Edit: I found all of the info I needed. Thanks; - nVidia's margins going to be hurt worse than ATI on the higher end?

[exar333]

Originally posted by: SlowSpyder

Originally posted by: shangshang
OP,
why do you come to a relatively technical forum to ask about profits? You should be asking about profits on one of those stock/financial forums. You are asking in the wrong forum. Surely you have the IQ to realize that you are asking in the wrong forum, no? Why do you this? It's my opinion that either 1) you are trying to flamebait a little, or 2) you are purposely being dumb. I don't think you are a stupid person though, but just smart enough to play dumb!

I don't think this is really the wrong forum for this. Other then asking technical questions people do often discuss the state of the industry as well. Nvidia and AMD took different approaches with their new cards, nothing wrong with discussing what might be financial pros/cons from those different approaches.

The margin per card and is not the only influencing factor here. Ever wonder why Amazon can sell the same CD for $8.99 and a local music store sells it for $16.99? There are fixed manufactoring costs, adminstrative costs, and many other areas to consider when deciding if a company "priced their components" right. I can't speak for Nvidia, but I am sure they would not have designed the GTX 2xx series to lose money. Nvidia has made more profit year after year in 2005-2008 (fiscal years) and AMD/ATI has LOST more money year over year in the same period. If one company makes $500 Million and the other losed $300 Million in the same time period, and each has comperable per card margins, maybe it is AMD that is priving the cards wrong?

Stop thinking like a consumer (and a computer junky) and more like a businessman. Did the 48xx series help gamers and enthusiasts? YES! It has been great! Did AMD's pricing for the 4870 and 4850 help their sales? Yes. Did it help their profits, probably not. Did it hurt NV's profits and sales? Probably. The reason AMD had to price their great GPUs so aggresively is that their previous few generations had been crap. If given the choice, the consumer will probably purchase a comperable product from a company they have been purchasing for years and have been satisfied with. The only way to get back in the game was to give consumers a reason to buy their product. It has helped AMD's market-share, but probably hurt both NV and AMD's profits. Like others have already said in this thread, who can weather the storm better; a company who has MADE money for the last 4-5 years, or the company that has LOST money over that time?

To conclude, margins per card don't really mean anything. Wait for the company financials to come out and see if the company made or lost money. In the end, that is all that really matters.

Edit: SP

 

[chizow]

Originally posted by: Harbinger
Large monolithic gpus = more expensive to make and less wield/waffer. Obviously gtx's are more expensive to make. Only a true fanboi would think otherwise.

Interesting, is that why I can get a 2008 M3 for much less than a 2009 M3 even when their original MSRP was similar and they cost the same in terms of raw material? People seem to think wafers for different processes are sold for the same price just because the raw material price is similar, which defies basic business and cost accounting fundamentals. Its funny how people are willing to overlook this important aspect of pricing, but when confronted with a similar comparison with GDDR5 vs. GDDR3 they're willing to dismiss the price difference as insignificant.

To the OP: Nvidia posted a profit for the last quarter despite the common misconception they were taking losses on their high-end monolithic chips. In fact, their gross margins were actually up even after they slashed prices on their high-end parts:

Business of Tech Q3 by Ryan Smith

One interesting item from NVIDIA?s statement was that their gross margin is up, nearly 3%, from 39.1% to 41.9%. As NVIDIA has continued to take a soaking on the GTX 200 series, a more rational outcome would have been for those GPUs to drag the gross margin down; instead and in spite of that it?s up. Clearly NVIDIA is still finding a way to make money on what?s an expensive chip to make, and barring further price cuts things should further improve as they finish transitioning their GPUs to 55nm. Their ?performance segment ? (which we take to mean the sub-$200 GF9 parts) is now entirely at 55nm, for example.