I was pleased to see that a major three-letter market
research firm has caught up with us and now agrees that the PC industry
will probably have a nice 12% to 14% year-to-year growth in 2004. Pretty
good, right? Yes, but only if the GPU and VPU suppliers don’t screw
it up. Right now those xPU guys are doing just about everything wrong.
They’re taking pot shots at each other over one technical detail or
another, some qualification or another, benchmarks, and about the only
thing they aren’t doing is criticizing each other’s wardrobe, not that
any of them are snappy dressers.
But most of all they can’t ship their lovelies. Every
day we get calls from users, websites, AIB builders and investors asking
us what we’ve heard about availability. And almost every day I ask the
xPU guys, who give me the happy-face answer, “Boy, demand is great.”
We hear some AIB suppliers won’t be affected by the tight supply because
they have sufficient inventories of xPU chips stored at their plants
in Taiwan and China. I doubt that—no one stores inventory in this
JIT business. Look at the heat Intel took from Wall Street when they
let their inventory ratio get too high and had to start dumping. happy
face happy face happy face. So, since we can’t ship, and don’t want
to talk about that, let’s throw some more spit balls at each other.
It’s got to get better, real soon. We’re heavy into the
retailer loading schedules, and if we want this to be a happy holiday
season there better be a bunch of AIBs on the dealers’ shelves and available
from the websites. Oh, but wait, what will they use them for? Right
now it’s “Far Cry” and “Doom3.” Yes, yes, I heard,
Valve is going to ship “Half-Life 2” (or is it 3 now?) in
November—of course, they didn’t specify the year . . .
So we may have to revise our rosy forecast if the game
developers and the xPU suppliers don’t get their acts together. But
not to worry about your 401k plan or stock options, because the big
market research firms won’t learn about it until they actually go into
a store, and by then you can cash out.
The consoles, however, are gearing up, and a bunch of
new titles are coming out from the three suppliers plus some interesting
third-party stuff if the Tokyo Game Show is to be believed. I sure didn’t
see much at ECTS that gave me any titillation.
And while the big xPU guys are busy break-dancing in each
other’s faces, the little guys like S3 and XGI are out making deals.
I think we’re going to see a very surprising fourth quarter this year
with regard to market share. Intel is running a little late with their
new IGP, while getting rid of the older IGCs, and hoping PCIe takes
off like their program managers forecasted. AMD, Transmeta and VIA couldn’t
be happier about Intel’s difficulties, and are shipping everything they
So overall it looks like it’s going to be a great year.
Demand is strong, and this time the second-tier folks will have a bigger
opportunity as the heavyweights like ATI, Intel and Nvidia struggle
to live up to their promises.