I think we agree, that's just semantics. What defines the market segment once the product is released is its price; but if you want to actually make money, what determines its price is performance. The reason I looked at it that way is that AP was suggesting Intel would squeeze NVIDIA out of the mid-range; my arguement was that this can only happen if Intel is competitive on performance-per-$, because otherwise their parts simply won't sell.
Sure. I'd point out thought that Intel has the advantage of bundling GPU with CPU.
Sorry to be the Devil's Advocate, but both Intel and AMD's Fusion-like graphics products in 2009 are 3 chips/2 packages architectures. NVIDIA has been 2 chips/2 packages (including the CPU) since Q3 2006 for AMD and Q3 2007 for Intel.
I dont think the 3 chip versus 2 chip argument is compelling. The cost to a system builder is largely a function of the package, rather than # of dice. An extra discrete in the system costs a lot more...simply moving a few million transistors from one side to another doesn't change the cost for a system vendor much.
Additionally, I think this is the kind of situation that Intel is very good at exploiting. Once upon a time there used to be discrete network cards for desktops...but that got sucked into the chipset.
The only point to doing it this way is to save about ~1 dollar and >=1 watt on the bus. That feels like a very backwards way to handle the problem given some of the very interesting advances in bus technology in the last few years. Actually, there's another slightly more cynical reason in Intel's case: they'd probably like to manufacture southbridges at Dalian/China on an old process instead.
Perhaps. Also, no matter what happens - going across a bus is a fundamentally expensive exercise in terms of power. The more localized your data transfers the cooler the system.
EDIT: Of course, in the longer-term, I agree on-CPU-chip integration makes the most sense. But that's not what either of those companies will do in 2009 apparently, let alone 2008. Well, unless AMD is being more aggressive than their latest public roadmaps imply, that'd be interesting...
Fair enough.
But volume doesn't really matter. Right now, the gross profit in the >=$150 segment of the market is significantly higher than in the <$150 segment of the market. I only expect this to become more true over time as other components become less expensive for a mid-range gaming PC (CPU, DRAM, Chipset, etc.)
Volume always matters. We've discussed this at RWT, and I doubt either of our views have changed over the last few weeks (although I'm hoping your's have : ) ).
Just because NVIDIA is fabless does not mean they don't worry about volume. There are still the costs associated with tools, developing your custom circuit libraries, etc. etc.
That's exactly the dynamic that I suspect happened in 1H07 when NVIDIA surprised everyone with incredibly strong earnings despite weak seasonality. DRAM prices crashed and CPU prices kept getting lower, so for a given segment of the market the GPU's ASPs went up.
So you believe that lower CPU prices --> consumers spend more on GPUs?
It's not strictly unimaginable, but I'm very skeptical of that. As I said, it's all about performance-per-dollar (and per-watt) both at the high-end *and* the low-end. If they can't win in the high-end, then the only place where they could still win is in the commodity 'performance doesn't matter' market. And honestly, I don't think Jen-Hsun cares:
The problem is that a lot of people don't care about graphics performance. If in 5 years from now, 90% of the people are satisfied with integrated graphics, that's a really bad position to be in.
DK