Analyst Issues Warning to NVIDIA

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There are people out there that think NVIDIA might be barking up the wrong tree with its recent attacks on Intel and at least one analyst thinks it could seriously backfire on the company.

But that could change. "If...Huang's recent tirades have an effect on Intel, that effect may well be the exact opposite of what Huang wants--a huge, rich, motivated design powerhouse applying itself to the one and only marketplace in which Nvidia has shown an ability to compete."
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I think things are the other way around: nVidia's recent smack talking is a result of Intel's move into the GPU space with Larrabee.

Between Larrabee and the threat of not getting a Nehalem license for their chipsets, nVidia is probably feeling a bit squeezed. My guess is that the CPU smack talk is twofold: convince gamers to invest extra budget in video cards and as a sort of pre-fight with regards to getting tighter with a 'weaker' processor company.

The GPU smack talk is easier: he wants to create market pressure for OEMs to promote discrete video units in their PCs.

I still hold to my belief: when the Nehalem dust settles, Intel will have SLI, nVidia will either have Nehalem based boards and some additional features to replace the role of SLI in their mobo strategy (perhaps a Physx accelerator/Hybrid SLI onboard chip?) or they will abandon Intel mobos altogether, to focus perhaps on AMD or Via.
 
"But there is another element that Huang seems to overlook--Intel has not, so far, been interested in the high-end 3D-gaming market, other than as a vehicle to sell their own high-end CPUs."

i740
 
nVidia is in a difficult position with its back against the wall. the reason amd and intel have platform strategy's that perform great and do not involve one nVidia product. this is disastrous for nVidia's profit margins! nVidia needs to play nice with intel/amd to survive. if you didn't notice it nV is competing with cpu companies that can live with out them. the only alternative for them is to place all their bets on via's new cpu and pray to god via does not screw them over.
 
Honestly, I think Nvidia's move was smart. Really smart. If you look at the average consumer, they were going to read the news and hear that they didn't need to spend money on a graphics card because the cpu was going to start taking that load. Which is 100% bullshit, but the average customer is an idiot. They were proactive about stoping Intel's overhype with Larrabee.
 
vengence said:
Honestly, I think Nvidia's move was smart. Really smart. If you look at the average consumer, they were going to read the news and hear that they didn't need to spend money on a graphics card because the cpu was going to start taking that load. Which is 100% bullshit, but the average customer is an idiot. They were proactive about stoping Intel's overhype with Larrabee.
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the backfire will be epic. i estimate nV will be dead in 5 - 10 years
 
maxius said:
the backfire will be epic. i estimate nV will be dead in 5 - 10 years
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Nvidia wont be dead in 5-10 years. They have enough of money that if this plan of theirs fails, they still can bring themselves out of it. I do believe however that coming out and challenging Intel was a mistake. I think its safe to say that if Intel is challenged, not only will they accept the challenge, they will put up one hell of a fight to win the challenge.
 
I don't think Intel will put up a challenge simply because they're making integrated graphics still and even years from now when their performance goes up by a factor of 10, it'll still be slower than TODAY'S mid-range cards...let alone the ones we'll have years from now.

Intel's trying to make low-end video cards that approach mid-range performance, so they still won't really compete with NVIDIA or ATI outside of the low-end range.

It's smart of NVIDIA to try to promote video cards and point out that integrated graphics will be very weak even a few years from now, but on the other hand, the vast majority of people will have low-end video cards, so that's where the big profits lie. Ideally, they could have been friends with Intel and work together on integrating good, cheap video cards in all motherboards so everyone buying a new PC would be able to play recent games. NVIDIA and all gamers would have profited from that.

I still hope AMD can do this since they can make both CPUs and GPUs.
 
Love-Man said:
"But there is another element that Huang seems to overlook--Intel has not, so far, been interested in the high-end 3D-gaming market, other than as a vehicle to sell their own high-end CPUs."

i740
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The i740 was not a high end part, and the 3D core in it was designed by Real3D (the 2D core came from C&T IIRC). I always thought the i740 was more of a strategic part to push AGP adoption. It worked, even though the i740 flopped with Intel practically giving them away near the end. :p
 
maxius said:
the backfire will be epic. i estimate nV will be dead in 5 - 10 years
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There will be no backfire. You act as if Intel can suddenly find some cash somewhere to fund this great crusade that is going to happen. Intel has already invested it's liquid capital into research on a low end integrated graphic soultion as well as it's main processor lines. It's not going to suddenly stop it's shareholder's dividend to pay for this. Even if they did, the total dividend was less than a billion dollars (Roughly 800M), which isn't nearly enough to finance a project to kill Nvidia in that time scale.
 
Big D. said:
I still hope AMD can do this since they can make both CPUs and GPUs.
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I am very excited. Today my new 780G motherboard comes in with matching AMD processor. I've got a brand new 3450 (cheap, too!) that I'm going to throw in for hybrid SLI. The 780G is an impressive chipset for its price/features and performance ratio. Right now nVidia and intel have nothing that competes integrated graphics wise. And AMD's hybrid platform is the solo pioneer available and tested to be stable right now. I'll report on how it works.
 
pxc said:
The i740 was not a high end part, and the 3D core in it was designed by Real3D (the 2D core came from C&T IIRC). I always thought the i740 was more of a strategic part to push AGP adoption. It worked, even though the i740 flopped with Intel practically giving them away near the end. :p
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I know all about the giveaway, I bought one for $40cdn. :)

I agree that it was not a high end part, but that was not due to a lack of trying on Intel's part. They tried to present a high end discrete graphics card, but found out they were way behind the curve once they released it. They tried to put together something after that that never surfaced and ultimately decided not to compete in the market. That's how I remember it, but it was a while ago. :)

I just don't like this guy's analysis of the situation. It will take more than intel throwing a money sack at this to take out Nvidia. History shows that it will be a huge undertaking for Intel to compete in this market. I just wanted to point out an obvious flaw he made in his analysis.
 
I don't know, this warning seems kind of unfounded. Intel would need to pour boatloads of cash into this market which is already pretty crowded, and they would need to do a lot to unseat either ATI or Nvidia. The fact is that Nvidia has the expertise in this area, and Intel is still going to be perfectly happy putting crappy, bare minimum graphics chips into computers.

It takes less to develop, they have no real competition, doesn't need as much driver development since people demand less of the hardware, and since most people don't know anything about computers, they will continue to pick Intel chips in their new machines due to the low price. As long as Intel's chips can run HD video, most people don't care or know the difference.

That said, I wouldn't mind even more competition in the high end graphics market, since that means better performance and lower prices for all. Of course, where we are right now is a very nice place where you can get a 9600 for dirt cheap. If people knew the difference, there is no reason they would go with intel- but the question is, how do you educate people about the difference? That's the tough part.
 
Ferrariman60 said:
It takes less to develop, they have no real competition, doesn't need as much driver development since people demand less of the hardware, and since most people don't know anything about computers, they will continue to pick Intel chips in their new machines due to the low price. As long as Intel's chips can run HD video, most people don't care or know the difference.

That said, I wouldn't mind even more competition in the high end graphics market, since that means better performance and lower prices for all. Of course, where we are right now is a very nice place where you can get a 9600 for dirt cheap. If people knew the difference, there is no reason they would go with intel- but the question is, how do you educate people about the difference? That's the tough part.
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Well most people pick Intel chips as that is really there only options. You go out to the store and look at Dell, HP, Gateway, and eMachine PC's and laptops and if those PC's are a Intel based processor, 95% if not more of those machines are also going to be a Intel Graphics Chipset as well. The manufacturers of these PC's will also need to start putting Nvidia and ATI cards into these PC's and not leave it up the consumer to do so. Most consumers don't care about games and have no need to put a video card into these computers. If the consumer cares about gaming, they probably are going to look at a Dell XPS system, build there own, or buy a PC from some PC specialty site just as Velocity Micro.
 
Love-Man said:
"But there is another element that Huang seems to overlook--Intel has not, so far, been interested in the high-end 3D-gaming market, other than as a vehicle to sell their own high-end CPUs."

i740
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The i740 was a great value 3D Part.. Played Descent Freespace VERY well.. But there was no followup..
 
Think of this..

If nVidia's PR machine can keep 2% of buyers from "splurging" on a high-end nahelem processor and get something lower ended, they stand to sell a MB/chipset for that processor. 2% would be nothing to sneeze at..

In the long run? Who Knows.. But if Intel does Stiff nVidia on Nahelem, then you are looking at one big anti-trust suite.
 
Love-Man said:
I know all about the giveaway, I bought one for $40cdn. :)
...
I just don't like this guy's analysis of the situation. It will take more than intel throwing a money sack at this to take out Nvidia. History shows that it will be a huge undertaking for Intel to compete in this market. I just wanted to point out an obvious flaw he made in his analysis.
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Yeah, high end graphics is not a given for Intel. The pace is much faster than Intel's CPU cycles and Intel has never shown complete competence in even low end graphics, where users are apparently not the least bit demanding.

The giveaway I was talking about wasn't for end-users. Intel was bundling the i740 chips almost/for free with PC chipsets near the end, leading the the glut that gave $40CDN video cards. :p
 
vengence said:
Honestly, I think Nvidia's move was smart. Really smart. If you look at the average consumer, they were going to read the news and hear that they didn't need to spend money on a graphics card because the cpu was going to start taking that load. Which is 100% bullshit, but the average customer is an idiot. They were proactive about stoping Intel's overhype with Larrabee.
Click to expand...

The average consumer doesn't need a mid or high end discreet video card nor do they read tech news. The average consumer doesn't know or have even heard of larrabee.
 
Some people put too much faith in Intel....that's a mighty big ship, and takes a mighty long time to change course.

Nv was smacktalking, I doubt Intel really cares...they have CPUs to sell, and serverboards/mobile chipsets to sell.

If there is a backlash it may be Intel just releasing some "backpressure" from a taco bell binge.
 
I think Nvidia was the small child who threw stones at the couple of pitbulls... not realizing that the electric fence isn't working.
 
Intel , like Nvidia have one job to do and that is make money. Intel will smack down Nvidia only if it can get a return on investment of the almost 3 billion in R and D that it would take just to catch up. There are better and faster ways to make money for Intel and rolling the dice with 3 billion is not one of them.
 
Each is doing what they do best and each will promote its approach out of necessity
 
Ockie said:
I think Nvidia was the small child who threw stones at the couple of pitbulls... not realizing that the electric fence isn't working.
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lol great analogy

Just go to Intel's website and watch the videos they have there....then go to nvidia and do the same

Current Assets - liquid assets that can be turned into cash in 12 months
Intel has 24 billion in current assets...
Nvidia has 2 billion in current assets ...

Cash - cash money
Intel has 10 billion that billion with a big ass B
Nvidia has 600 million

Total Stockholder Equity - how much the company is worth
Intel - 42 Billion
Nvidia - 2 Billion

who do you think is in a better position? :rolleyes:
 
I just thought of something....if Intel starts buying Nvidia stock they could own Nvidia by next week LOL
 
infamou5 said:
lol great analogy

Just go to Intel's website and watch the videos they have there....then go to nvidia and do the same

Current Assets - liquid assets that can be turned into cash in 12 months
Intel has 24 billion in current assets...
Nvidia has 2 billion in current assets ...

Cash - cash money
Intel has 10 billion that billion with a big ass B
Nvidia has 600 million

Total Stockholder Equity - how much the company is worth
Intel - 42 Billion
Nvidia - 2 Billion

who do you think is in a better position? :rolleyes:
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Where do you get your numbers?

finance.google.com has Intel as having 5.73B shares at a price of 23.58 each giving a Mkt Capital of 135B. The market cap of Nvidia is 12.5B (This is the price you would have to pay if you were giong to be able to buy out the company at the current price. More likely you'd have to pay a 25% preimium on this to get the shareholders to agree to the deal) They also list Intel as having a net change of cash at around -1.4B So where are they going to get the money to buy Nvidia when they're net income from ALL of 07' was reported at 7B. Get real...
 
vengence said:
Where do you get your numbers?

finance.google.com has Intel as having 5.73B shares at a price of 23.58 each giving a Mkt Capital of 135B. The market cap of Nvidia is 12.5B (This is the price you would have to pay if you were giong to be able to buy out the company at the current price. More likely you'd have to pay a 25% preimium on this to get the shareholders to agree to the deal) They also list Intel as having a net change of cash at around -1.4B So where are they going to get the money to buy Nvidia when they're net income from ALL of 07' was reported at 7B. Get real...
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get real? Do you know how to read a balance sheet and Income statement properly?

U can't just muliply the shares times the stock price to get the actual value....you have to deduct liabilites and many expenses(R&D,Tax,Operating Expenses etc..). I got this from Intel annual balance sheet on my Etrade account.

You might be looking at Quarterly Data for 08' im not sure....look at the annual data for 2007.

http://finance.yahoo.com/q/bs?s=INTC&annual

theres a link that shows Cash And Cash Equivalents for Intel(thats whats considered cash), you can also type NVDA and it will show you annual balance sheet data for Nvidia

Net income is how much money they got in 2007 after all the expenses...doesnt mean thats all they have. They had 8 billion in cash in 05 and 7 billion in cash in 06. 10 billion in 07.

Look for "Total Stockholder Equity" thats the value of the company. Not what you calculated on your windows calculator. lol
 
infamou5 said:
get real? Do you know how to read a balance sheet and Income statement properly?

U can't just muliply the shares times the stock price to get the actual value....you have to deduct liabilites and many expenses(R&D,Tax,Operating Expenses etc..). I got this from Intel annual balance sheet on my Etrade account.

You might be looking at Quarterly Data for 08' im not sure....look at the annual data for 2007.

http://finance.yahoo.com/q/bs?s=INTC&annual

theres a link that shows Cash And Cash Equivalents for Intel(thats whats considered cash), you can also type NVDA and it will show you annual balance sheet data for Nvidia

Net income is how much money they got in 2007 after all the expenses...doesnt mean thats all they have. They had 8 billion in cash in 05 and 7 billion in cash in 06. 10 billion in 07.

Look for "Total Stockholder Equity" thats the value of the company. Not what you calculated on your windows calculator. lol
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I'm sorry you don't understand. I'm not going to waste my time educating you. But you have to buy all the shares to purchase a company. This shouldn't be that hard of conecpt. :rolleyes:
 
vengence said:
I'm sorry you don't understand. I'm not going to waste my time educating you. But you have to buy all the shares to purchase a company. This shouldn't be that hard of conecpt. :rolleyes:
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I though we were talking about my numbers being incorrect but i guess you went way off topic and if you don't wna waste youre time why the hell do you keep replying to my posts? lol.

P.S.
You don't have to buy all the shares... you only need the majority of shares to really own the company, so you can vote yourself on the board of directors or as the chairman. Don't get mad at me because you were wrong, thats nothing to be ashamed of. If im wrong i'll admit to it and learn something from it. Looks like you still need to mature a little. or maybe a lot :D
 
Lazy_Moron said:
Nvidia wont be dead in 5-10 years. They have enough of money that if this plan of theirs fails, they still can bring themselves out of it. I do believe however that coming out and challenging Intel was a mistake. I think its safe to say that if Intel is challenged, not only will they accept the challenge, they will put up one hell of a fight to win the challenge.
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QFT. We've all seen what happened when AMD "challenged" Intel with Athlon 64. It took them a while, but now Intel is creaming AMD.

They can do the same to NVIDIA if they want to.
 
Intel has summarily failed at everything that exceeds its normal business model.

Discreet graphics is NOT their forte. Nvidia is being overly aggressive, but they smell blood. AMD and by proxy ATI is suffering and they see themselves becomming the worldwide graphics king for a generaion. They may well be correct.

Even my friends who work at Intel say the same thing, as well as those who have left to go work for Nvidia. And yes, a lot of contracted Intel employees have gone over to Nvidia in the last couple of years.

The jobs are going to Nvidia folks. That's where the talent wants to work. Not for Intel. Intel is going to have to prove that they really can do this. Their problem is that they trial balloon everything. And half-assing a video card division launch is going to make them look like a laughing stock.

If you want to play a betting game, you'd have better odds betting on ATI somehow defeating Nvidia in the next 5 years. And that's not very likely.
 
It's funny that people think this was some off the cuff emotional response from Nvidia. This was a well thought out move. To all the people who think Nvidia should just cower and let Intel tell the world how GPU's are worthless and CPU's are just as fast at rendering graphics. How the hell is that a better option than fighting back?
 
I think it's funnier that people are assuming that playground antics drive the business world. These are the same people that thought ATI and nVidia reps couldn't be in the same room during the 6800/x800 days.

The reality is that smack talk happens a lot in the corporate world: advertising is pretty much that. Intel isn't going to think that nVidia is being a meanie and all of a sudden decide to make Larrabee kick ass over it...Larrabee will perform as well as it will based solely on Intel's ability to deliver the goods, that's all.

Discrete component companies have to fight this battle eventually. Creative chose to punt on the sound front, and now they're hurting for it. nVidia is choosing to draw the battle lines, and say that a discrete component will always be better. This is a sensible thing for THEM to say, just like it's a sensible thing for Intel to say the CPU is king....although Larrabee seems to fly in the face of Intel's confidence in the CPU.

The reality is that in order to avoid being marginalized, nVidia and ATI need to constantly deliver current gen graphics in a way CPUs can't, and they need to heavily advertise that they do.
 
The Larrabee probably won't be a great product, but that's not why I care about it.
I think it's highly interesting if Intel enters the mainstream graphics market and starts selling a gaming graphics card. It will increase competition, which is the best thing that can happen to the consumer, since it will decrease prices and increase product development.
 
Definitely a bad move on Nvidia's part. You expect more of multi million dollar companies than what equates to a kindergardeners argument of mine is better than yours. The old saying still applies keep your friends close and your enemies closer. Intel could squash Nvidia in a heartbeat if they wanted to, there was no reason to in the past but unfortunately they have just given them a reason to.

In the near future this will be beneficial to the end user as the war will spur technology and competitive pricing but in the long run I fear Intel will squash Nvidia and if AMD can't keep up we are looking at a major monopoly here which will really hurt in the long run.
 
bluehaze013 said:
Definitely a bad move on Nvidia's part. You expect more of multi million dollar companies than what equates to a kindergardeners argument of mine is better than yours. The old saying still applies keep your friends close and your enemies closer. Intel could squash Nvidia in a heartbeat if they wanted to, there was no reason to in the past but unfortunately they have just given them a reason to.

In the near future this will be beneficial to the end user as the war will spur technology and competitive pricing but in the long run I fear Intel will squash Nvidia and if AMD can't keep up we are looking at a major monopoly here which will really hurt in the long run.
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Besides overall value of said companies, what evidence do you have to present to us that intel will "squash" NV, and show me how the statements that NV have made have anything to do with it, because I see no evidence. All I see is some shitbird analyst opening his mouth in a reactionary manor saying NV is fucked because intel is worth more, nothing in the actual market of where people buy things has actually changed an inch since said statements were made.
 
infamou5 said:
lol great analogy


Total Stockholder Equity - how much the company is worth

:
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One measure of how much a company is worth :p and a not so good one at that.

Your shareholder equity is just one measure of a company's worth, and not a widely used one. It's assets minus liabilities or paid in capital, plus retained earnings. A company may have negative shareholder equity yet still be "worth" a lot.

An extreme example here. Lets say you take out a large loan to finance a project that is expected to produce tremendous return. Your debt to equity ratio is now reversed. That doesn't make the company insolvent or worthless.

There are many ways to value a company. Shareholder equity is a good tool, but I wouldn't say it was the best way to value a company. The only way it really comes into effect is if the company dissolves and debts paid off and capital distributed to the shareholders.
 
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