Originally posted by: nRollo
Originally posted by: MarcVenice
The link I gave you shows that sales have been going up, and nvidia's marketshare has been going down. And that explains why there revenue went down, doesn't it, in a market that's actually growing? That's not so hard to understand, right?
I'm guessing a 3% overall drop in GPU marketshare didn't account for a 74% drop in profits. Ben seems pretty close to the mark in his assessment of finances to me.
I also think discussing "less profits for NVIDIA" in a year where their main competitor decided slash the price of their high end product to 1999 levels in an effort to win back some marketshare is fairly pointless. Profits are down largely because margins are.
He's also right about NVIDIA's profits this quarter being higher than AMD's (and I believe ATI's) for years, so if the point is "Haha! NVIDIA is making less millions!" it's sort of a hollow victory.
AMD may make more per chip due to the smaller die size, but I still think their firesale prices did them and the industry no favors. I don't think it's a sustainable strategy, and no one is going to convince me that we'll see the same kind of vendor features (warranty, step ups), product quality (compare the look and feel of a 9800GTX+ to a 4850- the 4850 seems like something from days long gone) and R&D for a market where "Yippie skips our highest end GPU is going to sell for what they did back in Voodoo 1 days and all of our expenses are only twice as much!".
Do people honestly believe that ATi shrinking their die made it possible for them to make the same profit selling $300 cards as they made previously selling $500 cards? Why? There have been die shrinks before, this is the "magic" one that makes huge margins possible when every other expense they have is much higher than it was?
My dad told me early on "There's no such thing as a free lunch" and when you take the profits out of a business the innovation and investment into it don't remain constant. Companies invest money where the profit is, and people who believe AMD likes selling 4870s for what they sold Radeon 1 VIVOs for are in for an awakening.
We should all be wishing both NVIDIA and AMD were making 100s of millions, because the current trend is a race to the bottom like so many other markets in our economy.