Terrible news for Nvidia
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Yuks aplenty:
Surprising, considering how well the 6800 has been received, and especially considering how the stock practically exploded when the much less impressive FX debuted. Then again, I guess a few hundred to a few thousand units won't exactly keep a company afloat. They need low- and mid-range GF6 products, stat.
Meh, I don't follow nV's financials enough to know what went wrong. Lower nF2 sales? Xbox sales?
When will we see an nF3 with integrated GF6 and Soundstorm 2?
Surprising, considering how well the 6800 has been received, and especially considering how the stock practically exploded when the much less impressive FX debuted. Then again, I guess a few hundred to a few thousand units won't exactly keep a company afloat. They need low- and mid-range GF6 products, stat.
Meh, I don't follow nV's financials enough to know what went wrong. Lower nF2 sales? Xbox sales?
When will we see an nF3 with integrated GF6 and Soundstorm 2?
Thunderbird
Newcomer
Hmm. What struck me was the blame on Intel.
They're saying that the recall of Intel's chipset (which AFAIK was only a small numer of chips because of a manufacturing problem) meant there was no demand for their product. I don't really see how this could have effected them that much, looks more like a scape goat.
Oh and if the recall "effectively froze" the high-end desktop graphics segment it will be interesting to see if Ati encounterd this as well.
They're saying that the recall of Intel's chipset (which AFAIK was only a small numer of chips because of a manufacturing problem) meant there was no demand for their product. I don't really see how this could have effected them that much, looks more like a scape goat.
Oh and if the recall "effectively froze" the high-end desktop graphics segment it will be interesting to see if Ati encounterd this as well.
Actually, that is a somewhat curious statement, seeing as the market share losses came from Intel, which is what caused the pricing pressures on 5200 - the stall of the 915 chipset probably helped them here as they integrated graphics are even more capable / competetive against 5200 here than the previous integrated graphics from Intel.
I think you're right about the 6800... it's a capable card and has been well received but there's simply not enough of them. They need to get nv41 and other lower end nv4x's out in quantity. Ati got where they are now by capturing the high end and then working tech down to lower end products. (And it's still usable on lower end boards... no one debates if the rv3x0 are dx 9 or not.) nVidia needs to do something similar.Pete said:
In the linked article, they mention the number of desktop cards sold is down by 17%. That's their core problem... the FX fiasco has finally caught up with them. They should've made the 5200 fast enough to compete with the 4ti, even if it meant they'd have to drop it's so called "dx 9 features" from the marketing bullet points.
Besides the low end, I wonder if losing all the largest pci-express oem's is hurting revenue already.
I just wish they'd make Soundstorm audio cards. Creative Labs, even with their reputation for mediocrity, has a monopoly on the gaming soundcard market.
EDIT: I'd like to add, I'm not surprised this happened. I'm surprised that it happened now; it should've happened last year.
One more thought... it's going to take more then awesome Doom 3 performance to turn this around.
Perhaps a licensing deal instead? That would certainly bring in more cash than competing with the defacto leader in sound cards.
(edit: license the encoding/decoding of DD5.1 in real time and perhaps extend that to 6.1, 8.1)
nVidia would have to bring in a TWIMTBH program to take over game devs in the sound department
The Way It's Meant To Be Heard
and if they did I hope like heck they don't force a second advertisement at the beginning of games. PurplePigeon
Newcomer
Both Accounts Receivable and Inventories were noticeably higher when you compare Q1 to Q2.
Q1 (ending April 2004):
Revenues: 471 905
Account receivable: 208 308
Inventories: 234 796
Q2 (ending July 2004):
Revenues: 456 061
Accounts receivable: 246 396
Inventories: 266 985
Does seem to suggest some product transition problems. Kind of reminds one of the "channel stuffing" that ATI did a number of years ago.
This article from digitimes a couple of days ago gives further information about nVidia's situation:
http://www.digitimes.com/news/a20040803A7043.html
Don't know the extent of how Doom 3 will affect the current quarter, but if nVidia was discounting chips at the end of the previous quarter in order to boost their Q2 numbers, the graphics card manufacturers may not need to buy as many chips for Q3, of course depending on how demand plays out. The somewhat high accounts receivable number does kind of hint that more chips were bought at the end of quarter.
Q1 (ending April 2004):
Revenues: 471 905
Account receivable: 208 308
Inventories: 234 796
Q2 (ending July 2004):
Revenues: 456 061
Accounts receivable: 246 396
Inventories: 266 985
Does seem to suggest some product transition problems. Kind of reminds one of the "channel stuffing" that ATI did a number of years ago.
This article from digitimes a couple of days ago gives further information about nVidia's situation:
http://www.digitimes.com/news/a20040803A7043.html
Don't know the extent of how Doom 3 will affect the current quarter, but if nVidia was discounting chips at the end of the previous quarter in order to boost their Q2 numbers, the graphics card manufacturers may not need to buy as many chips for Q3, of course depending on how demand plays out. The somewhat high accounts receivable number does kind of hint that more chips were bought at the end of quarter.
I think doom3 will boost their earnings big time in the next quarter, I've had a tonne of clan friends ask for card advice recently because they want a beefier card to doom3. I think availability problems and the fact the pc games market recently has been so flat is reason for the big drop. But with doom3 out now and HL2 looking close to being finished, i'd expect to see a big sales spike in hardware sales.
NVDA simply had its lunch eaten in the low-end market. They were far too highly dependent on FX5200 sales to make their numbers, and they got trampled by Intel integrated +/- ATI's latest low-end DX8 offerings.
Yes, ramping NV40 shipments will help avoid another dreadful quarter, but guidance was less than optimistic, especially for their core PC business. Jen-Hsun was a subdued and exasperated CEO on that conference call tonight. He even blurted out that the AMD discrete chipset business has become unattractive because of pricing pressure.
Frankly astounding that the CFO and CEO didn't see the need to issue a warning. The street is going to have their buns on a skewer.
Yes, ramping NV40 shipments will help avoid another dreadful quarter, but guidance was less than optimistic, especially for their core PC business. Jen-Hsun was a subdued and exasperated CEO on that conference call tonight. He even blurted out that the AMD discrete chipset business has become unattractive because of pricing pressure.
Frankly astounding that the CFO and CEO didn't see the need to issue a warning. The street is going to have their buns on a skewer.
Joe DeFuria
Legend
Mr.Sparkle
Newcomer
Joe DeFuria said:
Yea I was just looking at it Joe, it's 9.80 right now. Down 4.76! SELL! SELL!
Johnny Rotten
Regular
This is, quite simply, may 2003 through may 2004 finally coming home to roost.
Bouncing Zabaglione Bros.
Legend
Wasn't there something a couple of months back about Nvidia not showing all costs correctly? This isn't just for Nvidia, but many other companies are having to move over to declaring costs they they did not used to report. For instance, you pay your people smaller salaries and give them share options instead. The former is declared and the latter isn't, making your costs look lower, and not including the devaluing effect of share splits.
IIRC, Nvidia said they would switch over to the new way of showing these hidden costs, but it turns out that last year's hidden costs would have all but wiped out their profits. I guess Nvidia isn't doing as well as we all thought.
IIRC, Nvidia said they would switch over to the new way of showing these hidden costs, but it turns out that last year's hidden costs would have all but wiped out their profits. I guess Nvidia isn't doing as well as we all thought.
I wonder if around now would be a good time to buy some NV stock? This presupposes that the NV43 and their other lower-end chips prove popular in the marketplace and the hype generated by Doom3 influences many to purchase NV chips.
(Not that I've got any spare cash to invest myself)
(Not that I've got any spare cash to invest myself)
Joe DeFuria said:
Yea this is after a 50% drop over the past couple of months. Nvidia is getting obliterated. I went to the forums at Yahoo and a couple of people were saying they were in tears.
One guy lost $200K today on Nvidia today alone, his entire yearly stock profit. That's gotta hurt.
