6.10.2007

Nvidia gives Intel the finger...


"We cannot enter into alliances until we are acquainted with the designs of our neighbors. "
- Sun Tzu


We are here in Taipei during Computex, I’ve been here since Saturday enjoying the rain and sweltering heat. It’s like hell in a shower and I need a glass of ice water. I would have to say this is the most productive Computex ever and I have yet to set foot on the show floor. In the meantime I’m waking up at all hours of the morning and like a schmuck I’m working instead of sleeping.

So it’s time for a story on Nvidia – they continue to do well in spite of their driver issues with Vista. People love their chipsets on the desktop side, and they continue to improve on the notebook side. Of course they are still doing very well in the graphics space, and they won the PR war for the last year. As they improve Nvidia realizes that they want to become less of a “graphics only” company and more of a “platform company”.

Based on what’s happening on the competitive landscape it would seem that Nvidia didn’t have much of a choice but to focus all their future SLI resources on nForce platforms. That means, no other competing chipset will support SLI – and Nvidia may no longer provide “bridge chips” to make it happen.

Some might say this is aggressive “world dominating” behaviour, but if you look at it from Nvidia’s point of view it makes business sense. Nvidia has something that people want – nForce is pretty awesome.

It’s so awesome that last year Nvidia almost took on too much, they spread themselves somewhat thin and in the process they did a poor job of executing effectively with Windows Vista. The good thing is they realize this and I believe they have decided it’s important to have laser focus on their own branded platforms. If you were Jen-Hsun what would you do if two giants were bearing down on you?

Nvidia has always held a dominant position in the enthusiast space with their nForce platform, but they like everyone else have had somewhat of a tough time penetrating Intel’s dominance on Centrino/notebooks.

Well, no longer the case, Nvidia is using SLI, among other very cool very innovative features as their deck of trump cards.

The landscape has changed immensely this year – more consolidation has made them the third giant in the industry. They need to protect what makes them strong, and they don’t want to pimp graphics all day long. Nvidia wants to sell entire platforms while remaining completely agnostic on CPU choices.

It sounds like a good business model to me, and in my mind they aren’t “limiting choice” because we could still choose AMD graphics as a partner if we wanted.

So is Nvidia really giving people “the finger”? No. I think they have a valid explanation as to why they need to pursue this path. Do I agree with it? That’s a tough question, I guess time will tell - Nvidia may find out sooner than you will whether we agree with it or not.

The chess board keeps changing, no doubt about it. I wonder if Intel will try to buy Nvidia now... That could be expensive. Nope, not gonna happen.

...but whether AMD or Nvidia like it or not Intel will likely be the third major graphics vendor in less than two years.

small print: I did not break this story, the head of PR for Nvidia has been seeding it around, and I didn't click publish until someone else posted it.

2 comments:

Roborat, Ph. D. said...

Nvidia has always held a dominant position in the enthusiast space with their nForce platform, but they like everyone else have had somewhat of a tough time penetrating Intel’s dominance on Centrino/notebooks... Well, no longer the case, Nvidia is using SLI, among other very cool very innovative features as their deck of trump cards.

this doesn't make sense. intel's hold on the "centrinoesque" segment of the mobile market has nothing to do with high-end gaming or anything graphics related that nvidia can offer.
I think you're applying your own personal experience in what centrino customers want when in fact its the easy-of-use instead of cool gadgetry that has made Centrino such a success as it is today.

The only thing I can think of at the moment for NVIDIA to become a success in mobile is to exchange its SLI license with the Centrino badge on laptops using NVIDIA chipsets/ graphics. Seems fair to me.

Anonymous said...

These industry views are a little myopic on my opinion.

First of all, I was unaware that there were serious issues with nForce and Vista, other than SLI, which was clearly a graphics driver not a chipset driver issue. So I am not really sure waht a reluctance to license SLI has anything to do with focusing on resources.

Secondly, why should NVIDIA license SLI and why does their decision not to have any negative implications at all? Is there any reason in the world to hand one your major advantages to a competitor who has been holdonghte indusrty hostage with its IP for years? In the long-run NVIDIA is the industry's best hope for breaking the economic lock that Intel is holding over the industry. The average price of an NVIDIA chip is dramatically lower than that of an Intel CPU and margins on these products are comparable. So NVIDIA is a profitable, innovative, and finacially strong company with an eye on the future. And while AMD prices are somewhat lower than thoise of Intel, it is pretty clear that at present the company's operations and economic do not measure up to those of Intel. So f I am a major PC vendor like HP or Dell and I am looking at ways to reduce the cost of PC components in the long run you canbet I would be lloking pretty hard at making sure NVIDIA has a pretty good piece of business on the nForce side. That's just on top of the compelling product stack the company brings to the table.