The competition between ATI, graphics product group of Advanced Micro Devices, and Nvidia Corp. is truly fierce these days and no surprise that it affects both companies. According to recently released figures by Jon Peddie Research, market value of desktop discrete graphics cards dropped considerably in Q2, just like volume of sales, but average selling prices increased intangibly.

Average selling price (ASP) of a standalone graphics card for desktop computers was $182 during the second quarter of 2008, up 25% from $145.6 in Q1 2008, but down dramatically – 33% – from $273.29 in Q2 2007. The industry shipped 19.8 million add-in cards in Q2 2008, a decline of around 18.9% sequentially and 6% annually based on data from JPR market research firm.

From a revenue standpoint, the healthy rebound in ASPs fortunately offset the loss in units, leaving revenue at $3.6 billion, roughly flat from Q1 2008, but down whopping 37.4% from Q2 2007. In fact, the market value of add-in graphics cards for desktops was also abnormally low in Q1 2008 and was down 46% from the Q4 2008.

The third quarter of the year should be considerably more interesting than Q2, as during the quarter both ATI/AMD and Nvidia primarily compete against each other in performance-mainstream and high-end markets of graphics cards with ATI Radeon HD 4800 and Nvidia GeForce GTX 200-/9800-series that cost starting from $199 and up to $549. As a result of the competition in the higher-end segment the ASPs may continue to go up, however, unit sales volumes are uncertain.

Tags: ATI, AMD, Nvidia, Jon Peddie Research