Big Price Drops on NVIDIA Cards Coming

[Genx87]

This basically signals surrender by NVDA.
Whatever razor thin margins they were operating on with their GTX cards just turned into damn near invisible.
@toyota...why would you buy a last gen card for roughly the same as a Bart 6870?
Seeing you are so vendor neutral...

Have you seen Nvidia margins???? Razor thin? That belongs to AMD with their 1 million in profit last quarter.

 

[Silverforce11]

ATI also expanded with 300 additional R&D personnel. They are prolly Spartans recruited to kick NV while they are down into the abyss.

ps. AMD has previously been in much bigger debt than that. Turning huge debt into slight profit = win.

 

[Barfo]

I see a GTX 460 or HD 6850 in my future 😀

 

[badb0y]

Why are they dropping prices already? Is it a sign of what is comming?

Anyways I think I will pick up a GTX 470 if one with a nice cooler hits around 220 but I want to see what the 6870 is bringing.

 

[edplayer]

Good going guys; some of you have turned a thread about price drops into YET ANOTHER Nvidia vs. AMD argument. Just can't help yourselves, huh? :thumbsdown:🙄

what were you expecting, AMD vs Pepsi?

this is the video subforum, discussion of the competitor will always appear given enough posts.

 

[blastingcap]

what were you expecting, AMD vs Pepsi?

this is the video subforum, discussion of the competitor will always appear given enough posts.

As an online discussion about video cards grows longer, the probability of a comparison involving AMD and NVIDIA approaches 1?

 

[psoomah]

I don't know if "margins" are really something that AMD can tout. You need to look at the Q3 shipment/profit numbers.

I don't know what goes into their shipment/profit numbers, but I do know 58xx cards were selling $30-$50 above original MSRP on those shipments.

They were making fat profits on their chips, what they did with that profit ... ?

 

[psoomah]

Have you seen Nvidia margins???? Razor thin? That belongs to AMD with their 1 million in profit last quarter.

Costs is costs. AMD has smaller dies and less costly boards for the same performance = larger profit margins than Nvidia.

That's just flat out irrefutable.

 

[blastingcap]

Costs is costs. AMD has smaller dies and less costly boards for the same performance = larger profit margins than Nvidia.

That's just flat out irrefutable.

I agree that it means larger gross margins. I don't know why AMD had $1 million operating margin in their GPU division last quarter. Perhaps there was a huge increase in R&D expenses, or subsidization of the CPU division, or AMD paid for 6xxx chips but had not yet sold them to AIBs and thus it looked as though they had huge expenses for 6xxx but no revenues to match--yet.

 

[RussianSensation]

I agree that it means larger gross margins.

Revenue - Cost of Good Sold (Inventory) = Gross Margins (AMD wins here)

Gross Margins - Selling, General Administrative & R&D Expenses = EBIT (Earnings Before Interest and Taxes)

EBIT or also called "operating income" is a measure of a firm's profitability.

Remember how NV has 3 lines: Quadro, GPU, GPGPU? Well its R&D is subtracted from aggregate Gross Margins of all 3 product lines, not just discrete GPUs. Also, same for SG&A. So 1 firm has 3 revenue product streams with each generating cash flows, and economies of scale of sharing marketing teams, key engineers, etc. (although their GPU division on a standalone basis is probably negative right now). Of course this example is still too simplistic since NV also has minor revenue from Tegra.

Here is a simplistic way of thinking about it.

Say it costs $3B to design a new GPU. NV spends $4B to design a chip that will sell in all 3 product lines. AMD spends $3B for really 12% of professional market and discrete GPUs. Over the next several years, it will take a long time before profits from their 1 discrete GPU line cover their R&D spend. Since right now their desktop market share is around 51%(AMD) /49% (NV), that means NV has 2 more revenue streams to make serious $$$ despite relatively similar GPU architecture costs. Basically, the way NV has diversified its business into various product lines is a much more effective business strategy (you minimize your cash flow risk in case 1 of your revenue streams has a bad year). While if ATI flops a couple GPU generations, they would be in serious trouble. Maybe that's why their engineers work extra hard? 🙂

 

[edplayer]

I don't know what goes into their shipment/profit numbers, but I do know 58xx cards were selling $30-$50 above original MSRP on those shipments.

They were making fat profits on their chips, what they did with that profit ... ?

and how much of that $30~50 went to ATI?

 

[blastingcap]

Revenue - Cost of Good Sold (Inventory) = Gross Margins (AMD wins here)

Gross Margins - Selling, General Administrative & R&D Expenses = EBIT (Earnings Before Interest and Taxes)

EBIT or also called "operating income" is a measure of a firm's profitability.

Remember how NV has 3 lines: Quadro, GPU, GPGPU? Well its R&D is subtracted from aggregate Gross Margins of all 3 product lines, not just discrete GPUs. Also, same for SG&A. So 1 firm has 3 revenue product streams with each generating cash flows, and economies of scale of sharing marketing teams, key engineers, etc. (although their GPU division on a standalone basis is probably negative right now). Of course this example is still too simplistic since NV also has minor revenue from Tegra.

Here is a simplistic way of thinking about it.

Say it costs $3B to design a new GPU. NV spends $4B to design a chip that will sell in all 3 product lines. AMD spends $3B for really 12% of professional market and discrete GPUs. Over the next several years, it will take a long time before profits from their 1 discrete GPU line cover their R&D spend. Since right now their desktop market share is around 51%(AMD) /49% (NV), that means NV has 2 more revenue streams to make serious $$$ despite relatively similar GPU architecture costs. Basically, the way NV has diversified its business into various product lines is a much more effective business strategy (you minimize your cash flow risk in case 1 of your revenue streams has a bad year). While if ATI flops a couple GPU generations, they would be in serious trouble. Maybe that's why their engineers work extra hard? 🙂

Eh, if that's true that strike the R&D hypothetical, unless of course they hired a bunch of R&D people recently who haven't made anything yet. Silverforce claimed 300 staff just got added, but to what, I don't know.

 

[toyota]

AMD may be lowering launch prices for the 6870/6850.


http://www.techpowerup.com/133109/N...60-and-GTX-470-to-Counter-HD-6800-Threat.html

Meanwhile, sources close to AMD told us that in response to this development, the red-team will fine-tune the final pricing of the Radeon HD 6800 series, to step up pressure on the competition. We expect as much as $20 to be cut on the currently expected prices of the Radeon HD 6800 series pair.

 

[Will Robinson]

Cry "Havok" and let slip the Dogs of War !:twisted:
A Barts Pro at $159 would be killer.:thumbsup:

 

[Ancalagon44]

Meh, speak for yourselves, I'm buying a 3dFx Voodoo 2. The original and best.

Its nearly as fast as the GPU used in an iPhone!

 

[nemesismk2]

I see a GTX 460 or HD 6850 in my future 😀

That is what I see in my future too 😀

 

[Minas]

AMD may be lowering launch prices for the 6870/6850.


http://www.techpowerup.com/133109/N...60-and-GTX-470-to-Counter-HD-6800-Threat.html

Meanwhile, sources close to AMD told us that in response to this development, the red-team will fine-tune the final pricing of the Radeon HD 6800 series, to step up pressure on the competition. We expect as much as $20 to be cut on the currently expected prices of the Radeon HD 6800 series pair.

Let the good times roll!

 

[imaheadcase]

This basically signals surrender by NVDA.
Whatever razor thin margins they were operating on with their GTX cards just turned into damn near invisible.
@toyota...why would you buy a last gen card for roughly the same as a Bart 6870?
Seeing you are so vendor neutral...

Since when has price cuts equaled surrender. Its called business.

 

[Sickamore]

Consumers win at the end of the day. Prices of the 460 is already going down.

 

[edplayer]

This basically signals surrender by NVDA.

AMD may be lowering launch prices for the 6870/6850.

if AMD is lowering prices also, does that mean that they are also surrendering? Can I go to either company right now and take command at this moment of weakness?

 

[jacktesterson]

And I just bought my 2nd 470 a week ago....

 

[nemesismk2]

Price cuts dont equal surrender because I would prefer to cut prices just to spoil my rivals major launch. Who knows maybe Nvidia have been overcharging for their GTX 460. 😉

 

[Lonyo]

Price cuts dont equal surrender because I would prefer to cut prices just to spoil my rivals major launch. Who knows maybe Nvidia have been overcharging for their GTX 460. 😉

Overcharging compared to what? The GTX460 768MB can be had for a steal if you manage AR prices.

 

[dangerman1337]

Hmm... crosffire 6850s doesn't sound bad at that price.

 

[Sickamore]

Crossfire 6870 is not that bad. Who buys 6850. To me its not worth it buying a card like the 6850 to play games.