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From this week's TechWatch

How important are discrete graphics to most consumers?

Aren’t IGPs really good enough?

As a result of the FUD war kicked up by Intel, people are asking about the value and importance of an AIB. “I know if I did a quick poll of friends and family,” said one wag, “very few would care or even know whether they had a graphics chip in their PCs though most would know they have Intel inside.”

As we have discussed elsewhere in this issue, IGPs are not a threat to performance graphics. However, there are some additional points that are worth mentioning. Look at this:

The market for gaming GPUs is the Enthusiast segment, and about 10% to 15% of the performance segment. The numbers are in millions of dollars worldwide.

It peaks in Q4 as the channel stocks up for the holiday rush. So doesn’t this look like a big market for Nvidia and AMD?

And mind you, this is just the chips, the add-in boards are three to four times as much, plus the PC itself and the games, discrete graphics get to quite a large and, therefore, an important market.

Well sure you say, yeah it’s important to AMD and Nvidia but how important is it to most consumers who need a notebook for home or their business? Isn’t that why Intel has been successful with its integrated graphics? At their analyst’s meeting, it sounded like Nvidia was saying Intel’s IGP is horrendous because it can’t run all the games. But Intel isn’t necessarily trying to do that.

Yes but. Intel cares deeply about gaming, that’s why they named their graphics “extreme.” That’s why they claim dx10’ness as far back as two years ago. That’s why they position their graphics for gaming and video.

First off, let’s assume all those people buying the PCs and the aftermarket AIBs aren’t rich, and won’t waste their hard-earned money on something that doesn’t have value.

Like every other consumer segment, gamers have a spectrum of income. We used to think gaming was the high end but looking at the data from the Steam game distribution site, most gamers are not high-end customers and don’t go to a LAN parties. There are rich gamers and poor gamers and a bunch in between.

Second, the OEMs are shifting their silicon budget dollars to the GPU over the CPU—fact. Now why would they do that if IGPs with their "good enough" delivery were, in fact, good enough?

Third, we, iSupply, Mercury Research, IDC, Gartner, and of course Nvidia and ATI/AMD know (and I have lots-o-data on this) that probably 30% and maybe as high as 50% of the IGPs that get shipped don’t get used. Why not? Because they are almost free (~$5 delta—and you DO get what you pay for in a PC), and they happen to come in the chipset.

Forth, consumers have shifted their usage model on PCs to entertainment, and a GPU does a better job at delivering movies, from basic DVD to Blu-ray, than any IGP/CPU could ever do.

If you’re going to buy a $500 or less laptop, and all you want to do is surf the web, look at crappy small flash videos from You Tube and Utube, and maybe write some email, than an IGP is fine. If you want to do anything that has good to great video quality associated with it, like a full-screen HD movie, a high-quality game, video editing, Photoshop, drawing/paint, or page layout, you won’t be very happy with an IGP.

As I’m sure you know, there are always what we call corner cases—the exceptions—and you (or Intel or AMD/IGP) can find examples of the mentioned applications that will run just fine with an IGP, but that’s like saying I can drive my Pinto over the mountains and cross country just as well as you can in your fancy Lexus. True—but which experience would you prefer?

It’s not hype, a hundred million users aren’t wrong.