I think you've summarized what has been obvious (at least to me) for most of the last year: nVidia is simply a very poorly managed company. It often surprises people to discover that some technology companies really have no clue from one day to the next where they are going and are so poorly organized and managed that middle management is often in wide disagreement concerning product schedules, yield targets, etc. Like other poorly managed companies, there are just too many middle managers in nVidia, who have too much individual latitude. Turf wars, and turf protection and self defense, abound, and that's a lot of why things seem so disjointed to outsiders, and even to low-level employees of the company.
nVidia seems to me to be suffering from the same kind of delusions that afflicted, and crippled, 3dfx management in 1999. Like 3dfx, nVidia has grown way too fast for its own good, and like 3dfx in 1999, nVidia in 2002 assumed many things about its "position" in the 3d-chip marketplace that simply were never true to begin with.
When we realize that it was late in 1998 when nVidia shipped the TNT, just five years ago, and when we consider the massive fiscal growth of the company since that time, which was fueled in large part by a grossly overblown stock capitalization appreciation that occurred when M$ tapped nVidia for xBox, not to mention the implosion and demise of its strongest competitor of the time, 3dfx, it's easy to see how such rapid growth lead to the current state of hubris within nVidia. It's a classic example of how power corrupts, and absolute power corrupts absolutely (although I might amend that in these cases to "power & money" doing the corrupting.)
A corporation is never any stronger than the people who run it, it should never be forgotten. Whatever weaknesses they have will be reflected in the corporation as a whole. In the case of nVidia, I agree with you that the problem begins at the top and spreads outward and downward from there throughout the pyramidal structure of the company. If a company has 1,000 employees and 999 of them are right about something, but the guy at the top is wrong and overrules them, then all 1,000 employees must eventually pay for it.
There's an insidious idea at work here (nVidia, again, will not be the first or last company to be so afflicted) which is at the core of the canker eating away the heart of the company. The cancerous concept at work here might be paraphrased like this: "We are so rich and influential that it must be Manifest Destiny which has put us here, and therefore nothing in this world can topple us."
It's a grand, but all too common delusion among corporations which grow far too fast. 3dfx, for instance, believed its position so secure that it could dramatically change its business model, move its emphasis from products to a primary reliance on brand recognition, throw away millions of dollars in a variety of ways, and yet remain dominant and "number one" at the end of the day. 3dfx upper management obviously did not have a clue as to what had made the company successful in the past, and was full of all kinds of amusing ideas about how it would remain successful in the future (and how other companies would fail.)
nVidia today is no different, it seems to me, regarding the centrality of this delusion in so far as how it affects the day-to-day operation of the company. Brand is always a strong element in the marketplace; however, it can also become a double-edged sword, especially when people perceive products associated with the brand as inferior. Such has always been the case for Apple Computer in the general computer marketplace, and prior to R300 & the Catalysts, was very much the case for ATi as well in the 3d-chip markets.
Indeed, the "3dfx" brand awareness has survived long after the company itself (a fact which did and does 3dfx no good whatsoever...
) So when I hear JHH making statements about the "nVidia brand" driving his products into the market, with apparently no understanding that it was the products themselves which drove the brand, I just have to shake my head and think, "Shades of 3dfx." This is one of the management "snafus" of perception that I have learned to look for when attempting to discover key facts about a given technology-product company's management. If they don't understand that the product drives the brand, not the other way around, then they don't understand anything, IMO. nVidia appears to be able to apprehend this no better than 3dfx was able to do it, and so it won't surprise me to see nVidia follow, eventually, in 3dfx's footsteps.
If we take the leading 3d-chip/gpu design companies of the last five years, nVidia, 3dfx, and ATi, what's interesting are some fundamental differences that I've observed. Whereas 3dfx seemed and now nVidia seems thoroughly entranced by the Manifest Destiny delusion, it certainly appears as if ATi has mercifully been spared it. Perhaps it is because ATi has been in business much longer than either company, and has had to endure years of struggling in the 3d-chip marketplace as a "second-string" player always struggling to become competitive with either 3dfx or nVidia, depending on which time frame prior to R300 you might look at. I think it's possible being in this position for so long has seasoned ATi to a degree that neither 3dfx or nVidia management ever enjoyed. As the result of its experience, ATi was able to examine itself and actually execute on the kinds of changes it needed to make to improve itself dramatically with respect to both its competition and the needs and desires of its markets. 3dfx was unable to do this, but rather expected its markets to change to accomodate it, instead. And it certainly seems as if nVidia is no different.
A good example of the major differences in corporate philosophy I think is the participation of ATi employees all year long in forums around the Internet, in which they take the time to answer questions and to read about the kinds of things the people who drive their markets are saying they'd like to see. They participate as individuals, and they often respond very quickly to situations they read about in various forums on the Internet. Contrast this to nVidia's "closed shop" approach where everything has to be a part of a formal PR delivery, and the fact that few if any of nVidia's employees engage anybody in their end markets in a dialogue. Big, big difference.
I think it stems from some fundamental misunderstandings of the type I allude to above. nVidia doesn't see "you & I" as its "customers." It sees its board OEMs as its only customers, and apparently feels that "you & I" aren't really interested in products--that what we want is to buy a brand name, instead of a product with discrete functionality and good software support. It's hard to imagine how a company can get more out of touch with its markets than that. nVidia management apparently feels that "if the brand is driven correctly" by its OEMs into the marketplace, that end users won't care about product performance and feature support, but will buy based on brand perception. That's a really brazen philosophy, mainly because it is so wrong on so many levels. At the very best, it is only partially true, some of the time.
For instance, how a rational player in the 3d-chip & gaming marketplace might ever think that to announce it was considering reducing the frequency of its driver releases from an already subpar number of "quarterly" to "one per year" might positively influence either its OEM partners or its end-user base toward their products is quite beyond me. And yet, evidently, this kind of thing presents no difficulty to nVidia management, apparently because it has become fixated on the falsehood that people buy nVidia for love of the brand instead of love of product performance, functionality, and driver support. How is it possible for people to become so confused?
"Manifest Destiny," is an alluring, seductive philosophy which has promised many nations, corporations, and individuals many things throughout history, but has much more often than not failed to deliver on them. It's a delusion, like any other, and as human beings some of us are simply more prone to such things than others, is the way I see it.
