Your entire analysis of die sizes above vs. GPU selling prices rests on the assumptions that the cost to manufacture a die size for NV and AMD is similar, and that selling prices scale almost linearly with die sizes. I think that's too simplistic. There are too many factors involved such as NV vs. AMD's contract terms negotiating powers, economies of scale at play, other GPU specifics components (PCB, VRAM costs, coolers, etc.)
And also, you are comparing HD6950 vs. GTX570 and HD6870 vs. GTX560 Ti. Performance wise,
HD6950 competes with the GTX560Ti, while HD6870 competes with the GTX560. So if you wanted to compare prices, GTX570 (Nvidia's 2nd fastest single-GPU sells for $80-100 more than AMD's 2nd fastest single-GPU card, the HD6950).
Not a single person in this thread has argued that NV has 2% higher margins than AMD based on die sizes. Like I said, NV die sizes, their packaging costs and R&D spending should be left out of the discussion since the firm sells its Fermi GPUs in Quadro, Tesla and consumer graphics lines. NV's gross margins, 59% desktop discrete market share, etc. speak for themselves.
But when talking about
ATI vs. AMD, under AMD,
die sizes increased and average selling price per card fell. At the same time, AMD's performance dominance from 9800XT, X800XT, X1800XT, X1900XT is no longer present. Instead, they resort to competing on price, and on price/performance. It's great for us gamers to buy an HD4850 for $199, HD4870 for $299 or HD6950 for $299. But I have my doubts the old mgmt at ATI would have been as enthusiastic. Afterall, they were selling X800Pros for $399 against a still faster 6800GT and X800XTs for $550.
That is the
main issue I brought up. I have no idea why you keep talking about NV die sizes since we know nothing about NV's costs.
Care to explain this:
1) If AMD's small die strategy worked, how come their desktop discrete GPU die sizes increased, while the same segment's GPU prices fell? Surely, with over 50% dGPU market share, would the CEO start axing so many guys on the GPU side if they were making a lot of $? I mean really, lay off the guy behind Eyefinity?
2) Why did NV continue to successfully sell its high-end single-GPU cards for $500 but we haven't seen any single-GPU Nvidia card for more than $379 in 4 years? When ATI designed 9800XT, X800XT, X1800XT, X1900XT and their 'xx50' refreshes, ATI knew that a part of the allure of those cards is maintaining high-end enthusiast image. Average Joe walked into a store and he "heard ATI cards were the fastest". So he bought low and mid-range ATI cards too. Now, what's faster? Nvidia. Average Joe hears Nvidia makes the fastest cards, so what does he buy? Nvidia.
ATI thought that they didn't need a single high-end GPU card for "halo", "Marketing", enthusiast gamer mind-share. But if true, how come NV still has ~ 58-59% desktop discrete market share? AMD consistently tends to price their desktop cards lower than NV for a similar level of performance, and yet is still unable to have > 50% dGPU market share on the desktop. Talk about a 'small die' strategy that neither got you high profits nor high market share on the desktop. That's supposed to be successful? Most of AMD's success came in the
notebook market. The small die strategy worked much better in that segment.
3) How is selling an HD6990 with 2x 389mm^2 die for $700 is not "giving it away" vs. ATI selling high-end single GPU cards of the past with die sizes ranging from 210-315mm^2 for $500-600?
Care to explain how an HD5870 and HD6970 with die sizes larger than previous ATI high-end cards are selling for $200-250
less? That's not "giving it away" from a business perspective?
4) When NV was in the lead, they released GTX260 for $399 and GTX280 for $649.
When AMD was in the lead, they released HD5850 for $269 and HD5870 for $379. HD5850/5870 was much much faster than GTX280/285 at the time and Fermi was nowhere in sight. Why wasn't AMD aggressive enough and priced them at $399 and $650? Does their team not believe enthusiasts will pay those prices for AMD GPUs? Brand value erosion?
5) If HD7970 launches way ahead of Kepler and smokes the GTX580, is AMD going to price it at $379 again? If yes, then AMD is giving up huge profit margins in favour of larger market share. This strategy often works in certain businesses (Walmart, Costco, etc.). But given that AMD is worth a hair over 4.2B and
ATI on its own was worth 4B, it's clear to investors that the ATI part of AMD is no longer worth as much as it was in the past. So clearly, the only way for this to be true is if their future growth prospects have far diminished from ATI's days and/or their profits have fallen to the wayside resulting in far lower discounted cash flows.....
6) You know you have given up competing in the professional graphics space when you start selling your professional cards as low as
$189.....Talking about competing on price....
It's extremely difficult to argue that AMD's GPU side is doing great when AMD as a whole has a market cap worth less than ATI was as a standalone entity - plain and simple.
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