Fascinating Story on the RV770

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thilanliyan

Lifer
Jun 21, 2005
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Originally posted by: chizow
especially since they once again posted a loss in the last quarter? Its easy to substantiate my statement about it ultimately hurting them, as they're not maximizing profits on a winning part now which will squeeze them down the line if/when they don't have a winning part. Even the article acknowledges this. But hey, its not like AMD has screwed things up in the past when they had a winner on their hands (see: Athlon 64 vs. P4).

I'm fairly certain the graphics devision of AMD was actually profitable.
http://theovalich.wordpress.co...fit-in-years-non-gaap/

"AMD GPG filed the very first profit after AMD?s acquisition in 2006"

They needed to do more than just maximize profit on this series. Creig got it spot on...they needed market share, image, etc which will be good for them in the long term after what happened with G80 and R600. I honestly could care less about a halo product...if I can get a great performing card for $250-$350 I'm happy and I'm sure a lot of others feel the same way.
 

SlowSpyder

Lifer
Jan 12, 2005
17,305
1,001
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Originally posted by: chizow
Originally posted by: Janooo
Originally posted by: chizow
Pretty good article, a bit disappointing as there wasn't much on how RV770 was so much better than its late and underwhelming predecessors. I would've been more interested in reading what specific areas of the GPU they fixed. I also agree that more info on RV870 would've been nice.

Didn't see much in there about pricing, as to why ATI didn't charge more for a high performing part, sounds like they just targetted price points without considering the competition's pricing. Sure its great for consumers, but it sure isn't helping AMD's bottomline and may ultimately hurt them in the long run.

Also no mention of ATI's very public driver problems. Considering both Anand and Derek have spent considerable space covering monthly driver issues, I'm a bit surprised he didn't directly confront them to affect change.

There is no way you can support this statement. Please, stop spreading FUD.

How is charging less for a part that is competitive at a higher price point helping their bottom-line, especially since they once again posted a loss in the last quarter? Its easy to substantiate my statement about it ultimately hurting them, as they're not maximizing profits on a winning part now which will squeeze them down the line if/when they don't have a winning part. Even the article acknowledges this. But hey, its not like AMD has screwed things up in the past when they had a winner on their hands (see: Athlon 64 vs. P4).

It would seem to me that AMD thought that they could make more money by shifting a larger volume of 48x0 cards at less profit per card then selling less cards at a higher profit per card. Do we know how much it costs to build a 4850/4870? My guess is AMD is making a decent profit on each one sold. Remember, AMD wants to capture the performance and mainstream market, they priced their parts accordingly.

I do think AMD under estimated just how low Nvidia would go on their price cuts. A GTX280/260 probably costs a lot of money to build with their 448bit/512bit bus and large GPU's. They probably thought that Nvidia wouldn't be able to drop the GTX2x0 cards as much as they did, so that they'd still have a bit of a price advantage.

I thought AMD's GPU division made a few bucks last quarter? I know AMD as a whole didn't, but I thought the GPU section did. We'll never know if AMD would have made more or less if they priced their parts higher, so suggesting that they should have is pretty much a guess at best. Perhaps they would have posted a bigger loss if they priced their 4870 at $399... we'll never know. I know that I'm willing to buy a $220 4870, I wouldn't buy it or a GTX260 at $400 if that's what they were priced at.
 

akugami

Diamond Member
Feb 14, 2005
5,991
2,319
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Great article. Fascinating look into the backdrop of ATI's GPU development and the risks they took to get the RV770 out, even if some of it was overly broad. I guess ATI has to keep some of its trade secrets.

What some fail to realize is that price/performance wise, ATI destroyed nVidia and forced nVidia to make drastically less per GPU. Higher volume shipments due to the price/performance of the RV770 GPU's alone should make up for some of the lower profit per GPU. Design costs aside, and assuming similar yields, ATI should be making more money per GPU in the categories it competes with nVidia in.

ATI built these parts with the mid range in mind and I'm sure that while they could have made more per individual GPU, putting a dent into nVidia AND making a decent profit will help them in the long run. Now, nVidia is still making a profit but the line is much tighter. Instead of walking along a wooden plank on the road to profitability, it is walking on a tightrope.
 

Creig

Diamond Member
Oct 9, 1999
5,170
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Originally posted by: chizow
NV on the other hand goes for the jugular when they have a killer part and does well even when they don't.

No, and no. No, Nvidia doesn't go for the jugular, they go for the wallets. OUR wallets. Personally, I'm just as glad AMD isn't as greedy as Nvidia. And no, Nvidia is not doing well with the GT200. They had to substantially cut their prices after the 48X0 series came out. And the GT200 is a big, EXPENSIVE, low yield GPU to make. Having to cut $150-$200 per card after the 48X0 cards came out is not "doing well".

Originally posted by: chizow
And I guess you're finally acknowledging NV will win in a coin-flip situation against ATI, which is why ATI would choose to cut prices instead of taking NV on with a superior part.

Why would Nvidia win a coin flip? Each company has its own unique features. Nvidia has SLI, PhysX and 3D glasses while ATI has CrossFire, DirectX 10.1 and multiple monitor support in Crossfire.


Originally posted by: chizow
In the long run it hurts ATI as much as NV as they've set consumer expectations for their parts in terms of price to performance. As we can see with current pricing, there's not a whole lot of room when you start at the $200-$300 range.

It doesn't hurt AMD at all. They're not the ones who were trying to charge us $650 for a single-GPU video card. Nvidia is the one hurting here. The 48X0 series came out on the 55nm process while the GT200 was constructed using the older 65nm technology. AMD purportedly had great yields right from Day 1 while the GT200 yield was rumored to be at an abysmal 40% at launch. Not to mention the fact that the RV770 contains only 965 million transistors while the GT200 is using over 1.4 billion. So AMD is fitting more dies per wafer than Nvidia and getting more viable cores per wafer than Nvidia. That means that AMD can drop their price per unit while still maintaining a good profit margin. That's something Nvidia can't claim for this round.
 

chizow

Diamond Member
Jun 26, 2001
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Originally posted by: Bateluer
chizow, AMD's bottom line was raised by the R770 chips. They still posted a loss overall, but less of a loss primarily because of their pricing of the R700 family. AMD's Phenom is the product that was dragging everything down. Hopefully, the Phenom II will change that.
And that's the point really. Still a loss. Except the quarters they're taking huge write-offs on depreciated assets, they're losses haven't been huge, less than NV's typical quarterly profits of 100-200m. Sure its speculation to say whether they would've made more/less if they priced it differently, but the fact remains they chose to lowball and were once again unprofitable.

Originally posted by: thilan29
Originally posted by: chizow
especially since they once again posted a loss in the last quarter? Its easy to substantiate my statement about it ultimately hurting them, as they're not maximizing profits on a winning part now which will squeeze them down the line if/when they don't have a winning part. Even the article acknowledges this. But hey, its not like AMD has screwed things up in the past when they had a winner on their hands (see: Athlon 64 vs. P4).

I'm fairly certain the graphics devision of AMD was actually profitable.
http://theovalich.wordpress.co...fit-in-years-non-gaap/

"AMD GPG filed the very first profit after AMD?s acquisition in 2006"

They needed to do more than just maximize profit on this series. Creig got it spot on...they needed market share, image, etc which will be good for them in the long term after what happened with G80 and R600. I honestly could care less about a halo product...if I can get a great performing card for $250-$350 I'm happy and I'm sure a lot of others feel the same way.
Its non-GAAP and definitely includes the one-time sale of fab equipment. I'm pretty sure they were still in the red in their SEC filings, although their financials haven't been worth reading for years.

Also, I'm sure you and everyone else who bought a 4800 (including GTX 260 owners) were tickled pink to get nice card for cheap, but you'd be crazy to think it won't have a lasting impact on their products and margins down the line, especially in a down cycle. You think its an accident the idea of paying over $200 for a Phenom X4 seems insane even if it performs within 10% of a Core 2 Quad that costs 1.5x as much? This dates all the way back to Athlon/64 pricing even when AMD held the performance crown.
 

chizow

Diamond Member
Jun 26, 2001
9,537
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Originally posted by: Creig
No, and no. No, Nvidia doesn't go for the jugular, they go for the wallets. OUR wallets. Personally, I'm just as glad AMD isn't as greedy as Nvidia. And no, Nvidia is not doing well with the GT200. They had to substantially cut their prices after the 48X0 series came out. And the GT200 is a big, EXPENSIVE, low yield GPU to make. Having to cut $150-$200 per card after the 48X0 cards came out is not "doing well".
Rofl, NV knows how to make money yes. That's why they will undoubtedly survive through down cycles. AMD? Who knows. At this point the US government and some wealthy investors in Dubai are the only thing keeping them afloat.

AMD isn't doing you or anyone any favors by undercutting the market, they're doing so because that's what they think the market will bear.

And please stop with the garbage about GT200 being too expensive to profit from, people like you were claiming the same months ago when they dropped pricing to $400, then $300, and now sub-$200. The fact is Nvidia once again posted a profit despite fewer sales on some incredibly "unprofitable" part and AMD once again posted losses.

Why would Nvidia win a coin flip? Each company has its own unique features. Nvidia has SLI, PhysX and 3D glasses while ATI has CrossFire, DirectX 10.1 and multiple monitor support in Crossfire.
Brand recognition and preference. You just acknowledged such with your comments about how AMD had to "undercut and steal" in order to sell parts instead of taking NV on at established price points. GTX 260 at $429 and 4870 at $400, GTX 280 at $650 and 4870X2 at $600, all in-line with previous high-end price points of the past that would still give AMD the edge in price to performance. Instead they got into a price war that they can't possibly hope to win and everyone makes less money.

It doesn't hurt AMD at all. They're not the ones who were trying to charge us $650 for a single-GPU video card. Nvidia is the one hurting here. The 48X0 series came out on the 55nm process while the GT200 was constructed using the older 65nm technology. AMD purportedly had great yields right from Day 1 while the GT200 yield was rumored to be at an abysmal 40% at launch. Not to mention the fact that the RV770 contains only 965 million transistors while the GT200 is using over 1.4 billion. So AMD is fitting more dies per wafer than Nvidia and getting more viable cores per wafer than Nvidia. That means that AMD can drop their price per unit while still maintaining a good profit margin. That's something Nvidia can't claim for this round.
Once again, the bottomline tells a very different story. NV in the black. AMD in the red. NV undercutting AMD pricing consistently, again with their core 216 instead of scaling production back, and still posting a profit.

They may gain some in market share, but it isn't having any substantial impact on their bottomline due to their aggressive pricing. Its only going to be worst if they aren't competitive in future cycles, as no one is willing to pay market for underperforming AMD parts. Hell even their biggest fans aren't willing to pay good money for their winning parts. :laugh:
 

SlowSpyder

Lifer
Jan 12, 2005
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Chizow, the thing is that we don't know if it would have helped or hurt AMD to price them higher. AMD's loss may have been even bigger if they priced their cards higher. The loss may have been less. We don't know. As you've pointed out Nvidia is selling their cards for far less then they originally thought the could/should sell them at (and apparantly at the higher prices you were happy with) and still managed to make a profit.
 

Janooo

Golden Member
Aug 22, 2005
1,067
13
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Originally posted by: chizow
Originally posted by: Janooo
Originally posted by: chizow
Pretty good article, a bit disappointing as there wasn't much on how RV770 was so much better than its late and underwhelming predecessors. I would've been more interested in reading what specific areas of the GPU they fixed. I also agree that more info on RV870 would've been nice.

Didn't see much in there about pricing, as to why ATI didn't charge more for a high performing part, sounds like they just targetted price points without considering the competition's pricing. Sure its great for consumers, but it sure isn't helping AMD's bottomline and may ultimately hurt them in the long run.

Also no mention of ATI's very public driver problems. Considering both Anand and Derek have spent considerable space covering monthly driver issues, I'm a bit surprised he didn't directly confront them to affect change.

There is no way you can support this statement. Please, stop spreading FUD.

How is charging less for a part that is competitive at a higher price point helping their bottom-line, especially since they once again posted a loss in the last quarter? Its easy to substantiate my statement about it ultimately hurting them, as they're not maximizing profits on a winning part now which will squeeze them down the line if/when they don't have a winning part. Even the article acknowledges this. But hey, its not like AMD has screwed things up in the past when they had a winner on their hands (see: Athlon 64 vs. P4).
Maybe by selling more cards? I can not prove it, and you can not prove it as well. As a matter of fact nobody can prove it. Not even AMD's CEO. Nobody knows how the market would react if the price was higher. Nobody knows how many cards they would sell.
But you sure know it's not helping them. Who are you?
 

thilanliyan

Lifer
Jun 21, 2005
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Originally posted by: chizow
Its non-GAAP and definitely includes the one-time sale of fab equipment. I'm pretty sure they were still in the red in their SEC filings, although their financials haven't been worth reading for years.

Yeah I know AMD as a company was in the red without that sale but read what I quoted...ATI was in the black.

EDIT: Here's the financials:
http://www.amd.com/us-en/asset...ets/Q308Financials.pdf

I'm fairly certain ATI was in the black.

Originally posted by: Wreckage
Originally posted by: thilan29

I'm fairly certain the graphics devision of AMD was actually profitable.

Thanks to selling off part of ATI to Broadcom.
http://arstechnica.com/journal...ess-in-deal-worth-192m

"and hopes to complete the transaction during Q4 2008"

So this wouldn't be counted towards Q3 would it?
 

SlowSpyder

Lifer
Jan 12, 2005
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Originally posted by: thilan29
Originally posted by: Wreckage
Originally posted by: thilan29

I'm fairly certain the graphics devision of AMD was actually profitable.

Thanks to selling off part of ATI to Broadcom.
http://arstechnica.com/journal...ess-in-deal-worth-192m

"and hopes to complete the transaction during Q4 2008"

So this wouldn't be counted towards Q3 would it?

It was completed after Q3, but I have no idea when money was counted or if it was counted yet. Also, the deal ended up being $141.5 million from what I saw mentioned.

http://www.wtopnews.com/?nid=108&sid=1465970
 

thilanliyan

Lifer
Jun 21, 2005
11,944
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Originally posted by: SlowSpyder
It was completed after Q3, but I have no idea when money was counted or if it was counted yet. Also, the deal ended up being $141.5 million from what I saw mentioned.

http://www.wtopnews.com/?nid=108&sid=1465970

Ah, well if that was completed in October then I don't think it would be counted in Q3. I think their Q3 ends at the end of September from the financials link above.
 

SlowSpyder

Lifer
Jan 12, 2005
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Originally posted by: thilan29
Originally posted by: SlowSpyder
It was completed after Q3, but I have no idea when money was counted or if it was counted yet. Also, the deal ended up being $141.5 million from what I saw mentioned.

http://www.wtopnews.com/?nid=108&sid=1465970

Ah, well if that was completed in October then I don't think it would be counted in Q3. I think their Q3 ends at the end of September from the financials link above.

It was put in motion, or at least announced in Q3 I believe. So, when the money hit the books, I'm not sure. I really don't know much about corporate financials other then profit = good, loss = bad. So it is possible the money was in the Q3 report and the transition finished after, but maybe not... I don't know.
 

jzodda

Senior member
Apr 12, 2000
824
0
0
That was a very good article. Fun to read and interesting. I hope that the next line of cards they put out are as good as this one is. Keeps those prices at reasonable levels.
 

chizow

Diamond Member
Jun 26, 2001
9,537
2
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Originally posted by: Janooo
Maybe by selling more cards? I can not prove it, and you can not prove it as well. As a matter of fact nobody can prove it. Not even AMD's CEO. Nobody knows how the market would react if the price was higher. Nobody knows how many cards they would sell.
But you sure know it's not helping them. Who are you?
Someone who sees another quarter in the red for AMD and another quarter in the black for Nvidia. No one knows if they would've sold more or less if they priced parts differently, we do know however they still weren't able to turn a profit despite having a winning product on their hands. And we all know what happens when they don't have a winner.......

Originally posted by: SlowSpyder
Chizow, the thing is that we don't know if it would have helped or hurt AMD to price them higher. AMD's loss may have been even bigger if they priced their cards higher. The loss may have been less. We don't know. As you've pointed out Nvidia is selling their cards for far less then they originally thought the could/should sell them at (and apparantly at the higher prices you were happy with) and still managed to make a profit.
Same as above, the difference is NV will undoubtedly return to high-end pricing with a new high-end part and people will pay for it. AMD has no where else to go, they've set the market for their parts and apparently are happy with it.

Also for you guys arguing over whether or not they were profitable in Q3:

AMD Form 10-Q for Q3 '08 127M Loss

Not going to argue over non-GAAP unaudited financials over one time asset sales, that link is what investors/creditors and the SEC refer to and that's really all that counts.
 

SlowSpyder

Lifer
Jan 12, 2005
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I don't think anyone is arguing that AMD didn't take a loss. I don't see why you would think that.

People were discussing if the graphics division made money or not, and if the Broadcom deal had yet counted into AMD's bottom line.

Another way of looking at it is with the release of the 48x0 series cards AMD went from losing almost $400 million the quarter before (and well over $1 billion the two quarters before that) to losing $127 million the quarter in which the new parts were available, all while still having lagging CPU revenues. Obviously profitability is the goal, and they're not there yet, but you're making a lot of assumptions based on one quarter of a product being available.
 

Creig

Diamond Member
Oct 9, 1999
5,170
13
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Originally posted by: chizow
AMD isn't doing you or anyone any favors by undercutting the market, they're doing so because that's what they think the market will bear.

Sure they are. But they also have more room to lower prices to due a less expensive/higher yield GPU.

Originally posted by: chizow
And please stop with the garbage about GT200 being too expensive to profit from, people like you were claiming the same months ago when they dropped pricing to $400, then $300, and now sub-$200. The fact is Nvidia once again posted a profit despite fewer sales on some incredibly "unprofitable" part and AMD once again posted losses.

Sure they posted a profit. But you and I both know it's substantially less than it would have been if AMD had not released the 48X0 series. And the GT200 is not Nvidia's only product. They have chipset sales, G92 sales, mobile products, etc. So the GT200 could still be selling either at cost or actually below cost and Nvidia could still show a profit. Nobody (except you) is denying that the GT200 is a large, expensive chip to produce. Whether or not Nvidia is showing much (or any) profit from them is information that's unavailable to us. And I doubt Nvidia would want to share it, either.


Originally posted by: chizow
Brand recognition and preference. You just acknowledged such with your comments about how AMD had to "undercut and steal" in order to sell parts instead of taking NV on at established price points.

I said no such thing. I said that by pricing their cards the way they did, they ended up taking away sales from Nvidia. That's a far cry from "had to undercut and steal in order to sell parts". I'm sure that ATI's 48X0 series would have sold on the strength of their benchmarks alone, just not in the same volume they did at the prices they were actually released at. Nice try, though.


Originally posted by: chizow
GTX 260 at $429 and 4870 at $400, GTX 280 at $650 and 4870X2 at $600, all in-line with previous high-end price points of the past that would still give AMD the edge in price to performance. Instead they got into a price war that they can't possibly hope to win and everyone makes less money.

Nvidia's GT200 is simply more expensive to make than the RV770 due to its process size, number of transistors and yield. This means that ATI can undercut Nvidia while maintaining a higher profit margin. It's simple economics.


Originally posted by: chizow
Once again, the bottomline tells a very different story. NV in the black. AMD in the red. NV undercutting AMD pricing consistently, again with their core 216 instead of scaling production back, and still posting a profit.

AMD is more than just their graphics division. Which, by the way, IS showing a profit.


Originally posted by: chizow
They may gain some in market share, but it isn't having any substantial impact on their bottomline due to their aggressive pricing. Its only going to be worst if they aren't competitive in future cycles, as no one is willing to pay market for underperforming AMD parts. Hell even their biggest fans aren't willing to pay good money for their winning parts. :laugh:

Riiiggghhhttt... Whatever. :roll:


When you and Wreckage are done derailing the thread, perhaps we can get back to discussing the article.
 

thilanliyan

Lifer
Jun 21, 2005
11,944
2,175
126
Originally posted by: chizow
Also for you guys arguing over whether or not they were profitable in Q3:

AMD Form 10-Q for Q3 '08 127M Loss

Not going to argue over non-GAAP unaudited financials over one time asset sales, that link is what investors/creditors and the SEC refer to and that's really all that counts.

No one is arguing AMD was in the red (except you) without that sale. I provided links to show ATI was in the black...did you read them at all (what you posted has exactly the same info as what I posted...try going to the section where it shows operating income for graphics)?

You posted this originally:
"How is charging less for a part that is competitive at a higher price point helping their bottom-line, especially since they once again posted a loss in the last quarter?"

So if ATI is profitable then it DOES help their bottom line doesn't it?
 

WelshBloke

Lifer
Jan 12, 2005
31,444
9,348
136
Originally posted by: Wreckage
Originally posted by: chizow

Sure they did okay, but they could've done better. All they managed to do was lower NV's margin (they were still profitable in Q3, unlike ATI).

Yeah other than the initial lower price (which don't get me wrong was great). I'm not sure what else is special about the RV770. Granted it was a much better offering than what they had out before, but it did not break any new ground or speed records.

Either way I'm glad to see AMD competitive. Hopefully the Phenom II will do the same. The prices of i7 are starting to get up there.

I don't want any monopolies.

You did look at the respective die sizes of competing parts didn't you?

 

aldamon

Diamond Member
Aug 2, 2000
3,280
0
76
Originally posted by: Creig
Sure they posted a profit. But you and I both know it's substantially less than it would have been if AMD had not released the 48X0 series. And the GT200 is not Nvidia's only product. They have chipset sales, G92 sales, mobile products, etc. So the GT200 could still be selling either at cost or actually below cost and Nvidia could still show a profit. Nobody (except you) is denying that the GT200 is a large, expensive chip to produce. Whether or not Nvidia is showing much (or any) profit from them is information that's unavailable to us. And I doubt Nvidia would want to share it, either.

What chizow is saying is that those potential profits have evaporated. They haven't gone to AMD because they priced their cards too low. They've essentially undercut themselves by being so aggressive. They can't keep doing that and expect to survive. I love it as a consumer, but it's not smart. Remember, AMD paid $5.4 billion for ATI. Expectations are probably higher than a profitable quarter once in a while.

 

chizow

Diamond Member
Jun 26, 2001
9,537
2
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Originally posted by: Creig
Sure they are. But they also have more room to lower prices to due a less expensive/higher yield GPU.
The GPU might be smaller, but that doesn't mean it costs less. Nvidia undoubtedly enjoys volume pricing and if you look up TSMC's revenue by partner, Nvidia is at the top, by far. There's also other factors to consider like RAM price along with high-end PWM modules used on the 4870s that weren't seen on any parts prior.

Sure they posted a profit. But you and I both know it's substantially less than it would have been if AMD had not released the 48X0 series. And the GT200 is not Nvidia's only product. They have chipset sales, G92 sales, mobile products, etc. So the GT200 could still be selling either at cost or actually below cost and Nvidia could still show a profit. Nobody (except you) is denying that the GT200 is a large, expensive chip to produce. Whether or not Nvidia is showing much (or any) profit from them is information that's unavailable to us. And I doubt Nvidia would want to share it, either.
Yep, they posted a profit, which is a far cry from the doom and gloom you and others were spouting about losses due to the high chip price per GT200. Yes they have other businesses but the discrete GPU market is still the overwhelming portion of their revenue, @75% I believe. You think that entire 800M in quarterly revenue is coming from $60AR 9600GSOs?

Like I said before, there's no way they're taking a loss on a GTX 260 at $300 and there's certainly no way they're going to price a C216 even more aggressively around $200 in hopes of selling EVEN MORE parts if they're taking such a huge loss. This isn't Sony or MS with consoles hoping they make their money back with game attach rates, they're simply not taking $100 loss per card and posting a profit. PERIOD.

I think you and others grossly overestimate how much one of these parts actually cost to make and fail to see the majority of the margin is just reinvested into R&D, which helps ensure the quality of future products. Its a concept AMD has never been able to grasp and a notion the consuming public has never been able to accept: paying a premium for high-end AMD parts.

I said no such thing. I said that by pricing their cards the way they did, they ended up taking away sales from Nvidia. That's a far cry from "had to undercut and steal in order to sell parts". I'm sure that ATI's 48X0 series would have sold on the strength of their benchmarks alone, just not in the same volume they did at the prices they were actually released at. Nice try, though.
  • Originally posted by: Creig
    Let's see, price it higher and try to compete directly with Nvidia for sales. Or... Price it lower, steal sales from Nvidia, garner enthusiastic public support for offering low cost/high performance cards while simultaneously forcing Nvidia to cut their own prices, drastically reducing (or eliminating) Nvidia's expected profit margin on an already expensive die.

Uh, ya. Sounds like you're a lot more confident than ATI was, or they wouldn't have undercut the market so drastically from the outset.

Nvidia's GT200 is simply more expensive to make than the RV770 due to its process size, number of transistors and yield. This means that ATI can undercut Nvidia while maintaining a higher profit margin. It's simple economics.
Already covered, simple economics leave you with the impression a graphics chip costs $200.

AMD is more than just their graphics division. Which, by the way, IS showing a profit.
Computing Solutions division is showing a profit too if you're going to use Operating Income as a metric, but then again that's not what's showing on their bottomline.

Riiiggghhhttt... Whatever. :roll:

When you and Wreckage are done derailing the thread, perhaps we can get back to discussing the article.
Rofl, this topic was derailed because I correctly pointed out RV770 still wasn't enough to turn a profit for AMD and a few like yourself took exception to it.
 

Tempered81

Diamond Member
Jan 29, 2007
6,374
1
81
Absolutely an amazing product. Great job! :thumbsup: Props to the Rv770 designers, engineers, Carrell & Dave.

If only we could address faults in these areas:

1. Driver performance, CCC, crossfire programming, gaming profiles.
2. Installation, usability, compatibility, end user experience.
3. PCI-E power, board layout, cooling solutions, hardware QC.

The future of ATX form factor, Motherboard layout specs, internal design (benefits both ATI & NV)

ATI's fellows just cant hand a video gamer or PC enthusiast a fresh lonesome RV770 chip (or two on a stick), and say, " look how fast your games are now!!! " The aforementioned has to accompany the GPU itself to provide a truly satisfying gaming experience.

IMO, that is sadly where Nv excels. Will you guys please hire some genius PM's to handle the software side? lol
 

SlowSpyder

Lifer
Jan 12, 2005
17,305
1,001
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Originally posted by: WelshBloke
Originally posted by: Wreckage
Originally posted by: chizow

Sure they did okay, but they could've done better. All they managed to do was lower NV's margin (they were still profitable in Q3, unlike ATI).

Yeah other than the initial lower price (which don't get me wrong was great). I'm not sure what else is special about the RV770. Granted it was a much better offering than what they had out before, but it did not break any new ground or speed records.

Either way I'm glad to see AMD competitive. Hopefully the Phenom II will do the same. The prices of i7 are starting to get up there.

I don't want any monopolies.

You did look at the respective die sizes of competing parts didn't you?

The reason the 4870 are so popular is the same reason the 8800GT was so popular. It didn't break new ground and wasn't the fastest thing you could buy, but the performance you get for the money is incredible. The 8800GT gave you very near 8800GTX performance in many cases for a lot less money. The 4870 gave you GTX260 performance (and then some) for under $300 while Nvidia wanted over $400 for their part. Wreckage, you can't see why that would make for a very popular part with a lot of positive buzz around it?
 

chizow

Diamond Member
Jun 26, 2001
9,537
2
0
Originally posted by: aldamon
Originally posted by: Creig
Sure they posted a profit. But you and I both know it's substantially less than it would have been if AMD had not released the 48X0 series. And the GT200 is not Nvidia's only product. They have chipset sales, G92 sales, mobile products, etc. So the GT200 could still be selling either at cost or actually below cost and Nvidia could still show a profit. Nobody (except you) is denying that the GT200 is a large, expensive chip to produce. Whether or not Nvidia is showing much (or any) profit from them is information that's unavailable to us. And I doubt Nvidia would want to share it, either.

What chizow is saying is that those potential profits have evaporated. They haven't gone to AMD because they priced their cards too low. They've essentially undercut themselves by being so aggressive. They can't keep doing that and expect to survive. I love it as a consumer, but it's not smart. Remember, AMD paid $5.4 billion for ATI. Expectations are probably higher than a profitable quarter once in a while.

Exactly. And this is the bed they're going to have to lie in, even when they don't have a winning part. If people don't see cause for concern here I just don't know what to tell you.
 

akugami

Diamond Member
Feb 14, 2005
5,991
2,319
136
Originally posted by: chizow
Originally posted by: aldamon
Originally posted by: Creig
Sure they posted a profit. But you and I both know it's substantially less than it would have been if AMD had not released the 48X0 series. And the GT200 is not Nvidia's only product. They have chipset sales, G92 sales, mobile products, etc. So the GT200 could still be selling either at cost or actually below cost and Nvidia could still show a profit. Nobody (except you) is denying that the GT200 is a large, expensive chip to produce. Whether or not Nvidia is showing much (or any) profit from them is information that's unavailable to us. And I doubt Nvidia would want to share it, either.

What chizow is saying is that those potential profits have evaporated. They haven't gone to AMD because they priced their cards too low. They've essentially undercut themselves by being so aggressive. They can't keep doing that and expect to survive. I love it as a consumer, but it's not smart. Remember, AMD paid $5.4 billion for ATI. Expectations are probably higher than a profitable quarter once in a while.

Exactly. And this is the bed they're going to have to lie in, even when they don't have a winning part. If people don't see cause for concern here I just don't know what to tell you.

Economies of scale. I can make $200 from a $500 MSRP product but I can only sell one of them per 1000 people or I can make $50 per product with a $350 MSRP and sell 10 of them per 1000 people. Just because AMD (or nVidia) is making less per individual product does not mean they are making less money overall. Business 101 FTW.

The fact is that with similar performing video cards, it costs less for AMD to make said video card than nVidia. What we have is nVidia being FORCED to lower their MSRP and making less money to stay competitive while AMD is making the money they had expected to with these parts. Card for card, I believe AMD is making the same or more money off each card in the same price range as their nVidia counterpart. Likely more. I'm sure AMD factored in a healthy profit to each video card in arriving at the MSRP. How much? No one knows. Much like the cost of manufactoring nVidia (or AMD) cards, that is info we simply do not have.
 
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