ATI Will Slash Prices On X1000-Series GPU

[AthlonXP1800]

Market cap does not mean NV has that much money. NV Stocks are owned by stockholders not by NV. Look at NV's cash position and you will see that there is no way NV can buy ATI outright. Also if you look at revenue you will see the two companies are actually quite close financially (within a couple hundred million). Two years ago ATI had twice the market cap that NV did so all this wall street stuff in cyclical at best asuming ATI does not have the same RD problems/costs they did last year going forward.

That interesting, well lots of companies didnt acquired with cash, they acquired it with stocks because stocks are worth 90% more than their cash in hand. If you looked back in 2000 with Nvidia acquired 3dfx for $112m, they didnt bought it all with cash, they bought $70m cash and $42m of stocks. But here are something really very interesting with ATI, you see ATI had $102m in cash at beginning of 2000, they wanted to acquired ArtX for $400m but ATI didnt bought it with any of their cash, they instead swapped $400m ArtX stocks with ATI stocks. I think Nvidia will need shareholders' approval to swapping $3.9bn ATI stocks with Nvidia stocks. :)

[Mr_LoL]

Can someone with economics knowledge please confirm what athlon is saying is correct.

[Dazz]

You can get the X1800XT pretty damn cheap now. £217 for a X1800XL and £234 for an XT 256MB, £258 for the 512MB!! Crossfire card is still expensive @ £355.

[AthlonXP1800]

Can someone with economics knowledge please confirm what athlon is saying is correct.

What I said about how ATI acquired ArtX was correct, 6 years ago ATI wasnt worth $4bn, they were much smaller company with market capital near $1bn in 2000 than today, I found the source The Register confirmed (http://www.theregister.co.uk/2000/03/01/ati_confirms_400m_artx_takeover/) that ATI acquired ArtX for $400m in stocks, prior to acquisition of ArtX, ATI was 2 times bigger than ArtX.

Here is also one another example I can think of another big company acquire with stocks. I am sure you heard of Walt Disney announced the acquisition of Pixar for $7.4bn, wow that a hell lots of money but you are wonder whether do Disney have that kind of money in cash at the bank? Nope they dont have that money in the bank, they have only $1.723bn (http://money.cnn.com/quote/financials/financials.html?symb=DIS&sid=1618&report=3&period=quarter) in cash at the beginning of Q1 this year. So how did Disney acquired Pixar for $7.4bn? Disney are large company with a market capital of $54bn (http://money.cnn.com/quote/quote.html?symb=DIS) today, they acquired Pixar with Disney stocks (http://corporate.disney.go.com/news/corporate/2006/2006_0124_pixar.html).

[Richthofen]

well that's right. You don't need cash to buy a public offered company.

But there is no way Nvidia could buy ATI because of antitrust divisions or cartel office. An aquisition of ATI by Nvidia would mean a monopoly. Nvidia or ATI can get as big as they want but they won't get the permission to buy the other competitor as long as there is no big third player in sight.
From a financial perspective both won't go anywhere. They are almost equal from a size perspective and have nearly the same revenues. Nvidia does a littlebit better financially since 1,5 years but that's it.

[killahsin]

While i think that nvidia might not be allowed to aquire ATI due to anti-trust issues. I do think if they tried they would probably be allowed. I know it sounds rather wierd. But considering the type of markets they are in and their shares of the markets ati is not their only competitor. In fact their largest competitor is intel. So while as a user we see ATI vs Nvidia the suits and ties see it as nvida+ati vs intel.

[killahsin]

This is not the way the market works athlon. It would be nice if it did but there is a distinct difference between the overall worth of a company and the determined worth based on public stocks.



Again, it doesn't work like this.

Nvidia can't just lower prices for the heck of it to compete. They still have investors to appease and margins and profit numbers to hit.

Nvidia could lower prices and take a loss on every single chipset they sold over a 6 month period if they wished it to be so. Because their money isn't made from the chips we buy. It's made from the low end crapola readers here don't buy. To think that graphics cards can't take losses like consoles do, is to not understand the market. ATI nor nvidia makes much money from the high end. Their money is made on the low low low end. where as consoles money isn't made from consoles but from the liscensing fee's. Factoring in these issues helps you understand that if a pricewar were to happen, Nvidia could in fact outlast ATI. I highly doubt a real price war of the likes of consoles will ever happen on the graphics market though.

[OWA]

Does anyone know how well the x1900xt usually overclocks with stock cooling? If I get one, Im deffinitely OCing.
Mine overclocks well but I don't overclock it due to the noise (I can hear it even though I wear headphones). When overclocking, it spins up more often so I no longer do it. I've been waiting for the new Zalman to come out to hopefully remedy that situation. I've also thought about forcing the fan to max RPM and leaving it that way for gaming. I think it would be less annoying to have a constant whine than to have it spinning up and down a lot.

Anyway, I was able to hit the max overdrive settings. I get to around 95C or so under load which is starting to get in the red part of their temperature gauge so I'm not sure I'd want to go much higher. It does seem really stable at the max overdrive settings though so I bet it could go higher as long as the temp it's hitting is okay.

OGL games are still slower from the benches, perhaps owa or someone else can shed more light on whether it is a massive/noticeable difference.

It's hard for me to judge since I game so much with SLI. Whenever I give the XTX a shot, it always seems really slow until I switch to a single 7800 GTX 512 and see it's about the same. In general though, either card should be fine for most games as far as I can tell.

[Son Goku]

Can someone with economics knowledge please confirm what athlon is saying is correct.

On the surface, I wouldn't entirely expect someone with ecconomics knowledge to back Athlon up on this one... I certainly have no degree in ecconomics, though I have taken macro-ecconomics classes in the past, and some of what he suggests seems to fly in the face of, for instance supply and demand...

For instance, he suggested that because nVidia had a good year, they could just cut prices (oh they made profits, so they can lose now); however as Saz had rightly indicated, they have share holders... In fact, they have share holders who could file law suites (and sometimes stock holders have filed law suites when they weren't happy with a companies performance), against them. They expect a return on their investment.

There are other problems with some of his suggestions; but the setting of price isn't nearly as random as some might suggest. Supply and demand has a lot to do with it, as does their attempt to maximize profits. Prices that are too high, could result in a lot of inventory not selling, collecting in ware houses, and somehow they'd have to deal with a supply surpluss. This could include massive price cuts, a sale (to try to dump excess inventory), and/or cutting production substantially, until supply comes closer to the market's demand for that product. Warehousing goods, is also not free...

On the other hand, just lowering prices...consumer demand could go up. But if one doesn't have the production capacity to keep up, supply shortages, and the like... If they can't meet demand, that too can effect profits. In fact, this matter in itself is probably a big reason why when yields go up after a product has been in production for awhile, prices come down some. Better yields == better supply, which means more demand (as lower prices would tend to generate), could be met...

Finally, both production and R&D have their own associated costs, they're looking to recover. Sell it for too little, and one takes a loss per sale. Companies aren't going to lightly enter into that sort of arrangement...

I do find it odd, that good news about ATI slashing prices, becomes an argument for nVidia buying them out :D I'm wondering if next, nVidia's releasing a new card will be met with news about the FTC putting them under investigation for anti-trust practices... The logic doesn't seem to follow on this one, at least for me...

[Son Goku]

While i think that nvidia might not be allowed to aquire ATI due to anti-trust issues. I do think if they tried they would probably be allowed. I know it sounds rather wierd. But considering the type of markets they are in and their shares of the markets ati is not their only competitor. In fact their largest competitor is intel. So while as a user we see ATI vs Nvidia the suits and ties see it as nvida+ati vs intel.

For the after-market video card market, ATI would essentially be their only viable competitor. Though not the largest percentage of the market, Intel really doesn't hold weight in the high end, hard core gamers market, who wants the absolute best performance from their games...

Intel's competition, is more in the budget/OEM markets... Though these are the bread and butter, as far as sales go; it's not the segment that tends to drive the industry forward... Intel's competiton would be for OEM contracts, rather then for taking the performance crown away from the GeForce 7900 GTX...

[Mr_LoL]

Thanks son goku for your explanation.

[evilchris]

masermunch nos teh econmee. call mastermunhcer for economhy quesjuns

[CaptNKILL]

masermunch nos teh econmee. call mastermunhcer for economhy quesjuns
Man, whats with people dragging crap from other threads (usually from the PF) into totaly unrelated discussions? It seems to be happening an aweful lot lately...

Just because theres an opportunity to take a jab at someone doesnt mean you should do it. You just might be the only person who is even remotely amused by it, so keep it to yourself :p

[Richthofen]

But considering the type of markets they are in and their shares of the markets ati is not their only competitor. In fact their largest competitor is intel. So while as a user we see ATI vs Nvidia the suits and ties see it as nvida+ati vs intel.

Who cares about unit share? Intel is small considering IGP revenues.
Their graphics revenue is 10% of Nvidia's or ATIs current revenue at best.
Unit share numbers don't say anything. That's why i would'nt consider Intel as a big competitor at this stage.
Their unit market share is vastly over emphasised.