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Now that ATI/AMD Lost the war....
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rise
Diamond Member
we know this, but we also know that they are buying them, cards, ok? so that is the market, right? you're complicating it. you can say the market is over priced or under priced, it doesn't matter. whats being said is that nv doesn't have to do squat because they hold a convinving upperhand in the market.
AMD helped keep prices down by offering an alternative, but they weren't the sole reason. If AMD offered an equivalent product but nobody purchased it, then AMD would have no effect on Nvidia whatsoever. It is ultimately the consumer's purchasing decisions that will dictate pricing.
If 8800GTX sales were to suddenly slow to a trickle, don't you think Nvidia would seriously think about dropping its price to a point where sales would rebound? But until that happens, Nvidia is more than happy to leave the 8800GTX price right where it's at.
coldpower27
Golden Member
There will always be people that buy and can afford at effectively whatever cost Nvidia charges for the best product. Yes, if NOBODY bought the extreme price cards, Nvidia probably would drop prices, but getting that kinda perfection is difficult and won't happen real world.
I am not sure if there is such thing as a "fair" profit here. All companies should take all the opportunities presented to them to make as much moola as possible, I would disagree if this was an essential service to live, like selling air or water when no alternatives are available, but these are luxury items and as said you won't die if you don't but em, and no one is putting a gun to your head forcing you too.
Would prices have been lower if the R600 spanked the GTX/Ultra, most likely yes. Is this the only factor which determines the pricing of Nvidia products? No, most certainly not.
I am not sure if there is such thing as a "fair" profit here. All companies should take all the opportunities presented to them to make as much moola as possible, I would disagree if this was an essential service to live, like selling air or water when no alternatives are available, but these are luxury items and as said you won't die if you don't but em, and no one is putting a gun to your head forcing you too.
Would prices have been lower if the R600 spanked the GTX/Ultra, most likely yes. Is this the only factor which determines the pricing of Nvidia products? No, most certainly not.
Matt2 - thanks, I enjoy posting here (for the most part)!
I think everyone here understands capitalism 101. If I were to imagine why Creig responded the way that he did, I would guess that it was simply the tone of the initial post: that the 'blame' for high nVidia prices rests with AMD for not creating a competitive product.
All these things are inter-related: companies, consumers, etc. Decisions by AMD affect nVidia's decision-making process, and vice-versa. Still, companies bear significant responsibility for their own actions (as I think Creig was trying to point out) under all circumstances. What the market will bear is not a sufficient definition of moral behavior in the marketplace. As I said before, however, I don't think nVidia is doing anything wrong.
Still, if nVidia can drop the prices and remain profitable, I think they should do it. This is a golden opportunity for them (meaning this time in general, not simply the opportunity to drop prices on the GTX). They've got AMD in a vice right now, in every sense of the word. AMD has only one product and it not only has stiff direct competition (the gts 640) but serious competitors above and below (the gtx and 320gts, respectively).
nVidia has too many cards in the 'deck' right now, which is one reason why I though it was a good idea for AMD to do a 'family' launch. With so many cards to play, nVidia can put pricing pressure anywhere they want. They can squeeze the 2900 from below and above, as well as cannibalize its sales at that price point. If driver improvements do make the 2900 a somewhat better buy in terms of raw performance over the gts640, nVidia could still hurt AMD with aggressive gts640 and gtx pricing.
The question is, how much do they think they need a 'war-chest' of cash reserves later on, versus the market share and consumer good will they could potentially garner right now. That's for them to say; I certainly don't know their financial condition.
I think everyone here understands capitalism 101. If I were to imagine why Creig responded the way that he did, I would guess that it was simply the tone of the initial post: that the 'blame' for high nVidia prices rests with AMD for not creating a competitive product.
All these things are inter-related: companies, consumers, etc. Decisions by AMD affect nVidia's decision-making process, and vice-versa. Still, companies bear significant responsibility for their own actions (as I think Creig was trying to point out) under all circumstances. What the market will bear is not a sufficient definition of moral behavior in the marketplace. As I said before, however, I don't think nVidia is doing anything wrong.
Still, if nVidia can drop the prices and remain profitable, I think they should do it. This is a golden opportunity for them (meaning this time in general, not simply the opportunity to drop prices on the GTX). They've got AMD in a vice right now, in every sense of the word. AMD has only one product and it not only has stiff direct competition (the gts 640) but serious competitors above and below (the gtx and 320gts, respectively).
nVidia has too many cards in the 'deck' right now, which is one reason why I though it was a good idea for AMD to do a 'family' launch. With so many cards to play, nVidia can put pricing pressure anywhere they want. They can squeeze the 2900 from below and above, as well as cannibalize its sales at that price point. If driver improvements do make the 2900 a somewhat better buy in terms of raw performance over the gts640, nVidia could still hurt AMD with aggressive gts640 and gtx pricing.
The question is, how much do they think they need a 'war-chest' of cash reserves later on, versus the market share and consumer good will they could potentially garner right now. That's for them to say; I certainly don't know their financial condition.
cold - I agree and disagree at the same time. Selling luxury items makes price gouging somewhat less reprehensible, but it's still inappropriate behavior in my book. Given that all people and families use the same funds to purchase 'necessities' and 'luxuries' the difference between price-gouging in the different categories is largely moot. Even if we posit that the family should prioritize 'necessities' over 'luxuries' (a truism) then the company is still depriving the family of a luxury it *should* be able to afford. That's not nice behavior in my book.
Now GPUs are at the extreme end of the 'luxury' scale of products, so you'll not see me get hysterical or full of hyperbole if there is a little price-gouging in this market.
Now GPUs are at the extreme end of the 'luxury' scale of products, so you'll not see me get hysterical or full of hyperbole if there is a little price-gouging in this market.
We shall see. This may be a long war. The r600 looks like it likely has legs and could easily be the longterm winner. A refresh may solve some of the weird problems it has. Personally I am waiting to see how drivers mature, as I never buy new beta products - being very cheap. With lower production costs, it should be able to compete in price with the 8800 line. So hopefully prices will drop, performance will improve and I will than break down and buy one.
Well I certainly hope the 8800 gtx ultra is not a sign on how the next round will shape up for nvidia. In terms of sales nvidia will win this round without a doubt, but in terms of performance and future legs - not as easy a guess. Will certainly take some dx10 games, not this patch on garbage coming out, to assess this.
I can agree with your first sentence. But do you agree that AMD's late introduction of the HD2900xt helped to keep prices of the 8800GTX higher than they might have been?
Regarding your second paragraph... it depends at what price consumers started buying again, if it's so low that the price gets too close to the GTS, Nvidia might just discontinue the GTX.
Synomenon
Lifer
Aren't the HD2600's specs. pretty close to the 8600GTS? I thought both had 128-bit memory and similar clock speeds? The only difference I saw on the specs. (which may be a big deal) is that the HD2600s can come with 256MB or 512MB.
I think I read that both have similar HD offloading capabilities.
I am really curious to know what ATI's margain is for the Radeon 2900XT. Since the X800 series, ATI's profot margains have been terrible, worse than the GeforceFX days for NVIDIA. I sure wish someone could interview AMD and find out why they had so much trouble taping out the Radeon 2900XT. Wasn't it supposed to originally launch in November of last year?
Extelleron
Diamond Member
Well, the HD 2900 has 700~ million transistors and the G80 has 690M~, and since the 2900 is on a smaller (80nm) process it should, at least in theory, be cheaper for ATI to produce.
Mid-range and low-end R600 parts will be cheaper for ATI to produce because they are on a 65nm proces, and nVidia's 8500/8600 are on a 80nm process.
dflynchimp
Senior member
Arguably though, the actual manufacturing cost for a highend card is not altogether that much higher than that of a low end card. The producer might pay more for a larger copper cooler and fan, but in terms of manufacturing cost it's roughly the same for their Fabs to churn out the gpu chips and boards. in fact I'd say that the cost of a HD 2900XT for ATI to manufacture is no higher than $150, the price of their mid-range cards, and probably closer to $100. The technology is essentially the same, just upped a notch and given a higher voltage/current limit though the way the board/chip is wired.
Actually, I believe x2900XT is roughly 420mm^2 on 80nm compared to 484mm^2 of G80 on 90nm. In other words, G80 is only about 13% bigger than R600, yet retails for about 27% more (along with that similiar match in performance). Therefore, it's quite likely that despite the die size advantage of R600, G80 is driving higher margins (which nVidia even stated via their latest conference call).
ATI has traditionally had lower margins in their GPU sectors throughout the past few years. I believe their corporate margin last fall (prior to AMD's buyout) was in the low 30's. Even though R600's margins are most likely higher than this, they aren't high enough to bring up an already low corporate margin average. For ATI, that might not seem like a big deal. But for AMD, it's a little more problematic.
But I think there is some hope in regards to R630. If ATI can get it out by the end of June with competitive performance to G84 (which shouldn't be hard), then that will definately be a turn-around for them. ALthough I'm not sure how quickly nV might rebuttal with their own die shrink plans. At the moment, I haven't seen in news on such a launch spoiler.
Nelsieus
coldpower27
Golden Member
As was mentioned there is more to it then that, as pointed out the R600 is about 425mm2 on the 80nm process and the G80 is ~480mm2 on the 90nm process. The R600 is about ~88% the size of the G80, which should save costs some assuming the yield levels are the same, which I doubt they are as the 90nm process is more mature then 80nm.
It will be the same issue for the RV630 vs the G84 but I am glad for once ATI has a smaller die in the mainstream then NV. With 169mm2 vs 145mm2 on the mid range. ATI should in theory if all goes well have some advantage in production costs. The RV630 is about 85% the size, of the G84.
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