[Forbes] Nvidia's Tom Peterson on higher priced products vs. AMD

tviceman

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Mar 25, 2008
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http://www.forbes.com/sites/jasonev...esync/?utm_campaign=yahootix&partner=yahootix

The article is GSYNC vs. Free sync. But this quote in particular is OUCH...
Let’s use another example, AMD’s Radeon 295×2. It launched at $1499 last year. Since then, the price of the 295×2 has been cut in half. Do you think AMD’s partners lowered the price because they wanted to make less money? Of course not! The market gave them feedback and said ‘I know it seems reasonable that this would be a $1500 part and you’re delivering a lot of performance, but that’s not the price.’ So then AMD said ‘Maybe $999 is the price.’ And the market responded by saying ‘nope, not quite.’ The G-Sync enabled ROG Swift has only come down in price by $50 in the last year. That’s because demand is there.

We come back to one of AMD’s principle arguments about our cost being higher than their solution. That’s absolutely true. But you know what? That’s an Nvidia problem. It’s completely unrelated and irrelevant to the consumer.

While I completely disagree with that last comment, being unrelated and irrelevant to consumers, those are some fight'in words! I hope the R9 390x beats Titan X in performance at 1440p and 4k AND is cheaper. I'd love to see Nvidia put in their place.

On a side note, it's interesting to see that Free sync has a visual inferiority to GSYNC. I'm not sure how much it's noticeable without slow motion, as it could be Nvidia grasping at straws, but it's interesting nonetheless.
 

Subyman

Moderator <br> VC&G Forum
Mar 18, 2005
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I think as a company nvidia products are seen to be more valuable to the consumer. This is typically seen by the slightly higher price/performance of nvidia products compared to AMD. That "nvidia tax" is exactly based on a large number of consumers choosing nvidia for reasons other than pure performance.

He is pretty much spot on from I can see. I think what hurt the 295X was the lack of new crossfire profiles for several months in a row.
 

ViRGE

Elite Member, Moderator Emeritus
Oct 9, 1999
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Hubris never was TAP's strong suit...

The reality is both companies will charge as much for their products as they can in order to maximize profits, and then cut prices as necessary as competition drives demand lower. Meanwhile NVIDIA is able to maintain higher prices (better marketing, better consumer perception of their brand, etc) and they love every second of it. Though TAP's "we charge more, therefore our products are better" standpoint is pretty much a fallacy.
 

casiofx

Senior member
Mar 24, 2015
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I find it funny that he used 295X2 as an example, it is a GPU and not a freesync monitor to directly compare.
Not to mention he used 295X2 instead of the Titan Z lol!
 

thilanliyan

Lifer
Jun 21, 2005
12,052
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I've used both over the years and never once did I think that nVidia cards were worth more than AMD cards, but that's just my opinion.

Lately, AMD cards have been worth more to me actually...I like the full volt control since I watercool my cards, and more importantly the bitcoin mining has been extremely worthwhile (although that is dead now). Performance is close enough that it hasn't swayed me one way or the other in a while.
 
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blastingcap

Diamond Member
Sep 16, 2010
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Price is what the market will bear. Cost is the producer's concern. That's true. Producers can limit supply and thus milk a smaller market, or raise supply and charge a lower price and try to make up the lost profit margin via volume. Nvidia already has most of the market so they probably don't feel too much pressure to go the second route.

Btw, the actual price to the consumer varies over time, too. Example: the high efficiency of the GTX 750 Ti means that it saves money in the long run vs similar AMD cards, especially for multi-monitor users. Those watts add up over the years; in my case, adding up the wattage (idle multimonitor, gaming, etc. times the marginal cost per kilowatt hour), the differential is somewhere around $5 to $10 savings each year compared to the AMD Radeon 260X. The 260X is also slower than the GTX 750 Ti in the first place. So the clear choice for me was to get the GTX 750 Ti since it was faster and would ultimately cost the same as the 260X after a couple of years. And would be cheaper, beyond that timeframe.
 

raghu78

Diamond Member
Aug 23, 2012
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Tom Petersen has selective memory. The Titan-Z launched at USD 3000. Nvidia did not sample the press as they did not want the reviewers to conclude that the R9 295x2 was faster, cooler and quieter for half the price. Nvidia had to slash the price by half to move product in the channel inspite of the so called workstation heritage with full double precision performance.

btw the R9 295x2 price was cut by half when GM204 launched. GTX 970 SLI was the primary competitor and provided similar performance (atleast in Sep 2014 on launch reviews) at half the price of R9 295x2. GTX 970 SLI was also more power efficient. AMD saw the competitive situation and reacted to it. Nvidia did the same when R9 290X launched.

Tom must be thinking we don't have the intelligence to understand that pricing is dictated by competitive situation. Intel has a free hand today in servers and high end desktops because AMD failed with Bulldozer. This was the same Intel that struggled with the Pentium 4 and Pentium D against the Athlon 64 and Athlon 64 x2. Unfortunately for consumers AMD just has not been able to compete in the CPU market especially servers and high end desktops. Hopefully Zen is a competitive CPU architecture which brings AMD back into the game.

I am confident that R9 390X will provide a fitting reply. Interesting times lie ahead. :thumbsup:
 

RussianSensation

Elite Member
Sep 5, 2003
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Btw, the actual price to the consumer varies over time, too. Example: the high efficiency of the GTX 750 Ti means that it saves money in the long run vs similar AMD cards, especially for multi-monitor users. Those watts add up over the years; in my case, adding up the wattage (idle multimonitor, gaming, etc. times the marginal cost per kilowatt hour), the differential is somewhere around $5 to $10 savings each year compared to the AMD Radeon 260X. The 260X is also slower than the GTX 750 Ti in the first place. So the clear choice for me was to get the GTX 750 Ti since it was faster and would ultimately cost the same as the 260X after a couple of years. And would be cheaper, beyond that timeframe.

That comparison hardly applies. From the first week GTX750Ti was out, one could get way faster cards than R9 260X -- 7850/7870/R9 270/270X. This applies even today:

$130 R9 270X is 44% faster than a 750Ti.
http://www.newegg.com/Product/Product.aspx?Item=N82E16814131532&cm_re=r9_270X-_-14-131-532-_-Product

While your point about energy savings stands, your comparison of a 750Ti to a 260X is way off. I can't even count the number of times in the least 9 months I've posted a deal on a $100-130 R9 270/270X since GTX750Ti launched.

I find it funny that he used 295X2 as an example, it is a GPU and not a freesync monitor to directly compare.
Not to mention he used 295X2 instead of the Titan Z lol!

Bingo. His comparison is flawed. As GPUs get older, and faster ones come out, there are price drops. There isn't really a monitor available for sale that has the features of the ROG Swift which is why it's in high demand. Should there be 1-2 monitors that are way cheaper with similar performance or better quality, the ROG Swift will fall out of favour. Since the state of progress in the monitor industry is slower than GPUs, it's only natural that the ROG Swift would have retained its value for longer.

This article only helps to highlight how much NV hates to lower prices without competition. That's why we need a strong AMD to force NV to drop prices ($650 280 -> $500 in 1 month, $650 780 --> $500 once R9 290 series launched). Without AMD, NV will just keep prices high for even longer.

As a consumer I actually find NV's pricing strategy a lot more flawed than AMD's. As the GPU's life-cycle runs, its price should gradually decline over time until a new series/competitor's product replaces it. This is because costs to manufacture an XXXmm2 die on the same node fall over time because each node has its own life-cycle and its own associated manufacturing costs that get passed on to NV/AMD. In turn, AMD cards tend to fall quicker over time which is a more fair reflection of what happens to pricing of wafers and increased yields at GloFo and TSMC. Unlike AMD that passes on theses costs to the consumers, NV instead converts these savings into their higher gross margins over the life-cycle of the node/GPU generation. That's why we hardly see price drops on cards like 680/780Ti/980 over their useful life.

Since the consumers don't mind paying NV the same price for a GPU on day 1 as 6-9 months from launch, it seems they don't look into any of this or the actual timing of GPU generations. Win for NV. However, those consumers who understand nodes, product life-cycles and follow the GPU market closely would be unlikely to pay $550 for a 980 today since it's already a 6 months old product, which means it's realistic price should probably be closer to $450-475. That's why usually the largest price drops on the NV side happen when AMD releases something way better in price/performance or NV releases a new architecture (Fermi -> Kepler -> Maxwell) where due to performance improvements of a new architecture/node, we get a situation of a $300 660Ti matching a 580 or a $330 970 coming close to a $650 780Ti.

Good for NV for having established their strong marketing brand for the average PC gamer but I don't pay premium for marketing fluff/brand name, and I also understand product life-cycles and TSMC/GloFo node manufacturing, which is why to me NV's constant pricing for SKUs for 9-12 months until the next refresh makes no sense as a consumer. It's pretty much a given that unless AMD launches R9 390X series, NV will ride 970/980 at $330/$550 respectively for as long as possible. In theory, even without competition, the manufacturing cost for those cards is lower today which means they should cost less to us as consumers but NV is not passing any of those savings -- 100% copy of the Apple strategy, the company JHH admires and wants to copy above all.

Tom must be thinking we don't have the intelligence to understand that pricing is dictated by competitive situation.

Every generation now NV keeps raising prices/offering less features. They first raised 560Ti from $250 to $500 in a 680, then they raised 680's successor's price from $500 to $550 in a 980. Their dual-chip flagship card used to cost $599 in a GTX590 and their last was Titan Z at $3000. With the Titan brand, NV now blatantly removed DP performance but kept the same $999 price. The most unfortunately aspect why NV can keep doing this is because even when AMD beats NV in nearly every metric, consumers hardly switch. Sometimes I don't even think NV directly competes with AMD. As of late, they are living in their own world selling a 780Ti successor for $999 (Titan X), while just in 2010 GTX480/580 were $499.

Let's hope AMD brings it with R9 300 and R9 400 series to keep the competition going!
 
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Techhog

Platinum Member
Sep 11, 2013
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Tom Petersen has selective memory. The Titan-Z launched at USD 3000. Nvidia did not sample the press as they did not want the reviewers to conclude that the R9 295x2 was faster, cooler and quieter for half the price. Nvidia had to slash the price by half to move product in the channel inspite of the so called workstation heritage with full double precision performance.

btw the R9 295x2 price was cut by half when GM204 launched. GTX 970 SLI was the primary competitor and provided similar performance (atleast in Sep 2014 on launch reviews) at half the price of R9 295x2. GTX 970 SLI was also more power efficient. AMD saw the competitive situation and reacted to it. Nvidia did the same when R9 290X launched.

Tom must be thinking we don't have the intelligence to understand that pricing is dictated by competitive situation. Intel has a free hand today in servers and high end desktops because AMD failed with Bulldozer. This was the same Intel that struggled with the Pentium 4 and Pentium D against the Athlon 64 and Athlon 64 x2. Unfortunately for consumers AMD just has not been able to compete in the CPU market especially servers and high end desktops. Hopefully Zen is a competitive CPU architecture which brings AMD back into the game.

I am confident that R9 390X will provide a fitting reply. Interesting times lie ahead. :thumbsup:
All of this. This guy gave the most childishly passive-aggressive response I've ever read, which is actually pretty normal for Nvidia.
 

SPBHM

Diamond Member
Sep 12, 2012
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I think Nvidia should avoid talking about the 295x2, considering it destroyed the Titan Z pricing and performance crown, also it still looks faster than the Titan X and cheaper.
 

blastingcap

Diamond Member
Sep 16, 2010
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While your point about energy savings stands, your comparison of a 750Ti to a 260X is way off. I can't even count the number of times in the least 9 months I've posted a deal on a $100-130 R9 270/270X since GTX750Ti launched.

The lowest option on AMD's side that allowed DP-adapter-less Eyefinity was a 260X so it was 260X vs 750 Ti for my purposes.

750 Ti after rebate has been on sale for $99 on and off for a while now, at one point it was less. I don't game much now, but I do use multimonitor a lot and the wattage difference is ~30W at the wall between a GTX 750 Ti and a 265 or 270: http://www.techpowerup.com/reviews/NVIDIA/GeForce_GTX_750_Ti/23.html Multiplied by hours and my marginal electric rate, that's $5-10 per year making the actual cost of running a GTX 750 Ti about the same as a 260X.

Basically I am playing older games for the next 2 years until we get beyond 28nm. I have a large Steam backlog so an overclocked 750 Ti will do just fine, a 270 doesn't add much.

Anyway I was just pointing out that there is a cost of ownership issue regarding electricity that may help explain part of NV's price premium ability. Efficiency is helping them in the OEM segment, as well as laptops and data centers and internet cafes.

I don't know if either company does better in resale value.
 
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Black Octagon

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Dec 10, 2012
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I think Nvidia should avoid talking about the 295x2, considering it destroyed the Titan Z pricing and performance crown, also it still looks faster than the Titan X and cheaper.


Forbes interviewer, Forbes readers. He knows he can get away with it.
 
Feb 19, 2009
10,457
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Tom Petersen has selective memory. The Titan-Z launched at USD 3000. Nvidia did not sample the press as they did not want the reviewers to conclude that the R9 295x2 was faster, cooler and quieter for half the price. Nvidia had to slash the price by half to move product in the channel inspite of the so called workstation heritage with full double precision performance.

btw the R9 295x2 price was cut by half when GM204 launched. GTX 970 SLI was the primary competitor and provided similar performance (atleast in Sep 2014 on launch reviews) at half the price of R9 295x2. GTX 970 SLI was also more power efficient. AMD saw the competitive situation and reacted to it. Nvidia did the same when R9 290X launched.

Tom must be thinking we don't have the intelligence to understand that pricing is dictated by competitive situation. Intel has a free hand today in servers and high end desktops because AMD failed with Bulldozer. This was the same Intel that struggled with the Pentium 4 and Pentium D against the Athlon 64 and Athlon 64 x2. Unfortunately for consumers AMD just has not been able to compete in the CPU market especially servers and high end desktops. Hopefully Zen is a competitive CPU architecture which brings AMD back into the game.

I am confident that R9 390X will provide a fitting reply. Interesting times lie ahead. :thumbsup:

Excellent post. Clearly Tom was being a spokesperson and its his job to not point out his own company's flaws.

Definitely it is without a doubt the 970 is the killing blow from NV. They could have went greedy mode and price it much higher.
 

ocre

Golden Member
Dec 26, 2008
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I think he was talking he was addressing AMD and the fans saying Nvidia prices are high. He used the 295x as an example but what he is saying is not limited to AMD cards at all. It is the same principle for Nvidia cards. Doesnt matter if it is the 980, 970, or the titan Z. By looking at the outcome, we can see clearly the market didnt take to the titan Z and nvidia had to lower the price to sell them.

Generally AMD cards are are cheaper than Nvidia cards. And the seem to drop in price quicker as well. But that doesnt mean the market is not in control. It doesnt mean all nvidia cards are a hit.

You bringing up the titanZ doesnt change anything he said. Nvidia pricing is an Nvidia problem and you can see this clear as day in the titanZ. This card didnt move and nvidia had to lower prices. They missed the mark there and it is there problem. But i would say that the majority of card launches from Nvidia do seem to hold up their value. But whether they do or do not, that is an nvidia problem. Its not a rude statement, it just is what it is.

If you think about what he is saying, then there is nothing wrong with him referencing the 295x. Take what he says and apply it to the titanZ, it works the same way.

The big take away here is that pricing is not what many people try to make it out to be. AMD is not being saints or doing their fans favors by having low and lower prices. It is not something they are doing out of the kindness of their hearts. There is a real system at play.

it is pretty simple. AMD/nvidia makes chips that they need to sell. They price them and plan to sell X amount. There is about a 2 month gap between the fab and the product shelf. These chips are in production and so many y amount a week and everyone needs to get paid.

1) If the chips are selling at the rate they are being manufactured, everyone is happy and the system is working. - all is good
2)If the chips are selling faster than Y output, there will be a shortage and prices might even go up until/unless the decision is made to increase production-this is a surprisingly well. very good for everyone.
3) if the chips arent selling as fast or faster than the chips coming down the pipeline, prices drop. - this is not the greatest thing.

See the problem with droipping prices to start moving parts is that it is complex. You have to move the inventory that built up and the stuff still currently coming down the line. If you cut production, you are effecting jobs. Your partners are struggling. It is bad all the way around. Especially because you have to find that magic number. You dont want to cut too far but not cutting enough would take weeks before you know. And the problem will be worse than it was in the beginning.

People need to realize that every product is not only priced at where the company thinks they will sell, they have a very specific idea about how many they need to sell and there is a pipeline pumping products out at a specific rate that is based off these estimations.
 

showb1z

Senior member
Dec 30, 2010
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Excellent post. Clearly Tom was being a spokesperson and its his job to not point out his own company's flaws.

Definitely it is without a doubt the 970 is the killing blow from NV. They could have went greedy mode and price it much higher.

Taking the real specs of the 970 into account it's overpriced compared to a 290 as it is. At $400 it wouldn't have sold nearly as well.
I hope the 390 will smack Nvidia back to reality, they sure deserve it with the arrogant way they handled the 970. But even if the 390 is a clear win, you can't even be sure the masses will take note of it, the way things are going these days.
 

Leyawiin

Diamond Member
Nov 11, 2008
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Every generation now NV keeps raising prices/offering less features. They first raised 560Ti from $250 to $500 in a 680, then they raised 680's successor's price from $500 to $550 in a 980. Their dual-chip flagship card used to cost $599 in a GTX590 and their last was Titan Z at $3000. With the Titan brand, NV now blatantly removed DP performance but kept the same $999 price. The most unfortunately aspect why NV can keep doing this is because even when AMD beats NV in nearly every metric, consumers hardly switch. Sometimes I don't even think NV directly competes with AMD. As of late, they are living in their own world selling a 780Ti successor for $999 (Titan X), while just in 2010 GTX480/580 were $499.

Let's hope AMD brings it with R9 300 and R9 400 series to keep the competition going!

The 8800 GTX I bought in 2006 was $550. The Radeon X800 XL I bought in 2004 was $329. Today's cards are a bargain.
 

3DVagabond

Lifer
Aug 10, 2009
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Taking the real specs of the 970 into account it's overpriced compared to a 290 as it is. At $400 it wouldn't have sold nearly as well.
I hope the 390 will smack Nvidia back to reality, they sure deserve it with the arrogant way they handled the 970. But even if the 390 is a clear win, you can't even be sure the masses will take note of it, the way things are going these days.

nVidia's reality is fine. It's the people who find completely irrelevant ways to justify their purchases. Like DP for the original Titan. They had absolutely no use for it what so ever, but they were willing to let it be the reason they would over pay. New Titan? No DP, but that doesn't matter, because it wasn't really the reason they spent a grand the last time. They just think it's awesome and they want it.

The 290(X) reference cooler was terrible. We actually had reviewers claim it was going to damage your hearing if you bought one of them. The new titan has actually been compared in volume to the reference 290 in reviews. It's OK though. Nobody claiming hearing loss, and nobody saying that they aren't going to buy one because of it. We are willing to overlook short comings if we are fond of something. It's just human nature.

The 8800 GTX I bought in 2006 was $550. The Radeon X800 XL I bought in 2004 was $329. Today's cards are a bargain.

Not everything suffers inflation. This is especially true with electronics. What did a 60" flat screen cost 6 years ago compared to now? This fake adjusting for inflation is just non information made up to support an nVidia's pricing.
 

BSim500

Golden Member
Jun 5, 2013
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That comparison hardly applies. From the first week GTX750Ti was out, one could get way faster cards than R9 260X -- 7850/7870/R9 270/270X.

The nearest technical comparison is indeed the 260X (rebadged 7790). 270X may be abnormally cheap right now due to AMD clearing inventory before the 300 series, but the problem there is if a 270X needs 2x power cables but a 750Ti needs none, then the 270X simply isn't an option for the plethora of people buying the 750Ti to fit in a pre-built Dell, HP, etc, with 300w PSU and no spare GFX cables (or 2x Molex cables to put a converter cable on). There seems to be this persistent belief that "low end desktop" = people with 600w after-market PSU's and 2x spare 6-pin PCI-E GFX connectors just lying about, when a very large chunk of it is adding some gaming capability to pre-builts with 300w PSUs that weren't designed as gaming rigs from the outset. Same goes with 270X's 120-150w (peaking at 226w) vs 50w (peaking at 74w) GFX cards for HTPC's - it's not going to have the same compatibility on low-wattage PSU's. If it overloads the PSU or simply fails to boot up because they ran out of 6-pin cables, then it's simply the wrong choice at any price. Perf-per-$ simply isn't the only "be all and end all" metric in the low end if you have other constraints (as pre-builts often do). And they far outnumber the number of people who build their own PC's from custom picked components (something those of us who hang round tech forums every day surrounded by other like-minded "custom build" peers often lose perspective of).

Let's hope AMD brings it with R9 300 and R9 400 series to keep the competition going!
Agreed. And hopefully these "rebranded-rebrands" rumors are false and AMD have put as much effort into increasing perf-per-watt across the board as they've done with perf-per-$ (which for many isn't about running cost, but primarily heat, noise & compatibility in small boxes with small PSU's).
 

Ranulf

Platinum Member
Jul 18, 2001
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"large chunk of it is adding some gaming capability to pre-builts with 300w PSUs that weren't designed as gaming rigs from the outset"

Indeed and the only way it pencils out is a decent new psu would be more than the $25-50 in price difference. The 750ti has been overpriced since its launch. The problem with prebuilt OEM stuff is adding anything to them can be iffy.
 

Smoblikat

Diamond Member
Nov 19, 2011
5,184
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I go where the price/performance takes me. Nvidia has the better performing cards for sure, but they are also unreasonably inflated in price. I havent bought an nvidia card since my GTX465's (unlocked to 470's of course)
 

SirPauly

Diamond Member
Apr 28, 2009
5,187
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imho,

Ultimately, the market decides.

In my mind, nVidia risks and invests more on R&D and software solutions, which the market doesn't mind paying more of a premium for comparable performance. For most of the vocal minority complaints about nVidia are some the reasons why the market accepts the premium.

To defeat nVidia, one must out work and out innovate them.