November 12, 2008

Major New Technology Releases Buoy Market for Graphics Add-In Boards in Q3’08: Jon Peddie Research

Despite economic indicators trending sharply down, the market for graphics add-in boards (AIBs) held up reasonably well in Q3'08. Industry stakeholders saw a mixed bag, with units rising (sequentially) and revenue and ASPs suffering, though understandably so.

After completing analysis of last quarter's results for the graphics add-in board (AIB) market, Jon Peddie Research (JPR) reports an increase in AIB shipments tracking the growth in the overall hardware graphics market, which also includes motherboard-integrated products. Where overall shipments rose by 17.8% (sequentially), unit shipments for AIBs increased 11% to 21.9 million, elevated by major introductions of new graphics technologies and AIB products. The market duopoly of AMD and Nvidia was busy, with the two vendors ramping volume on their newest high-end Radeon HD and GeForce GTX cards, respectively.

  ====================================================================== Graphics add-in boards (AIBs)   Q2'07 Q3'07 Q4'07 Q1'08 Q2'08  Q3'08 ---------------------------------------------------------------------- Units (M)                        21.20 25.84 26.51 24.40  19.78  21.92 ---------------------------------------------------------------------- Sequential growth                 2.6% 21.9%  2.6% -8.0% -18.9%  10.8% ---------------------------------------------------------------------- Year-to-year growth               7.6% 19.1% 25.9% 18.1%  -6.7% -15.2% ====================================================================== 

Revenue takes a hit as more competitive environment suppresses ASPs

All things considered, the industry has to be somewhat heartened, albeit with several caveats. Tempering the relatively positive story for units in Q3 was a drop in average street prices (ASPs), a decline that JPR attributes in large part to a more competitive AMD intensifying the pressure on market leader Nvidia.

AMD has by all accounts exceeded expectations with its Radeon HD 4000 series. Priced aggressively yet delivering solid performance, AMD's new line not only took back some market share - jumping up to 40% from 35% the quarter prior - it forced Nvidia (and partners) to cut prices on its recently released GTX 200 series product. Discounts cut into ASPs, taking a toll on revenue for both Nvidia and the market overall, the latter down 27% (year-over-year) to $3.8 billion.

Pricing and Availability

The Q3'08 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 $6,000 including four quarterly issues, and single issues are available for $2,000.

About Jon Peddie Research

Dr. Jon Peddie has been active in the graphics and multimedia fields for more than 30 years. Jon Peddie Research is a technically oriented multimedia and graphics research and consulting firm. Based in Tiburon, California, JPR provides consulting, research, and other specialized services to technology companies, including graphics development, multimedia for professional applications and consumer electronics, high-end computing, and Internet-access product development. Jon Peddie's Market Watch and AIB report are quarterly reports focused on the market activity of PC graphics controllers for mobile and desktop computing.

EDITOR'S NOTE: Excerpts from Jon Peddie's AIB report are available on request.