NVIDIA's Bumpy Ride: A Q4 2009 Update
by Anand Lal Shimpi on October 14, 2009 12:00 AM EST- Posted in
- GPUs
Final Words
Is NVIDIA in trouble? In the short term there are clearly causes to worry. AMD’s Eric Demers often tells me that the best way to lose a fight is by not showing up. NVIDIA effectively didn’t show up to the first DX11 battles, that’s going to hurt. But as I said in the things get better next year section, they do get better next year.
Fermi devotes a significant portion of its die to features that are designed for a market that currently isn’t generating much revenue. That needs to change in order for this strategy to make sense.
NVIDIA told me that we should see exponential growth in Tesla revenues after Fermi, but what does that mean? I don’t suspect that the sort of customers buying Tesla boards and servers will be lining up on day 1. I’d say best case scenario, Tesla revenues should see a bump one to two quarters after Fermi’s launch.
Nexus, ECC, and better double precision performance will all make Fermi more attractive in the HPC space than Cypress. The question is how much revenue will that generate in the short term.
Nexus enables full NVIDIA GPU debugging from within Visual Studio. Not so useful for PC gaming, but very helpful for Tesla
Then there’s the mobile space. NVIDIA could do very well with Tegra. NVIDIA is an ARM licensee, and that takes care of the missing CPU piece of the puzzle. Unlike the PC space, x86 isn’t the dominant player in the mobile market. NVIDIA has a headstart in the ultra mobile space much like it does in the GPU computing space. Intel is a bit behind with its Atom strategy. NVIDIA could use this to its advantage.
The transition needs to be a smooth one. The bulk of NVIDIA’s revenues today come from PC graphics cards. There’s room for NVIDIA in the HPC and ultra mobile spaces, but it’s not revenue that’s going to accumulate over night. The changes in focus we’re seeing from NVIDIA today are in line with what it’d have to do in order to establish successful businesses outside of the PC industry.
And don’t think the PC GPU battle is over yet either. It took years for NVIDIA to be pushed out of the chipset space, even after AMD bought ATI. Even if the future of PC graphics are Intel and AMD GPUs, it’s going to take a very long time to get there.
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Finally - Wednesday, October 14, 2009 - link
[img]http://images.anandtech.com/reviews/video/ATI/behi...[/img]Yes, I agree. Covering 18% of the market is definitely more important than covering only a mere 82%..
Zingam - Wednesday, October 14, 2009 - link
Yes but you should consider the profit margins too. You could sell ten graphics cards with a profit $1 or sell two Teslas with a profit $5. What would you prefer to sell then?JarredWalton - Wednesday, October 14, 2009 - link
I'd prefer to sell hundreds of thousands of Teslas with $1000+ profit margins, personally. I'm just not sure who's going to buy them!AnandThenMan - Wednesday, October 14, 2009 - link
Nvidia claims that Fermi will scale down "easily" to all price points. I am highly skeptical of this myself, I have the same mind set that the non-graphics related portions of the chip will make it difficult to compete with AMD in the mainstream market.The compute sector they are going after is a market waiting to happen really, does that mean Nvidia is counting on substantial revenue from a market that still has to mature? Seems dubious.
haukionkannel - Wednesday, October 14, 2009 - link
I am sure that Fermi will scale down easily to all price points. It just does not mean that it's competitive in all price points!The high end Ferni can most propably beat 5870, but it will be more expensive (it's bigger so more expensive to produce), but in any way they would have the fastest GPU around, so they can sell cut downs versions, to all ignorant people who don't read all reviews, but who knows that the "Ferni" is the fastest GPU you can get...
But I really hope that it will also be competitive. In that way we will see cheaper GPU's from both companies!
Zingam - Wednesday, October 14, 2009 - link
IBM sells big machines with various architectures for decades. Maybe that's where NVIDIA is trying to compete next?That market is there and it was before PCs anyway. Perhaps the journalists do not present us the whole story properly???
Zingam - Wednesday, October 14, 2009 - link
We actually do need NVIDIA to do well. I'll need a new GPU soon and I want it to be powerful and cheap! Competition does matter!:D What about VIA buying NVIDIA :) What I say might be a heresy but if the x86 license is not transferable, can't they do the other way around? That way we could have three complete competitors who could offer a full range of PC products.
Griswold - Wednesday, October 14, 2009 - link
Considering that VIA belongs to the Formosa Plastics Group, there is easily enough money in the background to take over nvidia if they wanted to. Still unlikely to happen.samspqr - Wednesday, October 14, 2009 - link
crappy GPUs on crappy CPUs: way to go, INVVIDIAA!!guywithopinion - Wednesday, October 14, 2009 - link
CD and the campaign against Nvidia is just dumb (IE "bumpgate"). I seriously wonder at this point why they don't just cut the loss and put the legal screws to him, bury him in court for a few years. The cost would be well worth it and the online community would be better for it. I so miss Mike M, he seemed to know how to publish the unfaltering without it degenerating into to mindless partisan garbage.