My post was just to invoke thought. The specific subject manner was the very short sighted view about nvidia being late with their full 28nm lineup and such.
You discussed why NV waited longer to launch GTX600 series but as gamers we don't care. When technology is late, it's late and NV shouldn't get a pass from us gamers for being late and allowing AMD to overcharge gamers because they couldn't offer any competition for more than half a year.
I don't need excuses why NV needed 8 months to launch it's sub-$300 line when AMD launched HD7970 in December of 2011 and completed the entire single-GPU line by March. As a consumer, NV was late and it hurt the gaming market and hence the criticism. It was also criticized for not moving the price/performance curve or bring new features (unlike Fermi cards). This was also explained in details in threads in the past. Fermi offered superior DX11 performance, more VRAM, more overclocking headroom. What did GTX600 offer over HD7000 series? None of these.
Anyway, the post was more food for thought as to why nvidia would hold off launching chips they already had. To clear out inventory was brought into my discussion and i brought in AMD as an example to try to relate the concept to bring forth understanding.
That's the problem. You brought in discussion of inventory of how it relates to GPUs but AMD has a CPU inventory problem with Llano and so forth. So what was your comment regarding 40nm parts AMD had laying around? It's made up!
My post was just to provoke thought but since you want to get specific then lets talk on some of your key points.
Right but your post regarding inventory issues related to GPUs cannot provoke though since unlike millions of Fermi parts that needed to be cleared from the channel, AMD didn't have this problem if you actually read what the write-down is related to. Thus, your example doesn't bear any meaning to provoke thought. NV and AMD executed their GPU strategy totally differently it is NV who had a 28nm wafer shortage that forced them to delay their GTX600 low and mid-range parts by 6 months in order to be able to fulfill their mobile GPU kepler contracts first.
First off you say " it's financially impossible" that AMD's GPU division is only 8%.
That's not what I said at all. I see there is a continuous reading comprehension problem on this forum.
I said since AMD's desktop discrete GPU division only brings less than 10% of the firm's actual cash flows, AMD's main issues and the decline in the stock price are not attributable to its performance as it's financially impossible for such a small unit of the company to drive the stock price 60% down.
Your implying their GPU division could do nothing and couldnt effect their profits? What?? What your using as proof doest make any sense at all. Your concept here is completely unacceptable and false.
I never once said their "GPU division could do nothing, couldn't effect their profits". First of all it's affect, not effect. Second of all, what I am saying is their desktop discrete GPU division could evaporate to 0 and it would lose than 10% of the stock price - meaning AMD is primarily a CPU, not a GPU company from a financial sense. What does that mean? It means that AMD hasn't made a lot of $ from their graphics division in a long-time, not just with HD7000 series, but a long-time. In other words, something else has kept the stock alive all these years and is no longer performing well.
What are those other product lines? CPUs, APUs and servers. All of those are now suffering more than ever, while the GPU business is fairly flat and not performing that much worse outside of expectations. Since the discrete desktop GPU business is even smaller than AMD's mobile GPU business, it hardly has an impact on AMD's financial performance. Even if AMD sold 2x as many or 2x less HD7000 desktop cards, it would hardly move the stock up or down by more than 10% because it's such an immaterial product line in the context of the positive cash flows generated (or in this case not generated) by rest of the company.
This is why this forum should stick to non-finance based stuff and the finance stuff should be either left to people who understand it or work in the field, with the rest just listening and learning. I actually do understand the concepts because it's my job. You are just doing it from an amateur respective.
Why? well....... if AMD made 100million more in the graphics division for Q2 then they wouldve reported 130+million for the Quarter. This wouldve been an out of this world quarter for AMD. Every extra dime made by their GPU division is a dime for the whole AMD. ITs the whole AMD, and your prentending they dont go together. Their profits are a collection of the entire AMD performance. The better their GPU division does, the better AMD does. Its that simple.
See you are again not understanding the context. If Coca-Cola released a new energy drink, it doesn't expect to keep the company affloat. Coca-Cola's main business is not energy drinks. AMD's main business has not been graphics for a LONG time now (at least 5 years). Blaming AMD on how little $ their GPUs make is not seeing the big picture -- Consumer GPU business has never really been a very profitable business and HD7000 series is no different in this regard to HD4000/5000/6000 series or GTX400 series for that matter. This is especially true for the desktop discrete GPU business that has become a small fraction of both NV and AMD at least 3-4 years ago. You can even say NV's desktop GPU business is a cost center for their professional graphics, nothing more.
Even if AMD's graphics division made 100 million more in 1 quarter, it would hardly turn the company around. Besides, I told you already, AMD's graphics division is performing as expected or close to it. So why would it make $100 million dollars? That's like asking Coca Cola to make 2x more $ than it normally makes. Out of where? Thin air?
The consumer graphics business does not make a lot of $ in today's economy, neither for AMD, nor NV. AMD needed the CPU business to keep the company afloat. .
Even NV's entire net income for Q2 and Q3 was hardly a lot and they sell Tegra and have 95% market share in professional graphics that AMD doesn't have.
I am telling you the actual business of consumer graphics is not a very profitable business in the beginning and it's also not where NV makes the most $ either. Even NV knows this which is why they make most of their $ in professional graphics and moving to mobile CPU development. If you remove the Tegra, Quadro and Tesla lines from NV, it's discrete GPU business is hardly making more $ than AMD's that would actually matter to the bottom line of AMD.
Which is when AMD decided to drop the 79XX series and didnt expect nvidia to be able to counter.
Do you work for AMD? Of course when AMD dropped HD7000 series early they expected to counter. This was the whole point AMD released HD7000 series early with lower clocks - to beat NV to market and command higher profit margins.
AMD has had to lower prices to very very low and ultra competitive prices. Across their 28nm lineup. Ask yourself this, if AMD was able to get 50% more out of their GPUs, would that help AMD profits? Of course it would, if you cant see it than i worry about you. If AMD could sell their GPUs for a higher markup they would in a heartbeat. It would benifit AMD tremendously if they could get more out of their GPUs. Their gross margin would average higher if AMD could get more out of their GPUs. But all this is besides my point.
It would hardly matter. 10% of a product segment cannot fix 90% of the firm. It's pure finance/mathematics. 10% of a firm cannot drop margins from 44% to 31%. This is attributable not to AMD graphics lower margins but 100 million write-down related to CPUs. But neither you nor people in this thread get this because you neither work in finance nor understand what the numbers mean or how to calculate them.
Here I'll do a quick example for you just so you see you are not seeing the big picture.
Q2 2012
90% of the firm's product lines have 44% margins (the rest)
10% of the firm's other product lines have 50% margins (AMD desktop graphics)
The firm's average margins would be 44.6%
Let's say in Q3 2012
90% of the firm's product lines have dropped margins to 32% because of 100 million write-down for Llano inventory
10% of the firm's other product lines have increased margins to 60%
The firm's average margins would be 34.8% (a huge drop!)
See you are assuming AMD's desktop products are killing the firm but missing 90% of the company. Even if AMD made more $ in desktop GPUs, it hardly matters. It's pure math. When 85% of the firm is losing $, the GPU division cannot sustain the firm.
I wasnt writing about the truth of what happened to AMD. I was offering a line of thinking and it was specifically related to the Nvidia being late comments we keep hearing over and over. I was just offering a larger picture and using AMD as an example to this. You may not understand this but i meant no harm to AMD (or you) in anyway.
When I criticized NV for being late this year, it was from a view of a
consumer not investor. If you own NV stock, sure you may care that NV delayed its products by 6 months. NV delivered its sub-$300 product line late and offered little to the consumer from a price/performance or overclocking perspectives that HD7700/7800/7950 didn't already offer for months. All AMD had to do was drop prices and it neutralized NV's sub-$300 line as worth buying. When Fermi launched, even if AMD dropped prices, it still made Fermi superior in many areas - VRAM, overclocking, DX11 performance. Fermi was superior technologically for us overclockers and gamers, Kepler is not. Therefore, for us consumers, there is no excuse why NV was late by 6-8 months. Generally speaking this forum has been critical of companies that launch late and bring little to the table and unlike GTX670/680/690, the rest of NV's line brought very little to the table despite being late.
GTX650/650Ti/660/660Ti are inferior to 7770/7850/7870/7950 in performance, price/performance and overclocking. Not at all like Fermi. Fermi was late but it brought it. Sub-$300 Kepler was late, and it brought nothing to us consumers worth talking about besides PhysX. That's why I criticized NV being late by 6+ months as a consumer because it allowed AMD to dictate high prices which hurt us due to NV's lackluster GTX600 launch.
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