Back in the days Nvidia Corp. has managed to leave behind its rivals 3dfx and ATI Technologies significantly because unlike its competitors it worked with virtually all manufacturers of graphics boards by selling them graphics chips. Life goes on and recently Nvidia initiated selling graphics cards under its own brand in Best Buy stores in the U.S., following the example of 3dfx and ATI.
After acquiring 3dfx back in 2000 the company started to change its attitude to the market and decided to choose its partners itself instead of supplying its graphics processors to all interested parties. This ensured high quality of products as well as Nvidia’s ability to dictate terms of purchase in particular and gain influence on the market of graphics cards in general. Such business practices allowed larger makers of graphics cards to become even bigger, whereas smaller makers were either forced out of the market or had to become Nvidia’s exclusive partners that are obliged to closely follow any of the company’s guidelines. Based on the fact that Nvidia has been using this business model both form consumer and professional graphics cards for about ten years not, the company has been pretty satisfied thus far.
However, in a surprising move the company has started to sell its own “designed and built by Nvidia” graphics cards in Best Buy stores in the U.S., according to a report from Hard|OCP web-site. The company confirmed on Tuesday that it decided to sell specific models under its own trademark in the Best Buy chain in the U.S.
“Nvidia and Best Buy are working together to offer PC customers the opportunity to experience firsthand the latest in PC technologies right inside Best Buy stores. As part of this broad initiative, Nvidia is supplying to Best Buy specific GeForce models built and supported by Nvidia. These products will only be available at Best Buy and will complement GeForce products from our partners. We will provide more details on this next week,” an official statement by the company reads.
Nvidia’s decision to try the same business model as 3dfx and ATI seems to be very strange, given cut-throat competition on the market of graphics cards as well as the fact that Best Buy is hardly a place where the vast majority of customers are getting their graphics cards. Moreover, competition with its own exclusive partners means that those companies no longer have to be loyal with Nvidia and try their luck with competing ATI Radeon graphics chips from Advanced Micro Devices.
In the recent year Nvidia lost loyalty of XFX company, which now supplies both ATI Radeon and Nvidia GeForce graphics cards and that does not carry any newer Fermi-based models. Moreover, the Santa Clara, California-based designer of graphic processor lost another important partner, BFG Technologies, which became bankrupt. Perhaps, Nvidia now needs to compensate the lower amount of add-in-board partners with its own-brand products?
Considering the fact that Nvidia does not own production facilities to produce graphics boards in large quantities, the company outsources production to Foxconn Electronics into China and call center support to India.