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Friday, 16 July 2010 11:58

ATI wins DirectX 11 GPU market fight in 1H 2010

Written by Fuad Abazovic
ati_logo2009nvidia_black

Nvidia starting to catch up
Judging by the recently announced graphics results from AMD, it looks like the ATI part of the company has delivered some rather nice numbers. The company has sold 16 million Radeon HD 5000 series in the last three quarters.

This means that they have shipped 16 million DirectX 11 parts and that Nvidia probably managed only a few hundred thousand. So judging by number cards sold, ATI has won this round by a mile.

The second surprising part is that even today Radeon 5850 and 5870 cost as much as they cost six months ago when they launched. Although AMD has slightly reduced HD 5830 pricing in the short term we don’t see any major price cuts and Nvidia is surely catching up with Geforce GTX 400 series, but only in the $199 and up market. Bear in mind that this particular market segment is limited to a handful of people that are willing to pay such money for good graphics.

Nvidia's GF106 and GF108 a mainstream and entry level chips are to be expected in late summertime, let’s say August, and by that time, ATI will probably sell a few hundred thousand if not a million more HD 5000 series cards.

In its last quarter the company had reported revenues of $440 million and a quite miserable $33 million of profit, but a year ago they had revenue of $235 million and a loss of $17 million.

Nvidia is certainly limping with the number of DirectX 11 Fermi and similar parts sold, but overall Nvidia makes much more money with much higher average selling price for its GPUs.

Nvidia has Optimus and quite a strong following of people who want their GPUs and once they make a decent DirectX 11 mobile GPU, they will continue to grow in this market segment. ATI is doing purely in mobile computing and Nvidia as you should know by now makes a lot of money on professional CAD / CAM market and nowadays they make some decent margins selling GPUs for super computers.

Overall ATI wins this round, they could make better profits out of it but they own the DirectX 11 market. Nvidia still makes a lot of money with its outdated DirectX 10 cards, but they surely know how to sell them for much higher profit.  The biggest issue for Nvidia is that once they have the whole DirectX 11 line up, ATI will be ready to move to its second generation DirectX 11 product line.

Of course ATI can thank Nvidia for being late with Fermi, and even when the company launched it after six month delay, it was not as great as people have expected, but knowing Nvidia, once they fall on its face, they always tend to return stronger.

Last modified on Friday, 16 July 2010 15:45
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