54.4% Margins - Nvidia

[SirPauly]

Yep, and the biggest reason to be approving = ties to NV, biggest reason to dislike it = consumer seeing price increases.

No rational consumer would be excited about this.

I don't mind higher priced products or even a new ultra enthusiast tier because actual choices are indeed paramount to consider. However, my constructive nit-pick was the evolutionary and more-so incremental price/performance on substantial and significant nodes and arches this round from both players at times.

Nvidia always desired that 1,000 dollar price-point and maybe believed if they had a window of opportunity or enough of a competitive advantage, well, the market would reward them.

They're right and surprised that there is so much premium love from both parties -- AMD's launch pricing and nVidia's current pricing.

Ultimately, the market decides and consumers desire these products for their needs and there is demand for them. The market decides if a company can command or sustain their original asking price over time.

 

[Dribble]

Silly post

Why does Nvidia need to go bust? Is it either mega profits or bust?

No one is talking about wanting Nvidia to go bust.

They are not making mega profits, they have a 15.6% operating margin which is on the low end profitability wise for companies in this sector, but you should know all this because it was mentioned earlier in the thread.

 

[SirPauly]

The only area that troubled me was the expected Tegra drop this quarter and significant! You can really see why nVidia is spending focus here and working hard to get Tegra 4i out.

I realize how important GeForce is but for nVidia to really grow their work on these SOC designs may be key and interesting to watch what they do here over time.

It's fascinating how quickly the PC or technology landscape changes and evolves.

 

[Keysplayr]

They are not making mega profits, they have a 15.6% operating margin which is on the low end profitability wise for companies in this sector, but you should know all this because it was mentioned earlier in the thread.

Wait. What makes the OP's 54% number wrong, and your 15.6% right? Or is it just not clear like gross or net profit margins? Is it after R&D and advertising are accounted for?

 

[sontin]

gross margins: Revenue - Cost of good sales.
Operating margins: Gross margins - Opex.

 

[Keysplayr]

The only area that troubled me was the expected Tegra drop this quarter and significant! You can really see why nVidia is spending focus here and working hard to get Tegra 4i out.

I realize how important GeForce is but for nVidia to really grow their work on these SOC designs may be key and interesting to watch what they do here over time.

It's fascinating how quickly the PC or technology landscape changes and evolves.

This might be due to a rumored transition to a Kepler based Tegra 5. I don't know. And yes, the tech landscape runs at the speed of cha-ching.

 

[Keysplayr]

gross margins: Revenue - Cost of good sales.
Operating margins: Gross margins - Opex.

Then is 54% Gross and 15.6% Gross - Operating expenses?
I don't really follow this stuff, but curious.

 

[RussianSensation]

Probably a consumer that needs an upgrade now compared to the GPU they have.

What was this person doing when Gigabyte GTX670 was $399 on May 10, 2012, exactly 1 year ago? 12 months have passed, Gigabyte GTX670 fell $20.

GTX670 level of performance today should be $275 and in 12 months from now $200 at most. GPUs should get cheaper over time. NV's and AMD's cards have barely moved in the last 12 months. Huge rip-offs on both sides now. I wouldn't touch anything in 2013 at these prices without $75-150 price drops for both, esp. NV. HD7970GE were going for $470 in July 2012, and are $410 now. The joke's is on people still buying at these prices and sending a signal to NV/AMD that this is OK.

 

[SirPauly]

Maybe didn't need or desire an upgrade at that time!

 

[sontin]

GTX670 level of performance today should be $275 and in 12 months from now $200 at most. GPUs should get cheaper over time.

Yes, GPUs getting cheaper when there is competition. Do you have no "advise box" at AMD?

NV's and AMD's cards have barely moved in the last 12 months. Huge rip-offs on both sides now. I wouldn't touch anything in 2013 at these prices without $75-150 price drops for both, esp. NV. HD7970GE were going for $470 in July 2012, and are $410 now. The joke's is on people still buying at these prices and sending a signal to NV/AMD that this is OK.

What? AMD dropped prices in a huge way. A 7970 cost $549 without free games. Now you get it for what? $399 with three games.

 

[raghu78]

What was this person doing when Gigabyte GTX670 was $399 on May 10, 2012, exactly 1 year ago? 12 months have passed, Gigabyte GTX670 fell $20.

GTX670 level of performance today should be $275 and in 12 months from now $200 at most. GPUs should get cheaper over time. NV's and AMD's cards have barely moved in the last 12 months. Huge rip-offs on both sides now. I wouldn't touch anything in 2013 at these prices without $75-150 price drops for both, esp. NV. HD7970GE were going for $470 in July 2012, and are $410 now. The joke's is on people still buying at these prices and sending a signal to NV/AMD that this is OK.

where is the pressure from the competition to move prices downward. did AMD refresh their HD 7000 series as you would expect. No, they skipped the refresh and went straight to 20nm Volcanic Islands aka HD 9970.

If AMD can fit a Bonaire HD 7790 at the same 85W TDP as HD 7790 and provide 30% more performance whats stopping them from doing the same at the high end. A power optimized HD 8970 with extra power states found in bonaire and binned to operate at 1.175v can easily provide 30% higher performance at the same TDP. AMD should have addressed the bottlenecks of Tahiti and pushed for 4 ACE, 4 tesselators, 4 raster engines, 48 ROP and increased the shader count to 2560. that would have easily improved per sp performance and increased performance overall by 30%.

AMD has chosen to skip the refresh to prioritize their strained resources towards PS4 / Xbox Next. Also the company's CPU division is bleeding the company. This afffects the ability of the company to invest significantly into multiple GPU projects when the financials are heavily strained. AMD has done itself no favours too by addressing the issue of frametimes only now , years after it was raised by sites like pcgameshardware and techreport. Nvidia had a much better idea and have addressed the problem earlier. this was mentioned in the anandtech frametime aricle as a "source of frustration" at AMD that they did not know it before the competition. AMD is rarely proactive and mostly reactive.

To put it simply AMD needs better perf/ sq mm and perf/watt for the chips they design. That would get them good press and good sales. Look at Kepler family launch. AMD was forced to cut prices at each and every product launch, especially at the high end. AMD's drivers too took a lot of time to improve their competitive situation. By then the battle was over. The first impressions always are the most important and on that basis Kepler swept the market.

 

[Fx1]

The OP posts this thread with the intent to stir things up and you say I'm trying to stir things up? Some warped folks around these parts.

Except im not on AMD or Nvidias payroll.

Increase in net margins of over 2% in less than 3 months means that its customers are are being milked.

 

[Fx1]

They are not making mega profits, they have a 15.6% operating margin which is on the low end profitability wise for companies in this sector, but you should know all this because it was mentioned earlier in the thread.

Im sorry but take a look at the net margins being made by other sectors

http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/margin.html

15.6% is a very good margin.

 

[willomz]

Why is it relevant what margins other sectors make?

Margins are different for very good reasons.

 

[Fx1]

I find it funny the Americans on this thread defending Nvidia are likely the same people who complain about $5 gas.

 

[Fx1]

Why is it relevant what margins other sectors make?

Margins are different for very good reasons.

there is a very good link between margins and blind loyalty from consumers.

Apple

Nvidia

Also Premier league football matches are now 50-70 GBP per game. Do you think they would get away with those prices unless they exploit that relationship..

 

[Genx87]

OP sounds bitter. Sounds like Nvidia had a decent quarter.

 

[DooKey]

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

54.4% margins helped by Keplar.

Im sure Titan will push that up further!

You like and own AMD so I can see how you are butt-hurt about this. Regardless of your feelings the market is determining the price. I honestly don't know why you really care if NV is making money since you don't own NV and have stated you prefer AMD. You got what you wanted at a cheaper price. Seems to me you should be happy. Just be glad NV is higher priced than AMD and buy AMD since they have to lower their prices to stay competitive in the eyes of the consumer.

For those who say AMD wipes the floor with NV this round you are considering something MOST buyers do not consider......Overclocking. Most buyers simply buy a card and pop it into a computer, load the drivers and game on. Stock out of the box performance it what sells video cards to the masses and because of this NV and AMD are neck and neck in performance. That performance is determined by the eyeball of the consumer and not a bunch of benchmarks on the geek websites. 10% greater performance overclocked doesn't matter to the mainstream consumer.

 

[DooKey]

I find it funny the Americans on this thread defending Nvidia are likely the same people who complain about $5 gas.

Dumb comparison. Video cards are a luxury item for the most part and gasoline is a commodity MOST people can't live without and have to buy on a regular basis if they want to get to work and keep food on their table. By the way, how do you like that overly taxed gas over in the EU?

As an American I love capitalism and will take it over socialism. NV is making money the old-fashioned way.....they are earning it. AMD should take lessons from Intel and NV.

 

[tviceman]

He is right, the HD7970GE is still faster than GTX680 and costs less.

Except he never said 7970GE, I just threw it in there with the latest released games to make my point. Look at his original post that I first responded to regarding performance of top tier cards (back on page 1 or 2 I believe). I know and realize that on the overall the 7970GE (not 7970) is faster than the gtx680, but the latest trend of games is bucking the OVERALL trend, despite most of these games being in AMD's GE lineup (something that people would normally cry a fit about if the games were TWIMTBP).

 

[f1sherman]

OP sounds bitter. Sounds like Nvidia had a decent quarter.

he should brace himself for Q2 because NVIDIA is going to clean up the Desktop


Shawn Webster - Macquarie
Okay. Well, going into the Q2. I think you said you expected the notebooks to be down sequentially, is that right? Notebook GPU?

Rob Csongor - Vice President of Investor Relations
Yes.

Shawn Webster - Macquarie
Okay. So, if I am doing the math right, then I am seeing double-digit increases in workstation, Tesla and/or your desktop business. Can you help me understand what's going to drive the big growth you are expecting in the other parts the GPU business for Q2?

Rob Csongor - Vice President of Investor Relations
Karen, do you want to answer that?

Karen Burns - Interim Chief Financial Officer, Vice President
Sure. Desktop, GPU, GTX is probably one of the biggest drivers.

Shawn Webster - Macquarie
And what is that? Is there something that you are expecting in terms of new games driving demand or what's the driver of it?

Karen Burns - Interim Chief Financial Officer, Vice President
We would like to wait to tell you about that.

Rob Csongor - Vice President of Investor Relations
Shawn. Give us 90 days. We will come back and report on that.

 

[Fx1]

he should brace himself for Q2 because NVIDIA is going to clean up the Desktop


Shawn Webster - Macquarie
Okay. Well, going into the Q2. I think you said you expected the notebooks to be down sequentially, is that right? Notebook GPU?

Rob Csongor - Vice President of Investor Relations
Yes.

Shawn Webster - Macquarie
Okay. So, if I am doing the math right, then I am seeing double-digit increases in workstation, Tesla and/or your desktop business. Can you help me understand what's going to drive the big growth you are expecting in the other parts the GPU business for Q2?

Rob Csongor - Vice President of Investor Relations
Karen, do you want to answer that?

Karen Burns - Interim Chief Financial Officer, Vice President
Sure. Desktop, GPU, GTX is probably one of the biggest drivers.

Shawn Webster - Macquarie
And what is that? Is there something that you are expecting in terms of new games driving demand or what's the driver of it?

Karen Burns - Interim Chief Financial Officer, Vice President
We would like to wait to tell you about that.

Rob Csongor - Vice President of Investor Relations
Shawn. Give us 90 days. We will come back and report on that.

Well anyone buying Nvidia runs the risk of 20nm AMD in 6 months time.

Also lets face it nothing on 28nm from Nvidia is going to win on price/performance

GK110 780 GTX could be an expensive dog of a GPU. It will either devalue Titan or not perform better than a 7970 GE.

 

[Fx1]

You like and own AMD so I can see how you are butt-hurt about this. Regardless of your feelings the market is determining the price. I honestly don't know why you really care if NV is making money since you don't own NV and have stated you prefer AMD. You got what you wanted at a cheaper price. Seems to me you should be happy. Just be glad NV is higher priced than AMD and buy AMD since they have to lower their prices to stay competitive in the eyes of the consumer.

For those who say AMD wipes the floor with NV this round you are considering something MOST buyers do not consider......Overclocking. Most buyers simply buy a card and pop it into a computer, load the drivers and game on. Stock out of the box performance it what sells video cards to the masses and because of this NV and AMD are neck and neck in performance. That performance is determined by the eyeball of the consumer and not a bunch of benchmarks on the geek websites. 10% greater performance overclocked doesn't matter to the mainstream consumer.

I have owned more Nvidia GPU's than i have AMD

Im not a Fanboy.

Im a Fx1boy

I cheer for team me. If i can get 100fps on Crysis 3 at 1600p for £100 then thats what ill buy.

 

[Fx1]

Except he never said 7970GE, I just threw it in there with the latest released games to make my point. Look at his original post that I first responded to regarding performance of top tier cards (back on page 1 or 2 I believe). I know and realize that on the overall the 7970GE (not 7970) is faster than the gtx680, but the latest trend of games is bucking the OVERALL trend, despite most of these games being in AMD's GE lineup (something that people would normally cry a fit about if the games were TWIMTBP).

There are 7970 which are running at GE speeds out of the box nearly. My MSI was 1010mhz stock. If your to lazy to install MSI burner and change the number to 1050 or 1100 then basically you should go buy a dell.

 

[f1sherman]

Well anyone buying Nvidia runs the risk of 20nm AMD in 6 months time.

And I risk getting hit by an Ethiopian anti-ballistic satellite every time I walk my dog.
I don't worry about it too much though

Also lets face it nothing on 28nm from Nvidia is going to win on price/performance

I very much doubt that. 28nm is in full swing, capacity issues very much gone and coupled with refresh that the reason why they're so bullish about GTX.