AMD Slashes Radeon Prices To Compete With Nvidia

by Trefis Team
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Earlier in July 2012, AMD (NYSE:AMD) reduced the prices of its Radeon HD 7900 video controllers. Last week, the company extended the price cut to its Radeon HD 7800 graphic cards to compete against rival Nvidia’s (NASDAQ:NVDA) recently launched GeForce GTX 660 Ti GPU. For both the Radeon HD 7870 and HD 7850, the price cuts have been in excess of 10% with the former offering a greater percentage discount. The Radeon HD 7870 is now available for $249 while the Radeon HD 7850 is available for $209. [1] Nvidia’s new GeForce GTX 660 Ti GPU, powered by its revolutionary Kepler architecture, is priced at $299. [2]

AMD and Nvidia have been competing head-on for a long time with either one winning the title of the world’s most powerful video card in the world. Nvidia’s GeForce GTX 68o has so far claimed to be the fastest single graphic card in the world; however, according to AnandTech, the recently launched Radeon HD 7970 by AMD is fast enough to tie up with Nvidia’s GPU. (Read: AMD Takes On Nvidia With The World’s Fastest GPU)

Though Nvidia still commands a higher share in the GPU market, we think that both the companies are well-positioned to leverage the growth in high performance GPUs, and thus believe that the neck-to-neck competition between the two will make any significant share gain by either unsustainable in the long run.

An improving economy, the introduction of games with higher performance requirements, and the increasing usage of high-definition video and graphics will fuel growth of high performance GPUs. We believe that the growth potential will offer immense opportunities for both the companies to retain their respective market shares throughout our forecast period.

Currently, we estimate AMD to account for 37% of the discrete notebook graphics processors market. We estimate the company to register a slight increase in its market share this year on account of growth in lower-priced notebooks in emerging markets, but expect the same to remain at a constant level thereon for the rest of our review period.

Our price estimate of $5.71 for AMD is at a premium of above 40% to the current market price.

See our complete analysis for AMD

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www.trefis.com/articles/117492/amd-adopts-hps-networking-solution-server-technologies/2012-05-02
Notes:
  1. AMD Reduces Prices Od Radeon HD 7800 Graphics Cards, Softpedia, August 21, 2012 []
  2. Nvidia Unveils New Weapon Of Choice For Gamers — The Nvidia GEForce GTX 6600 Ti GPU, August 16, 2012 []
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  • commented 2 years ago
  • tags: AMD TXN INTC NVDA
  • Murray is right.
    AMD Logo
  • commented 2 years ago
  • tags: AMD TXN INTC NVDA
  • Spoken like a true Intel confidant, Murray
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  • commented 2 years ago
  • tags: AMD TXN INTC NVDA
  • Ttrefis has been in love with AMD for a few years and has been consistantly wrong. Trefis uses AMD's press releases predict ions to base it's, so called, analysis. In the latest article by Trefis the writer talks about AMD cutting prices to compete with NIVIDIA.. This is a monumental lack of business brains. NIVIDIA has been consistantly profitable. REAL PROFITS NOT THE PROFITS BY AMD USE OF CREATIVE ACCOUNTING. AMD cannot afford to cut it's profit margins. It's evidentaly a desparate measure tp keep market share, at the expense of being profitable.AMD is a sick, mismanaged company !