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Current Strategy of ATI

The key areas, where ATI Technologies has put a lot of strategic efforts to in the last few years are the following:

  • Create strong brand recognition;
  • Provide original equipment manufacturers (OEMs) a complete lineup of up-to-date GPUs on time;
  • Provide OEMs cost-effective stable chipsets;
  • Create a foundation for entertainment digital platforms;
  • Ensure compatibility with milestone standards and technologies;
  • Expand DTV business;
  • Expand handheld business;

Let us try to think whether ATI has truly succeeded in achieving the goals:

  • ATI’s brand-name is truly strong today, however, Nvidia’s GeForce 7 trademark and hype effect of the GeForce 7800-series success, boosted by bold statements by the company and its supporters continue to chase ATI.
  • ATI has succeeded in winning a lot of OEM contracts with its Radeon X1000 series. However, the weakness of the Radeon X1600 family in performance mainstream against the GeForce 6800 GS and the GeForce 7600 GT has pushed ATI to offer cut-down version of the Radeon X1800 to successfully compete in the $199 - $249 segment, primarily in the channel market.
  • Loads of system builders utilize ATI’s chipsets and the company’s market share is even higher compared to Nvidia’s. At the same time, the firm introduced enthusiast-class CrossFire Xpress 3200 in March, but failed to launch a high-performance I/O controller on time.
  • ATI has succeeded in spreading its technologies across the industry: Microsoft Xbox 360 comes with ATI’s GPU utilizing unified shader architecture, future desktop GPUs from ATI will use similar architecture and additionally Nokia handsets may get graphics chips sharing similar architectural concept. Basically, ATI has created a foundation for entertainment platforms: Nokia handheld devices, Microsoft Xbox 360 game console, personal computers. Nvidia also has similar kind of technology portfolio, but they PlayStation 3 chip is a GeForce 7 derivative, desktop graphics chip code-named G80 will have “hybrid” architecture and current-generation GoForce products feature own “programmable shading engine”.
  • ATI has introduced PCI Express support at the right time and is going to have full DirectX 10-compatible chip by the time the application programming interface for Windows Vista is released. But ATI’s delayed support for Shader Model 3.0 and multi-GPU technology – amid Nvidia’s heavy SM3.0 and SLI advertising – had negative effect on ATI’s desktop business performance, even though both technologies are not needed in the mainstream market even now, two years after the introduction.
  • Handheld and DTV businesses continued to succeed in achieving new design wins.

The key operating goal of the company was to:

  • Ensure that technologies ATI develops can be used across all markets it serves. Generally, ATI could achieve it: graphics chips acquired technologies from Xilleon, while game consoles and handhelds are getting technologies from the PC space.

While ATI has been executing itself fairly well, it has not become an indisputable leader across all the markets it serves. Obviously, AMD is not an indisputable leader on the CPU market either. The chances that both ATI and AMD will be pressured by Intel on their respective markets are there and in this case collaboration of resources might help the merged company.

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