X-bit labs

Annual Hardware Overview: A Glance Back at the Year 2003 (page 13)

Category: Editorial

by Andy Yaschenko

[ 01/08/2004 | 11:51 PM ]

Graphics

ATI undoubtedly won the last year. Just look at the following graph that shows the company’s stock price throughout 2003:

A few comments seem necessary, though. It seems like NVIDIA inherited the karma of 3dfx, having consumed it in the end of 2000. It took just a year for the company to lose its first place in the computer graphics market to Intel and allow ATI Technologies to get very close (NVIDIA’s 25% against ATI’s 22%. Compare to 31% and 19%, respectively, in the beginning of the year). It would have seemed purely fantastic just a couple of years ago – ATI reached NVIDIA in sales volumes and outpaced it in profits!

NVIDIA ended the last quarter with a sales volume of $486 million and a profit of $6.4 million, while ATI with $469.7 million sales and $47.4 million profit. As for the big picture, IC Insights predicts NVIDIA to end the year with $1.835 billion sales (-4% compared to 2002), and ATI with $1.135 billion (+76%). To make the story complete, ATI only has to surpass NVIDIA in annual sales for 2004. Considering the dynamics of the last year, the Canadians can do it.

ATI has learned the secrets of making good graphics chips, of writing normal drivers and of doing business together with partners. For example, such giants as ASUS and Elitegroup joined ATI’s camp in 2003! The name of ASUS alone in the list of companies manufacturing graphics cards on ATI’s VPUs can bring success to ATI in 2004. It’s a meaning fact that ASUS used to produce cards on NVIDIA’s GPUs and couldn’t afford the luxury of getting into an affair with ATI. When there is no clear leader in the field, NVIDIA just cannot command its partners, so we are waiting for MSI to roll out RADEON-based cards under its trademark, too.

There is one more proof – the Gigabyte story. When the company started making graphics cards on ATI processors, NVIDIA refused to ship GeForces to them, but later changed the attitude and Gigabyte returned to making GeForce-based cards once again, without breaking apart with ATI, of course. Again, this would have been quite impossible, if the market situation hadn’t changed so dramatically.

Ah, yes! I can’t also pass by the fact that Microsoft chose ATI to supply graphics chips for the XBox 2, saying that they “selected ATI after reviewing the top graphics technologies in development and determining that ATI’s technical vision fits perfectly with the future direction of Xbox”. They only don’t say if it is it financial or technological direction? Anyway, a close relationship with the developer of DirectX never did any harm to a graphics company. As for the rumors that NVIDIA would develop and ship the graphics core for the PlayStation 3, they were soon discarded by people at Sony saying they could do it themselves all right.