NVidia UMAP - Dictating Advertised Video Card Prices

[Jawed]

http://enthusiast.hardocp.com/article.html?art=MTUxOSwxLCxoZW50aHVzaWFzdA

Did you wonder why your GeForce purchasing experience may have changed? Have you wondered why you might have seen all cards priced the same or not priced at all?

Only in selected countries, I guess.

Timo Allison with NVIDIA has explained to us that,”So the reason we did it is we really wanted…it’s a marketing program really designed to give some clarity in our product stack…is how the product is advertised. There is a lot of confusion when there is a big delta in the minimum advertised price and the maximum advertised price, and consumers are confused on where that product should stack against the rest of the NVIDIA lineup. So the minimum advertised price policy is really designed to give some clarity in the product segmentation and really help the consumer see where those products are in relation to other NVIDIA products.”

NVidia has a confusing product stack. So to unravel the mess, force retailers to advertise at specified prices...

Timo went on to say, “We are in a highly competitive market place and we want to make sure our brand is perceived as how we have designed it to be perceived to be competitive, and by getting our stack clear in consumers’ minds and believe it helps give us the brand strength around those products. Also again, it is only an advertising program not a direct sales program.”

Just marketing?

This type of UMAP policy is illegal in Canada and in some countries in Europe. It seems to us that this type of UMAP policy would have been illegal in the United States up until September of 2007.

The article at HardOCP is quite detailed and includes the UMAP policy document.

Jawed

 

[digitalwanderer]

That was a great read, thanks. [H]ard really does some good industry write-ups at times.

 

[AlphaWolf]

I really don't get why Nvidia wants to annoy online shoppers, be interesting to see if there's any market reaction.

 

[Geo]

At first blush, that looks an awful lot like the kind of thing that lead the FTC to open a price fixing investigation in the graphics market awhile back. I wonder what happened to that.

 

[digitalwanderer]

But it's only between nVidia partners, doesn't that mitigate the monopoly effects a bit? I'd think AMD would have to be in the loop with this for it to be a big FTC deal, although I'm admittedly pretty ignorant about the law on such things.

Seems pretty stupid to me, tbh.

 

[Freak'n Big Panda]

What is the point of this exactly? Originally I thought that the minimum prices were going to be fixed across all retailers which would have actually made the product line a little bit less confusing (the fact that a 8800GT > 9600GT and 8800GTX ~= 9800GTX is still going to mislead tons of consumers though) but it seems the only thing they're doing is stopping the retailers from showing the prices until the customer adds the card to the cart... What does this achieve other than annoy shoppers? I really don't get it.

 

[digitalwanderer]

Places like pricewatch can't include those "cart prices" in their listing of stuff, nor can Newegg if you list the stuff by price low to high. (Which I happen to do a lot)

Not a huge deal no if you are a careful shopper, but it's another one where they're kind of taking advantage of the lazy shopper.

 

[Sxotty]

At first blush, that looks an awful lot like the kind of thing that lead the FTC to open a price fixing investigation in the graphics market awhile back. I wonder what happened to that.

Tons of companies do this, on Amazon you see it all the time on TVs and other stuff, but it is incredibly annoying.

I just bought a BFG 8800GT OC card for 130, but figuring the price was annoying as heck b/c all the sites make you add it to cart to see the price. Now I know why at least.

How can we fight this? I know you can simply not by Nvidia cards, but I would rather there was a way to communicate why not just that you did not get one. Otherwise they will not know why you decided not to purchase an NV card.

 

[digitalwanderer]

Write a letter to Derek Perez and Brian Burke about the matter, that's what I do whenever I feel the need to express meself to nVidia.

 

[Rufus]

It's kind of annoying, but I'm not sure how it's any different from any other MAP. I've been dealing with this exactly when looking for a new HDTV:

Why Don't We Show the Price?

Manufacturers sometimes ask that retailers not display a price if it drops below a certain amount. The "click here to see price" message indicates that the price of the item is so low that the manufacturer requested that it not be advertised (that is, displayed). In a brick-and-mortar store, you would probably have to ask a salesperson what the price of the product is. At Amazon, by clicking on "click here to see price" you are essentially asking to see the price, at which point we show it to you.

 

[Sxotty]

It's kind of annoying, but I'm not sure how it's any different from any other MAP. I've been dealing with this exactly when looking for a new HDTV:

I already pointed out that it is not something new and mentioned TVs and amazon

That isn't the point.

People get tortured in the world that doesn't mean I would not mind if I were tortured.

This MAP crap is annoying as hell. And it is annoying whether it is a HDTV or a graphics card. I don't want to deal with this crap.

 

[Freak'n Big Panda]

Maybe I'm being dense but what do manufacturers gain in doing this?

 

[3dilettante]

It could be an attempt keep decreasing prices on the higher segments from squashing the lower rungs, either by forcing price cuts on lower-margin SKUs or by hurting demand.

Maybe Nvidia doesn't like the compression of its margins, and a mismatch between unanticipated demand shifts versus the inventory and production mix that were planned in advance.

 

[jimmyjames123]

At first blush, that looks an awful lot like the kind of thing that lead the FTC to open a price fixing investigation in the graphics market awhile back. I wonder what happened to that.

It's not really price fixing. NVIDIA is still allowing e-tailers to sell NV cards for whatever $ amount the e-tailers want to, NVIDIA just wants them to advertise cards at MSRP.

I know that it's kind of annoying for the consumer at first glance, but I can see why NVIDIA would want to set up UMAP. Under the old system, any random e-tailer that carries NVIDIA can take sales and attention away from other e-tailers by constantly undercutting their advertised prices (even when cards are out of stock) and showing up at the top position in pricewatch and pricegrabber search engines. Even at any one e-tailer, one particular brand of NV cards like XFX might consistently tend to be advertised at a lower price than another brand like BFG (for whatever reason), which puts the latter at a big disadvantage too.

Consumers always tend to gravitate towards the cheapest card. So NVIDIA is trying to encourage consumers to do something different and choose a card based on something other than what happens to be the cheapest card of the bunch. So now the consumer has to actually do some research and compare card appearance/warranty/features/vendor service/vendor quality and reputation/etc. This ends up being good not just for the customer, but for the NV card vendors who have more incentive to out-innovate each other and gain the attention of buyers.

When I first heard about this UMAP, I thought it was a little dubious and sketchy, but the more I thought about it the more I realized that there are some good benefits that can come out of it, not just for the consumers but also for the AIB partners.

 

[digitalwanderer]

 

[jimmyjames123]

Ok, maybe it's not good for the consumer who is a lazy shopper! But in general it's a good thing when people take their time and do research on the internet in order to figure out what card and what vendor to go with.

Don't get me wrong, as a lazy shopper myself, I liked the older system better too because it was very easy to find the lowest price out there for any given card

I don't think NVIDIA was very concerned about the consumers, but rather was more concerned about giving each and every AIB partner and each and every e-tailer a fair and fighting chance without having them cutting each other down based on lowest advertised price.

 

[AlphaWolf]

Sure and perhaps nvidia can stop online sales altogether and you'll have to walk to the store to buy their products. It'll be great for consumers because it will force them all to get some exercise.

I've no doubt Nvidia wants to help out the AIB's so they can protect their own margins. Discouraging competition rarely winds up being good for the consumer.

 

[Sxotty]

If XFX sells cards more cheaply than BFG and they have a superior warranty, customers like them, they include a bundle, and they are cheaper on top of it why should consumers not see that immediately?

That is the entire point of a free market to have competition. If one AIB can undercut all others and has superior service why not reward them?

I just bought a BFG card BTW.

This thing is just dumb, as are their number schemes.

It is difficult to make it work though when they change generations.

It would be easier perhaps if they had two parts.

XX
YY

Where X was generation
Y was performance category in generation.

I know they already do this like XY though. A better idea is just to give up on clueless people buying at Best Buy etc...

 

[Tchock]

Actually, Geforce "A", "B", "C" till "Z" would have been the easiest solution. Of course, the sub-gen with numericals aka Geforce A800.

26 generations, imagine that!

 

[neliz]

Hell, if it worked in Soviet Russia, it works all around the world.

On the other hand, I'm happy this shit nVidia is pulling is illegal in europe.

nVidia's damage repair team up here might say it's "good for consumers" but what if this was about text messages and cellulair operators?
"Sure, we have 5 operators, but they're all running on the same network and the "network provider" dictates that the price of a text message is 10 cents."

Why would a partner invest in branding if it's not allowed to set it's own prices? Hell.. if nVidia wants it their way, they'd put the FX5200 back on the shelve and sell it for $299 and consumers would still buy.

Sure it's all good for AIB's but it'd be great for the government if all products were taxed with 100% VAT and it'd be great for stores if they'd made 300% margin on it. The UMAP directive is a slap in the face of the free trade market and in my humble opinion the FTC should hand out EU/Microsoft level fines.