarter, it seems to me, fits entirely within a reasonable expectation based on what the market actually did.

Again, falling short of your "expectations" does not mean losing money and going in the red--and indeed, had ATi not expensed out its employee stock options this quarter they'd actually have shown a profit, and that's even with them having overstimated (grossly, I think) the speed at which the PCIe market would grow in proportion to the much more mature AGP market already in place.

Of course they overestimated the PCI-express market but that simply is not the complete story.
Their revenues were lower by 80 million $ in a 3 month timeframe.
Their profits - while having higher expenses - did fall. Their margins took a dive from 36% to 29%. That simply is horrible if you consider that they still overall have a good product line. There are too many people around in forums saying that the stock options or higher R&D are responsible. That simply is not true and their cleary is no way to deny that the trend for ATI since last year is going down.
They lost customers in all segments beginning at the 6600GT level up tio the high and in both AGP and PCI-express market. Their dive in margins proves that. They had more low end demand in comparison to mainstream or high end demand.
And further on i find it rather interesting that while having a lower transistor count by a huge amount in most segments and having a manufacturing advantage in other segments (X800XL vs 6800GT) ATIs margins are decreasing fast while Nvidia now is approaching 40% which is a level they have never reached before. Their best year was during GF4 days. Back then they achieved 35% margins on GPUs but during FX days droped down to 27%. ATI now is 2% higher than Nvidia during its FX timeframe.
So there is a lot more wrong at ATI than what you said above. It's not PCI-express alone.
The whole X8xx/X7xx product line did worse than the GF6xxx line.