Units not so bad, but revenue took a big hit
TIBURON, CA—June 13, 2007—Perhaps the best that can be said for the add-in board market in Q1'07 is that things can't get much worse. Jon Peddie Research has completed tabulations and analysis of the first quarter, and while the numbers weren't good, the company reports much of the downturn should be temporary.
Graphics AIB vendors shipped approximately 20.6 million units in this last quarter, down about 2.2 % sequentially and 7.4% year-to-year. While the unit story may only be a tad disappointing, revenue went downhill in a far more dramatic fashion. ASPs and total dollars spent (street) were way down to around $3.5 billion, off 28.8% sequentially and a huge 46.1% year-to-year.
The long-term, big-picture trend that continues to pressure the AIB market is the encroachment of graphics processors integrated in chipsets (IGPs). IGPs have vaulted Intel to the top of the graphics heap, taking a big chunk of the market formerly owned by add-in boards housing discrete graphics processing units (GPUs).
But JPR found other negative factors in play in Q1 attributing to the substantial loss in revenue. For one, Nvidia and its partners appear to have been clearing the channel to make room for new products based on its flagship G80 GPU introduced at the high end last October. And for another, more than a few prospective customers for AMD products were holding off purchases in anticipation of the company's late-to-market R600 GPU, which finally appeared in May bearing the Radeon HD 2900 brand.
Fortunately, channel clearing and product turnover are short-term issues, so all is not doom and gloom for the add-in board market. With Nvidia's G80 poised to percolate down the vendor's product line, and with AMD's Radeon HD 2900 now shipping, the industry has good reason to expect the market to bounce back in the second quarter.