The head of BFG Technologies, a well-known Nvidia-exclusive supplier of graphics cards, admitted in an interview that Intel Corp.’s highly anticipated code-named Larrabee graphics processing unit (GPU) would change the market of graphics processors, however, he still said that Nvidia would be able to remain on top.
“Next year we’re going to see a completely different competitive landscape and it will change how people buy graphics cards,” said Scott Herkelman, the president of BFG Technologies, said in an interview with Hexus web-site.
The emergence of two players – Advanced Micro Devices and Intel – who are able to supply complete platforms consisting of a central processing unit, a core-logic and a graphics processing unit will indisputably change the whole market as system integrators as well as consumers like to buy their products from a single supplier.
Since Nvidia does not develop x86 central processing units and the future of its chipset business is uncertain in the light of inability to get a license on Intel QuickPath Interconnect bus, the most crucial part of its competitive position is the GPU, which is where the company is particularly strong.
“A lot of companies have gone out of business trying to compete with NVIDIA on GPUs,” added Mr. Herkelman.
The head of BFG warned that the recent price wars that Nvidia started by cutting down the recommended price of the Nvidia GeForce 9800 GTX from $349 to $199 in a very short time-frame may cause troubles for Nvidia add-in-board partner. Graphics card suppliers, distributors and retailers have stocks of products and large price-drop may either cause money loses for them or would require compensation from Nvidia, which catalyzes money losses on their side. Still, Mr. Herkelman stressed that since there are different kinds of relationships between Nvidia and partners, the attitude of GPU developer may be substantially different to various companies.
“Each partner is in a unique position – it’s not clear cut how to react to price adjustments,” he said.