Are Nvidia's board partner's ruffled about Founder's Edition?

[Mopetar]

I think you missed the best part of the post you were answering.

Quote:
Every GP104 sold at 379/449 could be a loss for Nvidia.

Which is probably a complete load of BS. They also claimed that yields were good, so if that's true then it shouldn't be so expensive for them. They're outright lying about their ability to make money or the yields.

As RS pointed out, their gross margin projections for next quarter are amazing, so I have to call shenanigans on the idea that selling at the MSRP would cause a loss.

 

[RussianSensation]

Which is probably a complete load of BS. They also claimed that yields were good, so if that's true then it shouldn't be so expensive for them. They're outright lying about their ability to make money or the yields.

As RS pointed out, their gross margin projections for next quarter are amazing, so I have to call shenanigans on the idea that selling at the MSRP would cause a loss.

:thumbsup:

Since April 2011, their margins are in the 50% range and have been rising slowly, with last quarter's results hitting an astounding 57.55%. The quarter in which Pascal comes out is projected to be 57.7%. From Jan 31, 2004 to Jan 31, 2011, the margins were nowhere close to 52-57%.

https://ycharts.com/companies/NVDA/gross_profit_margin

We don't know the specific margins on FE cards or if they differ between 1070 and 1080. That means we have to make the most reasonable assumption that on average they are projected to be 57.7%. Now we know NV sells parts to AIBs and they then make the cards. That means on average once they sell the chips to AIBs, NV are projected to make 57.7%.

If the $599 MSRP card from AIBs already includes the AIB mark-up and NV's own 57.7% margin (since they sell the parts to AIBs before AIB's mark it up), it means that NV's $699 GTX1080 FE has margins of at least 57.7%. Why is that a reasonable assumption? Because if it didn't, selling FE cards would hurt NV's margins. This is what I mean when I say that NV already baked in their 57% gross margin into the $70-100 price premiums of FE cards.

All the excuses of Pascal costing billions of dollars to design, reference card's cooling system costing so much $ "NV loses money on it", 16nm wafers are so expensive that NV is forced to raise prices to maintain similar gross margins -- none of these claim align with NV's financials. The previous Fermi, Kepler and Maxwell architectures also cost billions to design and 3-4 years of development time. What's happening instead is NV keeps raising ASP per SKU, keeps raising prices per mm2, keeps raising prices per generation, keeps manipulating marketing names (i.e., 1070 is not a real x70 series card, and frankly 1080 is not an x80 card either). Introduction of the Titan series was there to make newer cards look good in comparison. That's why NV is comparing 1070 to a $1K Titan X, but this comparison is flawed in the first place since historically Titan X level card used to be $500-649, not $1000. The only questions remain are just how high will NV push prices over the next 2-3 generations after Pascal?; and, if they split the generation further into 3 distinct parts as we start approaching 7nm-10nm nodes where performance increases will be even harder to achieve?

Had NV released reference cards for $599 and $379 and then charged $699 and $449 for AIO CLC versions that were cherry-picked ASICs, that would have been far more justifiable. They could have called these the Overclocker's Edition.

 

[DDH]

You cannot be serious?! NV is projecting > 57% gross margins for Q1 2017. NV is not passing on the cost savings per transistor using 16nm node to consumers, while raising prices disproportionately relative to the cost of wafers. Secondly, the part about Titan cooler costing so much that a $100 mark-up required is 100% BS. To maintain 57% gross margin, the cooler itself is marked up to hit that mark. You cannot use the argument that rising 16nm costs and heatsink are "forcing" NV to raise prices when the firm set a record projected gross margin for this quarter. Also, the heatsink itself is a joke. Noctua NH-D15, Phanteks PH-TC14PE, Venom Medusa II, Dark Rock Pro 3, Cryorig R1 Ultimate, etc. all ship with 2 high quality fans, way larger surface area (250-300W TDP headroom), and those are sold in retail for <$100! Newegg had a sale on a Corsair H110i GTX 280mm Extreme Peformance for $60 USD -- that comes with a pair of 140mm fans. NV is simply throwing marketing BS to justify jacking up prices.

Facts are facts. NV's gross margins went up from barely 30% to almost 60% from about 2009-2016. Everything NV tells us about cost rising so we raised prices is a lie. What they are doing instead is pushing prices as high as the market will bear -- exactly what happened in the audiophile industry over the last 10 years or so. They also know their customers are loyal and of this subset, some of them only buy reference cards. That's why they are selling FE cards directly from their website, cutting out the retailer and pocketing $70-100 premium. They are doing it because they know people will pay the premium.

Besides, even IF the Titan cooler was $100 to make, it's still garbage and no more sophisticated than the $499 GTX580's was. NV chooses to waste $$$ on an intricate design and metal construction that no one cares about once the card is upside down in the case. What I care about is my card hitting 83C thermal limit, throttling clocks, while running louder than an after-market card with the same GP104 chip.

Go back to AnandTech's HD6950 review. Vapor chamber cooler, larger surface area than Titan cooler. That card cost $299.

Even for 2-way SLI, blowers are still garbage on 180W cards. Who spends $1400 US on 1080 SLI and has a case with poor airflow? Really? Throw that case into the garbage, get Phanteks Enthoo Pro for $100 and get GTX 1080 Xtreme SLI. It will destroy 1080 FE SLI in every way -- idle, load noise, overclocking headroom.

Besides, the 8-pin power connector and 5+1 power phases on the FE card are impacting overclocking headroom. At only 2000mhz, the 1080 is already at 220W.
https://www.overclockers.ru/lab/76273_4/obzor-i-testirovanie-videokarty-nvidia-geforce-gtx-1080.html

To get the best out of 1080 will require an after-market card. The $699 FE will lose to any good AIB card from MSI, Gigabyte, Inno3D, Zotac, etc.

Well I did say speculate. I have no access to nvidias actual financials so I cant honestly know.

I know youre passionate about these topics, but we're only having a conversation here. Your post comes across quite aggressive, perhaps not directed but me but rather nvidia. Anyway, regardless of what nvidias strategy is, only time will tell if it works for them

 

[maddie]

Well I did say speculate. I have no access to nvidias actual financials so I cant honestly know.

I know youre passionate about these topics, but we're only having a conversation here. Your post comes across quite aggressive, perhaps not directed but me but rather nvidia. Anyway, regardless of what nvidias strategy is, only time will tell if it works for them

I think what he's saying is that you DO have enough access to their financials to make an educated assessment. Margins have been rising at the same time prices were increasing. This is in addition to numerous money loosing sidesteps. ARM chips,etc, so the core enterprise [GPUs], have been carrying non profitable burdens, making them even more profitable than the overall margin will suggest.

For them to claim the need to raise prices because of external factors, for example, new node, development cost, etc, is BS. If margins stayed the same, or fell, then yes, increased prices would be justified by those excuses.

 

[Lepton87]

:thumbsup:

Since April 2011, their margins are in the 50% range and have been rising slowly, with last quarter's results hitting an astounding 57.55%. The quarter in which Pascal comes out is projected to be 57.7%. From Jan 31, 2004 to Jan 31, 2011, the margins were nowhere close to 52-57%.

https://ycharts.com/companies/NVDA/gross_profit_margin

We don't know the specific margins on FE cards or if they differ between 1070 and 1080. That means we have to make the most reasonable assumption that on average they are projected to be 57.7%. Now we know NV sells parts to AIBs and they then make the cards. That means on average once they sell the chips to AIBs, NV are projected to make 57.7%.

If the $599 MSRP card from AIBs already includes the AIB mark-up and NV's own 57.7% margin (since they sell the parts to AIBs before AIB's mark it up), it means that NV's $699 GTX1080 FE has margins of at least 57.7%. Why is that a reasonable assumption? .

I don't what if we can make such assumptions on so little data. You don't know the actual margins on the Pascal cards what you stated are average margins from all products. I think the actual margins on the 1070 and especially the 1080 are higher then that but remember that they also have TESLA and QUADRO line-ups included in that where margins are way higher.

 

[poohbear]

Well I did say speculate. I have no access to nvidias actual financials so I cant honestly know.

I know youre passionate about these topics, but we're only having a conversation here. Your post comes across quite aggressive, perhaps not directed but me but rather nvidia. Anyway, regardless of what nvidias strategy is, only time will tell if it works for them

U don't have access to Nvidia's financial? U can access them like the rest of us in their quarterly reports and buy stock if u so chose. In the past 4 days since they reported earnings they have gone up 22%! Most companies go up 10-12% after a good report, Nvida stock basically exploded! They release their reports every 3 months as a publicly traded company. They might be charging alot, but those of us who own Nvidia stock sure aren't complaining.

Anyways, I agree that a price war needs to start. If nvidia thinks ppl r gonna pay $700 because there's no competition, then they'll charge $700 no questions asked.

 

[dark zero]

NVIDIA is trying to get as much margin as they can since their ARM project failed hard and they only have their GPGPU side to get as much margin as possible.

 

[moonbogg]

I had to google that. OK here it is. I will not read every single post in this thread carefully enough to ensure I didn't accidentally parody someone. I will certainly not provide a smiley face to indicate I was kidding, because believe you me talking to you, I was as serious as a heart attack. Best Buy will sell reference cards for over $700. If they don't, I will eat a handful of cat food and post proof right here in this thread.

https://youtu.be/71bngczBq_M

 

[ShintaiDK]

https://youtu.be/71bngczBq_M

Omg, that's effort!

Your cat(s) will look oddly at you from now on and fight for the food!

 

[sam_816]

https://youtu.be/71bngczBq_M

man of your word. respect dear sir!!

 

[crisium]

Welp, no one can ever question moonbogg's integrity now.

 

[sweetusernames]

A man like moonbogg is not the hero AT wants, but the hero AT needs.

Those aftermarket 1070/1080s at the MSRP can't come any sooner, really wanna see what GP104 is truly made of.

 

[OatisCampbell]

I think what he's saying is that you DO have enough access to their financials to make an educated assessment. Margins have been rising at the same time prices were increasing. This is in addition to numerous money loosing sidesteps. ARM chips,etc, so the core enterprise [GPUs], have been carrying non profitable burdens, making them even more profitable than the overall margin will suggest.

For them to claim the need to raise prices because of external factors, for example, new node, development cost, etc, is BS. If margins stayed the same, or fell, then yes, increased prices would be justified by those excuses.

It always amazes me how some people on the forums don't understand business at all.

NVIDIA doesn't have to "justify" making as much profit as they can, nor do they need to apologize. They are doing what successful companies do- maximizing profits, reinvesting in the business, paying stock holders, and banking profits for times they aren't first or best.

They are not our friends, they do not care what we think of their pricing.

There is only one thing you can do they will care about- not buy their products. If enough others follow suit, they will change.

Personally I see the bright side of what NVIDIA does for pricing. My 7970 and 290 were the best deals I've ever gotten on high end cards.

 

[provost]

I don't what if we can make such assumptions on so little data. You don't know the actual margins on the Pascal cards what you stated are average margins from all products. I think the actual margins on the 1070 and especially the 1080 are higher then that but remember that they also have TESLA and QUADRO line-ups included in that where margins are way higher.

Margins are most likely even better on Pascal than on Maxwell (more dies out of the same wafer... that math is not rocket science, unless one chooses to act uninformed... Lol) and r&d didn't cost " billions of dollars" for Pascal (may be cumulative from Kepler to Pascal, but billions is still a stretch). The margins from professional segment won't move the needle too much on a weighted average basis, but lower margins from declining OEM business would, and even then the margin expansion has been there. At this point, the gaming customers are subsidizing adventures of the flying cars, deep exploration, Intel future royalty gap, bye bye OEM business, and of course and most importantly returning cash to the shareholders (at least the last one I can understand... Lol)