54.4% Margins - Nvidia

[Arachnotronic]

You are allowed to partake in these margins.
You buy shares in the company, instead of a new GPU. Good news for the company = good news for you (potentially).

I indeed partake. Speaking of which, I wonder how many more Titans Nvidia will pay for after these results?

 

[Phynaz]

I would hesitate to group Europeans as a whole into one category based on what FX1 is saying.

Well, Erenhardt is saying the same. And I think Galego or somebody else has has said the same.

 

[2is]

Well, Erenhardt is saying the same. And I think Galego or somebody else has has said the same.

That's evidence enough to know it isn't true. lol

 

[tviceman]

Im sorry but my 7970 overclocked 1125/1700 and would be even faster than those figures by 10% at least.

I'm sorry but overclocked gtx680's would be at least 10% faster than those figures too. You are shifting goal posts and still not scoring. My point remains - you are wrong and post misinformed and / or ignorant comments.

 

[parvadomus]

I dont know why you keep posting about gtx680 vs 7970. This generation is over, and I think both are good options, but 7970 is better hardware wise, it is just faster when OCed (it needs much less core speed to match gtx680). However gtx680 is better at performance/watt, which is obvious as it is based in a mid-end gpu.
AMD will have to aim at bigger chips for next time, and they will do better from start as they have now mature drivers for GCN arch.

 

[f1sherman]

lovely webcast (Conference Call) that provoked OP to begin with

they are quoting strong demand for Titan as the driving force for high end sales

JHH reiterated that PC is down at low end with tablets eating into it, PC Gaming continues to grow
expected to go from $17B in 2012 to $22B in 2015


notebooks expected down in Q2, main driving force for Q2: strong demand for Desktop (GTX) with expected double digits increase

 

[BallaTheFeared]

Lies from an evil money making cooperation.

 

[Wall Street]

Quoting gross margin in the chip business is a little silly. True, nVidia generated $1.1 bn. of revenue from only $521MM of product, so the gross margin in the first quarter was over 50%. But could they have ever had that product revenue without the $300MM of R&D or $100MM of sales and marketing expense? I don't think so. The engineers need to eat too (and the TWIWMTBP money needs to be spent). They made $184MM in EBITDA which is a nice but not crazy 16.6% pre-tax margin.

 

[guskline]

Here's what I think of the OP's posts
http://m.youtube.com/#/watch?v=7Vc4kAswXso&desktop_uri=/watch?v=7Vc4kAswXso

 

[Keysplayr]

Here's what I think of the OP's posts
http://m.youtube.com/#/watch?v=7Vc4kAswXso&desktop_uri=/watch?v=7Vc4kAswXso

?????

 

[guskline]

Sorry Keysplayer, you need to watch Billy Madison

 

[Keysplayr]

Sandler movie, right?

 

[5150Joker]

OP is a major troll. Wouldn't surprise me if he is an AMD shill.

 

[blastingcap]

Quoting gross margin in the chip business is a little silly. True, nVidia generated $1.1 bn. of revenue from only $521MM of product, so the gross margin in the first quarter was over 50%. But could they have ever had that product revenue without the $300MM of R&D or $100MM of sales and marketing expense? I don't think so. The engineers need to eat too (and the TWIWMTBP money needs to be spent). They made $184MM in EBITDA which is a nice but not crazy 16.6% pre-tax margin.

Wall Street has spoken. Take heed.

 

[Rvenger]

Well done to everyone who religiously defends Nvidia's pricing.

54.4% margins helped by Keplar.

Im sure Titan will push that up further!

Good for Nvidia. Any company that can make money in a declining market is good. I just wish they could at least eat 10% of those margins and give us better quality PCB/components and full voltage control.

 

[blastingcap]

Good for Nvidia. Any company that can make money in a declining market is good. I just wish they could at least eat 10% of those margins and give us better quality PCB/components and full voltage control.

Amen.

 

[Rezist]

Good for Nvidia. Any company that can make money in a declining market is good. I just wish they could at least eat 10% of those margins and give us better quality PCB/components and full voltage control.

Voltage control is probably here to stay along with boost, it makes it way easier to make different SKU's if you control overclocking. Also nVidia just had a great year 99% of fans probably aren't overclocking anyways.

 

[VirtualLarry]

then again losses are good for consumers because it makes companies try harder

WUT? Whereever you earned your MBA, you should immediately contact them for a refund.

 

[VirtualLarry]

Well, Erenhardt is saying the same. And I think Galego or somebody else has has said the same.

ShintaiDK has said that competition isn't always good and raises prices.

 

[Sleepingforest]

ShintaiDK has said that competition isn't always good and raises prices.

I'd like to cite a study from the University of Chicago and Columbia University which says innovation would be higher in an Intel monopoly, though consumer surplus would be massively reduced (the prices rise, for those not taking economics).

In other words, he's sort of tangentially right in that a monopoly spurs innovation in this case of a quasi-durable good (computers are a commodity which have reached a point of "good enough" for most), but at an extremely high (and frankly unpalatable) price.

 

[RussianSensation]

Looks like the gtx680 is pretty much neck and neck with hd7970GE. Why do you keep posting?

He is right, the HD7970GE is still faster than GTX680 and costs less. Looking at 3-4 latest games and ignoring all those games where 680 gets mopped isn't exactly accurate is it? There is no way around that - the 680 is not on par with 7970GE overall. GTX770 needs performance increase or a $399 price to make it mildly attractive against $410 HD7970GE if it's just a rebadged GTX680 4GB. Hopefully GPU Boost 2.0 ensures it is 10% faster than GTX680.

The mainstream media also tends to test the most popular games. What about other games people play?

http://gamegpu.ru/images/stories/Test_GPU/RPG/The Incredible Adventures of Van Helsing/vh 2560.jpg
http://gamegpu.ru/images/stories/Test_GPU/Action/Dead Island Riptide/di 2560.jpg
http://gamegpu.ru/images/stories/Test_GPU/Action/Far Cry 3 Blood Dragon/test/fc3 2560.jpg
http://gamegpu.ru/images/stories/Test_GPU/MMO/Neverwinter Dungeons Dragons/nevervinter 2560.jpg

MSI GTX680 TwinFrozr = $470
HD7970 GE TwinFrozr = $410

NV's marketing is winning this generation. I don't recall ever in the history of GPUs where a card that was faster + cheaper + came with better game bundles + had voltage control for enthusiasts + had more VRAM + made $ on the side sold less units than the competitor.

It's more like GTX680 keeps up with HD7970GE and sometimes beats it but more often it loses and when it does, by large margins. 680's performance is often inconsistent.

http://images.anandtech.com/graphs/graph6774/53357.png
http://images.anandtech.com/graphs/graph6774/53365.png
http://images.anandtech.com/graphs/graph6774/53372.png
http://images.anandtech.com/graphs/graph6774/53381.png

The price of HD7970GE after-market cards is a lot closer to after-market 670s not 680s. That makes it even worse.

==============

I see OP's point in correlating NV's high profit margins with excessively high prices of GPUs, but that's just how the free market works. The price increases on GPUs were not unexpected since NV/AMD are being squeezed on the mobile dGPU side by Intel, the low-end desktop dGPU market has been slowly dying, and the shrinks to lower nodes cost more from TSMC/GloFo. Since AMD/NV have not passed on any of these increases for generations, they are passing them all at once this round.

If consumers are willing to buy more expensive mid-range GPUs and are willing to pay $700-1,000 for flagship cards with 35% more performance over mid-range cards, then NV must have done something right to make them want those products more - marketing, features, brand name/perception, etc. In the end it is the consumer who decides if he/she wants to pay X for product Y. If consumers are willing to pay premiums for NV's products, then NV deserves the high profit margins. In my eyes, it seems the trend is more expensive GPUs from both camps in general. $400-500 mid-range with $700-1000 now reserved for flagship cards, or an increase from $250-300 and $500-650 we previously had.

 

[raghu78]

If people prefer Nvidia over AMD there are reasons. stronger brand , driver reputation, better multi GPU tech, wider support for CUDA accelerated apps which improves usage beyond games. AMD is now only getting started seriously with OpenCL, HSA and Gaming Evolved. It will take a few years to see the results of these efforts. With the next gen consoles sweep it will help AMD's position in the market. but still Nvidia is the company to beat in the GPU space. they are unchallenged in HPC / professional graphics (Tesla / Quadro) and dominate consumer graphics. AMD needs a very strong response with Volcanic islands to get back market share. something like a HD 4870 launch or a Radeon 9700 Pro that would take the fight to Nvidia .

 

[alcoholbob]

You think Nvidia is bad, what do you think the profit margin is on printer ink? Probably 95%.

Or how about 3M products. They sell a few strips of their Command Strip stickers for $10. Manufacturing cost is probably like 3 cents.

 

[RussianSensation]

Something like a HD 4870 launch

Won't work. AMD cannot afford to sell high-end cards for $299. If you were talking about price/performance, that won't work either. HD7850/7870/7950 provided superior price/performance many quarters; didn't matter. Actually HD7850/7870 went uncontested for more than 6 months as they were competing against more power hungry, slower and outdated 40nm Fermis. Made no difference. Since then HD7950 provided "6800GT" level bang for the buck as it could overclock to $500 level cards for a fraction of the price. Made no difference. AMD has been leading on price/performance and performance since early summer 2012 and it still didn't matter. HD6950 2GB unlocked x2 were almost the same price as single 580. Didn't matter.

or a Radeon 9700 Pro that would take the fight to Nvidia .

Won't work either. NV makes larger die flagship GPUs and Kepler is more efficient. Since Maxwell is expected to be way more efficient than Kepler, and is a brand new NV architecture for compute, while VI is more like GCN 2.0, Maxwell will most likely end up more efficient than VI and stronger in compute as GCN architecture will be 2 years old. Combine NV's larger die sizes in general, and I can't see how 9700Pro case can happen. That was once in 15-20 years scenario and GeForce 5 was the worst NV series made in that time. So you would need AMD to make the best GPU generation in its history and for NV to flop Maxwell. Won't happen.

 

[Jaydip]

So earning profit is bad now? socialism all the way