Last week we saw Nvidia showing off its next-generation flagship GPU the GTX 1080 and the GTX 1070. The Green Goblin told us shedloads things which if true would clean AMD’s clock in terms performance.
It threw AMD’s decision to focus on the mainstream desktop and notebook markets with upcoming GCN (Graphics CoreNext) 4.0 GPUs, codenamed Polaris 10 and 11 into question.
Normally GPU manufacturers release the flagship or ‘high-end’ products first to get all the attention and then release the mid-range chips for the great unwashed a lot later once they have sorted out yields.
But AMD’s cunning plan suggests that it is going to do the opposite. It is risky, but it could mean that the outfit could make more money quickly. This is because mainstream GPUs account for the majority of GPU sales.
Sure the high-end, flagship level graphics cards carry the largest profit margins, mainstream and performance segment GPUs account for the vast majority of total graphics card sales. But it is not going to sort out AMD’s market share and profit woes.
AMD’s discrete GPU sales increased by 6.69 per cent in Q4 of 2015, which coincides with its release of the performance-segment R9 380X graphics card. Meanwhile Nvidia’s desktop discrete GPU shipments were down by 7.56 per cent from when it released its mainstream GTX 950.
Sure this is small potatoes, but it means that AMD could take roughly 7 per cent of Nvidia’s sales in a single quarter, by releasing a graphics card in a price segment that Nvidia had nothing.
Now Nvidia is going to be focusing on the high-end first and will not release anything for the performance for the mid-range for ages. But AMD will have its Polaris there and ready. In fact it will be about six months ahead of Nvidia which is more than enough time to drain a bit of the Green Goblin’s market share.
Then when AMD releases its flagship graphics card based on the HBM2 powered Vega 10 GPU, possibly as early as October 2016, it will arrive with a spec which is better than the GTX 1080 and is meant to go toe-to-toe with a possible GTX 1080 Ti or Titan X successor.
The plan requires nerves of steel, particularly as AMD’s bottom line is absolute pants at the moment, but it does make sense. However it is not good news for consumers. AMD is deliberately avoiding competition with its plan and this means that it can afford to charge a bit more until Nvidia pulls finger. Good for AMD but means that prices will be higher because AMD does not have to undercut Nvidia.