NVIDIA Analyst Day: Jen-sun Goes to the Mat With Intel
by Derek Wilson on April 11, 2008 12:00 AM EST- Posted in
- GPUs
Tackling the Market Share Myth
Largely, 2007 and 2008 have been big years for NVIDIA's growth. With the rock solid performance domination of G80 since the last quarter of 2006 - a situation that is largely unheard of in the usually very fast paced and aggressive graphics market - confidence in NVIDIA (or rather a lack of confidence in the competition) has helped bolster their position in the industry as a whole. AMD certainly still offers some good price/performance alternatives in the midrange, as they can compete in price with the added flexibility of their smaller GPU and fab process. But they don't have the high margin high end market or the mind share to match NVIDIA right now.
The market gains made by the NVIDIA juggernaut combine with some interesting insight into sales data have combined to show NVIDIA as the current king of the roost in terms of desktop graphics sales. For a long time, Intel had been able to claim that it shipped a higher volume of computer graphics hardware than anyone in the world. This is true due to the pervasiveness of Intel's integrated chipsets on the desktop and in mobile solutions. Intel does offer a good solution for people who are uninterested in graphics performance or quality. They offer a 2D solution that supports a minimal set of DirectX features but, as Jen-sun said, "is a joke" when compared to any real 3D hardware.
So what's different aside from the already clear gains NVIDIA has made in the market place? NVIDIA says that something called double attachment is much to blame for inaccuracy of the data spread by Intel and analysts. Jen-sun claims that a huge proportion of Intel motherboards with include integrated graphics have discrete graphics cards plugged into them. The idea is that Intel basically gives away their integrated hardware and there's no reason not to ship it in a system. But shipments say nothing to illustrate the actual usage of these parts.
As an example, Jen-sun made the point that if Intel integrates a tiny graphics core on to all their CPUs, they would be able to claim 100% market share of graphics running on Intel systems using their current logic. The problem is that if you give away crap it doesn't mean people will use it. To help determine double attachment, NVIDIA looked at a couple different metrics relating to CPU and GPU sales.
With total GPU shipments at 336 Million units and total CPU shipments hitting only 273 Million, double attachment can help explain why so many more GPUs were sold than CPUs: if CPU sales more closely represents the number of systems sold or built last year, there are a large number of computers with unused integrated graphics in them which count as two shipped GPUs. This overlap would mean that Intel's shipped graphics number greatly over inflate the market impact of their graphics products.
Of course, we can't ignore the fact that the average PC enthusiast will likely upgrade their graphics card before their CPU and that multi-GPU solutions do account for at least a few of those shipments. We can't discount all of these shipments as double attachment, but it seems at least plausible that NVIDIA's real market share is somewhere between 65% and 75% based on the numbers they showed us. This is definitely more impressive than what we see on the surface.
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Griswold - Friday, April 11, 2008 - link
I bet it gave you wet dreams.jtleon - Friday, April 11, 2008 - link
Griswold....You need to return to Wally World!LOL
jtleon
Synosure - Friday, April 11, 2008 - link
It seems like everyone is just ignoring Amd and their hybrid solution. It would have been nice to hear his opinion on it.Griswold - Friday, April 11, 2008 - link
Its easier to talk about the blue FUD machine than the other (albeit troubled) competitor that is actually competing with your own company on all fronts.Ananke - Friday, April 11, 2008 - link
Intel and AMD aim two things:1. Integrated low power graphics - implemented in mobile computerized devices: laptops, UMPCs, smart phones, video/audio players, etc. These market has the fastest growth.
2. Paralel processing; the design and thus the know how of present GPU players in paralel processing is immerse. Such tech solutions would be suitable in financial, military, scientific modeling, which markets command hefty profit margins.
These are the reasons why AMD bought ATI
My point - corporations do things which will acccelerate margins, or accelerate growth. Financial analysts are not interested in nominal values only.
Intel was to choose either acquisition or internal development of products. It seems like they chose internal approach, since ATI was already bought, and Nvidia purchase is too expensive and complicated to make financial sense. Sun Microsystems and IBM are already situated well in the high margin paralel processing market. However, IBM recently was screwed with government ban on orders, and since they moved so many strategic operations overseas, I don't see them easily coming back to the big margin market. HP abandoned their PARISK line a long time ago, so they rely on AMD and Intel for chips supply now. So, exciting time for Intel and AMD for grabbing new market teritorries.
Nvidia is left to the discrete graphics market only. It is popular market across the gamers, magazines and general consumer, but it is not the market where the huge money are done. And, I don't see collision between Intel and Nvidia interests, except the Mobile market. What investors are warned about is that the big guys curbed opportunities for revenue and profit growth.
joegee - Friday, April 11, 2008 - link
"You already have the right machine to run Excel. You bought it four years ago... How much faster can you render the blue screen of death?" -- Jen Hsun-HuangGiven that this was in response to questions about nVidia's Vista driver problems, I don't know that this helps nVidia's case. Apparently those devices best able to render the BSoD quickly are those made by nVidia. This is not something that will become a new benchmark any vendor would care to win.
I would like a video card that will run both Excel *and* the latest games, Mr. Hsun-Huang.
-Joe G.
chizow - Friday, April 11, 2008 - link
Those Steam figures look familiar Derek. ;) I'm surprised JH didn't bring up the Microsoft class action suit as another example of Intel integrated chipsets failing miserably. Nice peak into the current market climate, although there wasn't as much discussion about the future as I had hoped.DerekWilson - Friday, April 11, 2008 - link
heh yeah ... but the steam numbers still say absolutely nothing about the state of the market in early 2007.they are a good indicator for what is happening now, and i never meant to imply other wise.
i'd love to see something more forward looking as well...
Genx87 - Friday, April 11, 2008 - link
I dont see how a company who has 0% market share above integrated graphics is going to motivate or get devs to write game engines to do ray tracing vs rasterization. John Carmack had an interview about this 2 months ago and he wasnt impressed with what Intel has and wasnt convinced Ray Tracing is better at everything than rasterization. He felt it would be a hybrid situation at best and Intel is dreaming.Pyrosma - Saturday, April 12, 2008 - link
John Carmack wasn't very impressed with Half Life when he first saw it, either. And it was built with his game engine. Oops.