Microsoft Vista failed to spur graphics board business

Several factors caused volumes of graphics add-in boards (AIBs) to slip in volume, but worse than that is that revenues and ASPs slumped by 66.9 per cent year on year.

Aside from Vista, the factors that JPR believed caused volumes to fall 7.4 per cent year to year in Q1 2007, with about 20.6 million units shipping, were people anticipating the intro of the AMD/ATI R600, Nvidia pushing out older cards to make room for the G80, and continued pressure from integrated graphics processors.

Said Jon Peddie, principal analyst at JPR: "We never expected a bump from Vista to be a big one. The advancements and encroachment of integrated graphics is a far bigger negative factor than Vista would ever be a positive one. We simply expected the appearance of Vista to make the AIB market healthier than it would be otherwise."

The other significant shift in AIBs during Q1 was from performance to mainstream and value segments. This move caused ASP and revenues to plummet, said JPR. Nvidia's business showed most of that big shift. After Nvidia introduced the G80 at the enthusiast level, it and its channel have slashed prices to get rid of elderly product. JPR said it had seen ASPs on G7X board drop from $10 to nearly $60. But this should be a short term shift and there may well be a rebound in Q2 or Q3. And if there isn't a rebound, then AMD's distribution is likely to follow suit. µ

L'INQ
Jon Peddie Research

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