Sales of discrete graphics cards for desktop personal computers grew slightly sequentially in the second quarter of 2009, a recent study from Jon Peddie Research (JPR) has found. However, average selling prices (ASPs) dropped, as a consequence, market value declined both sequentially and annually. One positive thing about the market behavior is that unit sales stabilized and further drops are unlikely.
Jon Peddie Research reports that the market for graphics add-in boards (AIBs) demonstrated some much-needed firmness in Q2 2009 in terms of unit sales, adding more evidence that demand has bottomed and a recovery is in the offing. The quarter saw 16.81 million graphics cards shipped, up 3.0% sequentially and down 15% year-over-year (YoY), the latter figure presenting a substantially more moderate drop than the previous two quarters. Unfortunately, the market value dropped 4% to $2.598 billion sequentially and 28% annually.
The reason for the decline of graphics cards makers’ revenues is rather sharp drop of demand towards performance-class products and the increase in popularity of mainstream-class and value-class graphics boards. In Q2 both ATI, graphics business unit of Advanced Micro Devices, and Nvidia Corp. reduced pricing of their ATI Radeon HD 4870 and GeForce GTX 260 while introducing replacement products. The demand, however, followed the discounted products, which caused drops in revenues. Moreover, the segment of mainstream graphics boards got further boost with Radeon HD 4770/4850/4830 and a lot of customers decided to actually spend on those graphics boards, a very good sign.
Rather surprisingly, demand for enthusiast-oriented graphics cards was down only slightly and the professional segment even grew. It should be noted that sales of enthusiast, workstation and value graphics boards has been relatively stable since Q4 2008, which is generally logical: customers who can afford buying advanced graphics just continue to do so, whereas the low-end segment just hit the bottom and started to pick up slightly, according to the data by Jon Peddie Research.
Obviously, the sales drop of performance-mainstream graphics cards caused a decline in ASPs to $154 per card. The prices are still not as low as back in Q1 2008, when both performance and mainstream market segments were down.
JPR reports that attractive products across all market segments as well as aggressive pricing helped ATI to increase its market share from 31% in Q1 2009 to 35% in Q2 2009, while Nvidia’s share declined to 64%. This is especially notable amid stable demand towards graphics boards and, according to the data by JPR, was mostly caused by increased sales in enthusiast, mainstream and value segments. Sales of performance graphics cards dropped substantially for both ATI and Nvidia.
The Q2 2009 edition of Jon Peddie’s Market AIB Report is available now in both electronic and hard copy editions. The report provides an in-depth look at the PC graphics market and includes unit shipment and segment market share data, and trend analysis.
The annual subscription price for Jon Peddie’s AIB report is $6000 including four quarterly issues, and single issues are available for $2000.