Terrible news for Nvidia
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Doomtrooper
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I don't play 'The Sims', and X800 sales make up 1% of the overall market... what I'm saying is one game will not make a difference.
According to a survey conducted by NPD last summer, 44% of sales came from graphics cards less than $100, while 39% spent up to $149.
9% of sales were between $150 and $249, while just 1% came from graphics cards above $350, obviousally we’re talking about a very small portion of the graphics market.
According to a survey conducted by NPD last summer, 44% of sales came from graphics cards less than $100, while 39% spent up to $149.
9% of sales were between $150 and $249, while just 1% came from graphics cards above $350, obviousally we’re talking about a very small portion of the graphics market.
They had a 36 % decrease in 5200 sales. They said it was because of intel chipsets but grandstale was not even available.... There is no reason to believe a short term rebound. And by the way it is very fun to read analysts (when you did not buy according to them of course) that were on buy for nvidia until CC 
Considering how many people keep saying that even low quality graphics on D3 look very good, people who try it out before performing HW upgrades might not bother (I have yet to try it myself on my MR9000).
True, while one quarter won't annihilate nvidia (it'll take a lot for that to happen; as mentioned even ATI hung in there for a long time) you can't simply ignore this and write it off as nothing big. Earnings were reported as 3c per share, vs 14c year over year and an expected 15c this year. That's a huge drop, and it means something's keeping nvidia from getting its products sold (largely already covered here)
Now what I wonder is what the availability of HL2 will do for sales of each company. We already know that 6800GTs are in high demand from D3; will X800s be highly demanded after HL2?
True, while one quarter won't annihilate nvidia (it'll take a lot for that to happen; as mentioned even ATI hung in there for a long time) you can't simply ignore this and write it off as nothing big. Earnings were reported as 3c per share, vs 14c year over year and an expected 15c this year. That's a huge drop, and it means something's keeping nvidia from getting its products sold (largely already covered here)
Now what I wonder is what the availability of HL2 will do for sales of each company. We already know that 6800GTs are in high demand from D3; will X800s be highly demanded after HL2?
If the channel was stuffed with heavily demanded 6800 parts to sop up the Doom 3 gravy, Nvidia wouldnt have dropped 30%+ in one day.
The tapdance that Jen-Hsung did around the 6800 should have told the tale. Not one question got through regarding 6800 production numbers or volume, yes that omission tells a tale.
The tapdance that Jen-Hsung did around the 6800 should have told the tale. Not one question got through regarding 6800 production numbers or volume, yes that omission tells a tale.
NVIDIA had a weak 2Q for a variety of reasons, and I think that many have it upon a large portion of it by pointing out the disappointing FX 5200/5500 sales. Have a 30%+ drop in sales on that single product itself certainly explains the shortcoming (and increase in inventory).
As for the channel being stuffed with 6800 parts, it is true and not true. Looking around at major distributors (those that provide the majority of parts for Tier 2 and Tier 3 OEM's), there are good quantities of the vanilla GeForce 6800, while supply is tight for the 6800 GT and 6800 Ultra. Having good quantities of the GF 6800 is a very good thing, because at the $299 pricepoint many more of these will be sold than the $399 GT and the $499 Ultra! The main weakness of the $299 GF 6800 is that it is usually stocked with only 128 MB of memory. The competing 9800 Pro at that price point has 256 MB. OEM's love checklists, and having a higher priced card that has more memory than another similarly priced card will sell them more often than not. I think it was serious mistake by NVIDIA to spec out the GF6800 with only 128 MB at the $299 price point. If NVIDIA wants to gain any OEM support for the GF6800, then it really should push its partners towards providing 256 MB of memory on that $299 board.
As for the channel being stuffed with 6800 parts, it is true and not true. Looking around at major distributors (those that provide the majority of parts for Tier 2 and Tier 3 OEM's), there are good quantities of the vanilla GeForce 6800, while supply is tight for the 6800 GT and 6800 Ultra. Having good quantities of the GF 6800 is a very good thing, because at the $299 pricepoint many more of these will be sold than the $399 GT and the $499 Ultra! The main weakness of the $299 GF 6800 is that it is usually stocked with only 128 MB of memory. The competing 9800 Pro at that price point has 256 MB. OEM's love checklists, and having a higher priced card that has more memory than another similarly priced card will sell them more often than not. I think it was serious mistake by NVIDIA to spec out the GF6800 with only 128 MB at the $299 price point. If NVIDIA wants to gain any OEM support for the GF6800, then it really should push its partners towards providing 256 MB of memory on that $299 board.
Doomtrooper
Veteran
The scary thought is - if you look at the market cap differentiation between ATI and NVIDIA, at these levels NVIDIA is potentially a purchase target for ATI...
JoshMST said:
Heh, Josh...
No, indeed, the sky isn't falling--nVidia's falling, is what the article is describing. This downturn started back in the 3rd calendar quarter in '02 and has intensified ever since. It usually takes several quarters after a downturn begins before a firm runs out of bookkeeping tricks used to camouflage the negatives (in the hopes that things can be turned around during the interim. nVidia wasn't able to do that.) Note as well that the reverse is true--a company has to consistently do well for several consecutive quarters before the impact really begins to affect the share price. nVidia had a terrible year last year with respect to nV30 (cancelled) and then nV35/8 yields--the whole...year...long. Those problems were exacerbated and amplified greatly by the fact that ATi wasn't having similar problems and was rabidly eating away marketshare that prior to 09/'02 nVidia had more or less figured was its to keep in perpetuity. In other words, the sky started falling on nVidia almost two years ago but the results are only now starting to manifest in the general investor appreciation of the company's stock.
The real problem for nVidia, quite aside from yields, even, is system OEM concerns. It's just remarkable to me that nVidia management was completely unable to see that its "Ultra" reference designs since nV30 inclusive, have been the opposite of what system OEMs desire in this kind of product. Having seen 3dfx implode before its very eyes because its V5 reference designs were decidedly non-OEM friendly (physically too big and drawing too much power at the time), you'd think that nVidia management would have been able to understand why it succeeded with system OEMs at the time and why 3dfx failed.
Compared to the V5, nVidia's reference designs at the time were far more OEM-friendly, and that's where 3dfx got clobbered. Today, strangely enough, ATi is where nVidia was then, and nVidia is where 3dfx was then, with respect to the appeal of its reference designs to the system OEMs (like Dell) who have the power to order tens or even hundreds of thousands of them at a time.
The system OEMs don't give a flip about "Doom 3 benchmarks" or bar charts, etc. They do care a lot about the physical size and weight of the reference designs, power requirements, heat dissipation, and so on, however. So when you consider the fact that right now practically the only game benchmarks ATi has any trouble with at all versus nVidia 3d reference designs is D3--a game capped at 60 fps anyway--and you add in all of the other factors making ATi's reference designs far more attractive to system OEMs--it's very easy to see why nVidia's getting its tail handed to it these days. In fact, the only thing that isn't at all easy to see is that nVidia is really aware of what the central problem is--their reference designs simply aren't competitive from the standpoint of the system OEM. This is the way it looks to me, anyway.
All of that is symptomatic of poor management and poor planning--so I'm not sure of your point. OTOH, why do you think it was that nVidia announced nV40 so far ahead of its ability to ship it? I can only conclude that it was because nV3x already was non-competitive with R3x0, both from a performance standpoint and, more importantly, an OEM standpoint, right? I mean, because of the disparity (not to mention yields), nV3x wasn't selling well anyway--so why not go ahead with an early announcement of nV40? It seems like something nVidia felt it had to do to attempt to sustain market confidence in the ability of the company to compete. Even Intel turns to the device of the paper launch when it cannot ship competitive products.
JHH is simply trying to paint a rosy picture on a sour canvas--but I would imagine to his chagrin he's discovering that investors are simply beginning to view his "explanations" as increasingly flimsy and insubstantial, and that nVidia's already eaten through the majority of the market good will the company had accrued over the years, beginning with the original xbox contract.
Understand, though, that revenue is never assured. Much of the success, or failure, of nV40 will be determined by system OEM demand for it in preference to competing products from ATi. Unless ATi drops the ball, though, it does not appear as if nVidia's reference designs are compelling for OEMs at present. (I'm also assuming nVidia's perfectly content with nV40 yields at the moment, too.)
Dell at one time offered 3dfx V3's--and even bumped the V3 in over the TNT2 in the standard slot at one point, as I recall. Problem was, though, that it simply wasn't enough to help 3dfx recover from the fact that nVidia's higher-end GFx reference designs were a lot more attractive to OEMs than the V5 ever was. The folks who think that D3 benches will determine anything substantial are just kidding themselves, imo. The system OEMs are where the war will be won or lost.
The thing about nVidia is that when the current xBox contract is kaput the real picture of nVidia's core business is going to emerge, and this is what investors are starting to understand. Lots of trends that have been in progress at nVidia for the last few years are coming to a "head," so to speak, for good and for ill, and the next 12-18 months will be somewhat of a watershed for the company, imo. Will they be able to reinvent themselves as ATi was able to do? Or will they simply fade away like 3dfx? I just don't see any clear answers at the present.
I sincerely hope that nVidia can get its core business back on track--away from a focus on marketing and toward substantial product R&D--because competition means a healthy market. OTOH, I also have faith that if nVidia succumbs to a fatal flaw as did 3dfx and just slowly fades away, that the market is big enough to accomodate another sizable player who comes along with the right technology and attitude.
Saleswise for every 100 ATi cards we sell less than 20 NVIDIA ones on the retail level.
It has been like this for a few months, with Doom3 we have had a slight interest in the 6800 series but nothing earth shattering and certainly not anything that can be sustained particularly with the fact that HL2 is going to reverse the trend in ATI's favour. Pity because I am quite fond of the 6800 series but NVIDIA did everything possible to be bigger badder and better than ATI this round and forgot about their partners in OEM. Incredibly bad PR practises also did not help throughout 2001-2003.
I think you are going to see the Intel have similar problems.. (oops you already have done) but Intel is so large that it can simply absorb the bumps and chicanes it faces. On the other hand NVIDIA's bark is a lot more menacing than it's bite and for that NVIDIA are paying heavily.
It has been like this for a few months, with Doom3 we have had a slight interest in the 6800 series but nothing earth shattering and certainly not anything that can be sustained particularly with the fact that HL2 is going to reverse the trend in ATI's favour. Pity because I am quite fond of the 6800 series but NVIDIA did everything possible to be bigger badder and better than ATI this round and forgot about their partners in OEM. Incredibly bad PR practises also did not help throughout 2001-2003.
I think you are going to see the Intel have similar problems.. (oops you already have done) but Intel is so large that it can simply absorb the bumps and chicanes it faces. On the other hand NVIDIA's bark is a lot more menacing than it's bite and for that NVIDIA are paying heavily.
DaveBaumann said:
:|
Don't forget about Intel...DaveBaumann said:
You got a point but I believe nVIDIA may also be in the position nVIDIA was in during it's early years of competition with 3DFX. Then again, ATI probably thinks of nVIDIA as a potent competitor. 3DFX didn't see nVIDIA as a potent competitor back then so they didn't bother to purchase nVIDIA. It's very hard to tell what will happen now.
How about AMD? If they bought nVidia it sure would be interesting!
