At least when it comes to graphics AMD knows what it’s doing. Nvidia had years of the easy life in a professional workstation market until now. Out of the blue, ATI has launched a new FireGL that is faster than any of Nvidia's Quadro cards. This was the most unexpected event of 2007.
Nvidia currently enjoys 45 percent + margins and it earns a lot of money on its Quadro graphics cards. At the same time, it earns just a bit on ultra low-end priced products such as G86 based 8500, 8400 and 8300; but when you add high and low margins you still end up at 45 percent+, which is a great profit margin. PNY QuadroFX 5600, GeForce 8800 GTX, 1.5GB GDDR3, 2x DVI, PCIe top Nvidia’s offerings and sell for €2600, and PNY QuadroFX 5500 SDI, GeForce 7900 GTX, 1024MB DDR2, 2x DVI, PCIe for an astronomical €6,050 (and this is not a mistake, it is six thousand and fifty Euros). This is how much these cards can cost.
All of a sudden, ATI has the fastest card for 3D professionals and after years of being the underdog it has come back with a bite to take over some of this ultra profitable market. ATI did capitulate in the high-end gaming market, but that is only temporary.
ATI FireGL V8650, 2048MB GDDR4 should start selling for about €1,800 which means it is less than Nvidia's card and should provide a faster card, as well. For ATI, it means the mountain top is well within reach for this ultra profitable market, and this will certainly hurt Nvidia’s margins. This is not something that the investors will take lightly or tolerate for long.