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Declining to follow the price cut plan

DailyTech revealed last week ATI's new pricing strategy to compete with NVIDIA's GTS 250 rebrand, also known as the 9800 GTX+.

The ATI Radeon HD 4850 512MB was to drop to $129, while the Radeon HD 4870 512MB was scheduled to be cut to $149. This was supposed to be accomplished primarily through the use of mail-in rebates, which ATI would help offset.

Most of the board partners took up the offer on the 4850. However, due to several factors converging at once, the 4850 can now be picked up for around $120 at several e-tailers, albeit with the mail-in rebate.

The story with the 4870 is something else entirely. The Radeon HD 4870 512MB was supposed to drop to $149 with a mail-in rebate, but some of ATI's graphics card partners are resisting this as they feel that since the card outperforms the GTX 260, it should compete against that card. They instead are positioning the 1GB version of the 4850 against the 1GB version of the GTS 250 at the $149 price point.

One of our sources in Taiwan told us: "The ATI lineup is very strong, and we feel the 4850 should go against the GTS 250 and the 4870 against the GTX 260".

ATI has been very aggressive with its pricing, with lower prices and higher performance in the same segments as its nemesis NVIDIA. This has led to declining revenues for board manufacturers, already hard hit by lower demand due to the global recession.


 

 

GTX 280

ATI Radeon 4870

GTX 260 Core 216

ATI Radeon HD 4850

GTS 250

Stream Processors

240

800

216

800

128

Texture Address / Filtering

80 / 80

40

72/72

40

64 / 64

ROPs

32

16

28

16

16

Core Clock

602MHz

750MHz

576MHz

625MHz

738MHz

Memory Clock

1107MHz

900MHz GDDR5 (3600MHz eff)

999MHz

993MHz GDDR3 (1986MHz eff)

1100MHz

Memory Bus Width

512-bit

256-bit

448-bit

256-bit

256-bit

Frame Buffer

1GB

512MB

896MB

512MB

512MB

Transistor Count

1.4B

956M

1.4B

956M

754M

Price Point

$349

$149

$199

$129

$129



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GTX 260 price cut?
By Doormat on 3/11/2009 2:40:46 PM , Rating: 3
I saw over at another site today that the GTX260 got a price cut down to $169.




RE: GTX 260 price cut?
By Ananke on 3/11/2009 3:56:48 PM , Rating: 2
Nvidia GTX boards are more expensive to produce, since they have more memory tracks /512 and 496 vs 256 on ATI/ and the power circuit is more expensive also. So, board partners make lets say 30% on ATI 4870 and 15-10% on GTX260 now, when the retail price is equal.

On the other hand, when you have demand crisys like nowadays, you have to expand market share,m to offset falling profit margins and keep the nominal margins the same. So ATI marketing doesn't like 4870 being compared to equal GTX 260, they need share growth, i.e. 4870 retail HAS to be cheaper then GTX260, not taking into account the lack of CUDA and more heat with 4870.

Retailers number sales however are significantly down, so they don't care about quantity growth now, they care about percentage profit margin made on each sale. So, RETAILERS don't want new products or cheaper products to compete at present, they want maintaining or increasing current prices.
Status quo will brake at the very moment when new product is introduced, then retail prices will just fall of a cliff :)...in April.


RE: GTX 260 price cut?
By afkrotch on 3/11/2009 4:19:45 PM , Rating: 1
Seriously, what the hell is this post? It doesn't seem to make all that much sense to me.


RE: GTX 260 price cut?
By Ananke on 3/11/2009 9:11:45 PM , Rating: 2
What I said is that in several weeks Radeon 4870 will be 150 without rebates, as well as GTX 260. Retailers are clogged with inventory of these, and there will be the price war. Retailers are just skimming the sales now, but the situation will change soon.


"What would I do? I'd shut it down and give the money back to the shareholders." -- Michael Dell, after being asked what to do with Apple Computer in 1997














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