While NVIDIA Corporation has lost the overall market share to ATI Technologies and Intel Corporation, the company has managed to increase its presence in the high-end market segment in the Q3 2004, which is the most lucrative part of the whole graphics cards market.

NVIDIA Brings the ‘Top’ Back

“Our objective in the quarter was to take back the high-end of the desktop PC market,” stated Dan Vivoli, executive vice president of marketing at NVIDIA.

According to a leading market analyst firm Mercury Research, NVIDIA managed to ship approximately 1.5 million of high-end DirectX 9.0 visual processing units during the third quarter of the year, which is 64% of the whole high-end market during the quarter. ATI Technologies, in contrast, supplied around 800 thousand of high-end DirectX 9.0 high-end graphics processors, which is 36% of the market. A quarter earlier NVIDIA’s share was only 26%.

NVIDIA attributes its triumph in the high-end market to the success of the GeForce 6800-series graphics processing units announced in the second quarter of the year. The grown market share may also be attributed to wider availability of NVIDIA’s GeForce 6800-lineup compared to that of the RADEON X800-series.

“Through the GeForce 6's stunning performance and an unmatched DirectX 9 feature set, we have been able to not only win a majority of the benchmarks, but also 100% of the Shader Model 3.0 market. Now that we've solidified our position in the high-end, we are poised to continue driving the GeForce 6 Series deeper into the market,” Mr. Vivoli added.

Among 63.8 million of mainstream and value DirectX 9.0 GPUs market share commanded by NVIDIA was also slightly higher compared to ATI’s: 51% versus 49%.

ATI Grabs the Top Spot on the Graphics Chips Market

According to Mercury Research, Intel Corp.’s market share in the graphics systems market rose 1% to 39% in the Q3 2004. ATI Technologies’ market share skyrocketed 4% to 27% in the Q3 2004, while its arch-rival’s – NVIDIA Corp.’s – share dropped 8% to 15% from 23% in the third quarter of the year. Intel supplies chipsets that contain integrated graphics cores for mobile and desktop computers, while ATI and NVIDIA concentrate on standalone graphics chips for desktops and laptops.

For the first time for a long time Markham, Ontario-based ATI Technologies managed to leave NVIDIA behind in terms of market share in desktop standalone market segment. Currently ATI commands 55% of the market, up 17% from the previous quarter. NVIDIA supplied 42% of graphics chips for desktops during the Q3 2004, down 16% from the previous quarter.

ATI Technologies also took the lead over NVIDIA in the market of standalone graphics components, which includes both mobile and desktop graphics processing units. The firm supplied 59% of all graphics chips, while Santa Clara, California-based NVIDIA commanded 37% of the market, down 13% from the Q2 2004.

The success of ATI Technologies can be attributed to more affordable RADEON 9800-, RADEON 9600 and RADEON 9200-series graphics cards hitting the market. While NVIDIA’s current GeForce 6-series GPUs offer customers blistering performance and feature-set and is more than just competitive to ATI’s RADEON X-series, the company’s previous generation product family GeForce FX, which generates the majority of revenue for the GPU designer, cannot offer enough performance in a number of modern games, unlike ATI’s 9800- and 9600-series products. With games like FarCry, Doom III and Half-Life 2 available today or shipping this year, both graphics chip designers managed to increase their revenues as a result of higher consumer activity.