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Nvidia's market share for standalone graphic chips tumbles

By - Source: Tom's Hardware US | B 0 comment

Chicago (IL) - For the first time in several years, Nvidia has shipped less standalone desktop graphic cards than its rival ATI, according to industry sources. The firm's market share reached 37 percent in the third quarter of this year, compared to 50 percent in the same period of 2003.

The figures were attributed to market research firm Mercury Research and come as a surprise, as Nvidia today announced higher than expected earnings for the most recent quarter ended October 24. Instead of total revenue for the third quarter of fiscal 2005 of $470 million to $502 million, the company now expects a range between $510 million to $515 million.

According to sources, the report estimates Nvidia's total market share for standalone graphics chips in Q3 of 2004 at 37 percent, down from 50 percent a year earlier. Rival ATI was able profit from this situation, increasing its share in this segment from 45 percent to now 59 percent.

The dramatic loss for Nvidia becomes even more apparent in the prestigious desktop standalone segment. This round of a brutal fight for market shares goes to ATI which was able to ship 55 percent of all standalone desktop graphic ships in the most recent quarter, up from 38 percent in 2003. Nvidia's share in this segment dropped from 58 percent to 42 percent in the same time frame.

The figures are in line with a trend of decreasing market shares of Nvidia. Market Research firm Jon Peddie Research listed a decline for the San Jose-based graphics chip manufacturer. In Q2 of 2002, Nvidia controlled about 39 percent of the total graphics chip market. This number declined to 23 percent in Q2 of 2004 with Intel gaining more dominance through its increasing integrated chipset shipments. According to Jon Peddie Research, Intel held almost 38 percent of the market in Q2, ATI posted about 23 percent.

Dean McCarron, principal analyst of Mercury Research, declined to comment on the most recent research data. However, it is obvious, that ATI has gained the lead over Nvidia in total graphics chip shipments worldwide. In terms of total chips shipped, it is unlikely that both companies have gained any ground on Intel.

Nvidia's stock was up $1.15 or 8.62 percent on Tuesday, resulting in a market capitalization of $2.4 billion. ATI was able to gain on the positive financial news from Nvidia 0.89 percent or $0.15, but posting a capitalization of $4.3 billion. Back in February, Nvidia's capitalization stood at $4.7 billion and ATI's value just above $5 billion.

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