Report: Nvidia to Broaden Its Integrated Chipsets
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Graphics chip maker Nvidia plans a major assault on the Intel-compatible integrated chipset market tomorrow, introducing a new motherboard chipset aimed at low-cost desktop PCs.
According to a Reuters report, the company, best known for its add-in graphics cards, will come out with a trio of motherboard chipsets designed to rival Intel's own G35 integrated chipset. The designs will compete for a greater share in the component market for PCs in the $400-$600 price range. Nvidia did not respond to a request for comment.
Nvidia entered the chipset market in 2001 with nForce, offering chipsets compatible with AMD processors -- a rather risky move at the time, as AMD was only a bit player in the space.
"A lot of people questioned why Nvidia went with AMD first for their chipsets, but if you look at Intel, Intel has a large portion of the chipset market for Intel motherboards," said Dean McCarron, president of PC component market researcher Mercury Research.
"If you look at what's left over [of the Intel-compatible integrated market] and compare it to [the AMD market], they are roughly the same size," he told InternetNews.com. Plus, by targeting the AMD market originally, Nvidia didn't have to go head-to-head with a giant company like Intel with a new product.
Within six years, McCarron said Nvidia captured 62 percent of the AMD-based motherboard market for integrated graphics. Yet it still has less than 1 percent of the Intel-based market, despite having introduced Intel-compatible chipsets during the past two years. AMD, which has since acquired Nvidia rival ATI, commands 23 percent of the overall market for desktops and laptops, so Nvidia is looking to grow beyond having 62 percent of 23 percent.
"The chances of growing the business when you are that far north of 50 percent is a lot harder," McCarron said. "So this is a chance for Nvidia to continue to expand their chipset presence."
That fact is in addition to the likelihood of market share erosion in the AMD-compatible space, thanks to greater competition from AMD's ATI unit. Until its acquisition by AMD in Oct. 2006, ATI marketed its own AMD-compatible chipsets; since then, it has done so under its parent company's brand.
While Nvidia is widely recognized as a dominant performer in the add-in graphics market, superior hardware performance alone won't decide the fate of its chipset business when it challenges Intel, said Nathan Brookwood, principle analyst for Insight64.
"If the performance is better it'll help a bit," he said. "But Intel also has these wonderful branding programs called Viiv and vPro and Centrino in the notebook market, and if you're an OEM and you don't use an Intel chipset, then you're walking away from much marketing bucks."
The Centrino brand has done wonders for helping Intel capture a large portion of the mobile market, even though Nvidia and ATI both had arguably better chipsets. As a result, Nvidia may find itself fighting the Intel branding machine -- a fight that companies like AMD have proven is a hard one.
"I suspect that while Viiv and vPro are not doing nearly as well from a branding standpoint as Centrino, nevertheless it represents a formidable obstacle for Nvidia to make progress in that segment," said Brookwood.