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Research firm finds ATI is losing ground, perhaps as a result of AMD's acquisition. Hang on tight for a flood of numbers

Jon Peddie Research, a consulting firm for graphics and multimedia has shared its findings for graphics shipments and supplier market share for the third calendar quarter of 2006. The firm estimates that approximately 76 million PC graphics devices shipped from major suppliers in Q3 2006, a 5.2% increase from the prior quarter and an 11.2% increase over the same period the previous year.

 

The desktop graphics segment saw shipments increased 2% from Q2’06 to Q3’06 and shipments grew 4.7% year-over-year. Integrated desktop shipments dropped 3% sequentially (the second consecutive quarter of decline) but increased 3.3% annually. Discrete desktop shipments jumped 10.2% on a quarterly basis and grew 6.8% year-over-year.

 

The mobile graphics segment saw quarterly shipments rise a dramatic 13.8% and grow 30.2% year-over year. IGC (integrated graphics controller) shipments drove growth in the mobile market in the second quarter with a stunning 15.8% growth during the period, and discrete mobile shipments grew 7.5% during the quarter and jumped 9.3% compared to the same period the previous year.

 

JPR estimates that a record 22.7 million mobile graphics devices shipped in Q3’06, 17.4 million of which were integrated chipsets for notebooks. Mobile IGCs claimed a share of 76.8% in the mobile graphics market, up from 75.4% in the prior quarter and up from 72.3% in the same period a year ago. Intel led the mobile graphics market with a 51% share (down from 54%), ATI dropped to a 24% share, and Nvidia jumped with an 8% market share gain to 19% for the quarter.

 

In the discrete mobile segment, ATI saw shipments decline dramatically on a quarterly basis while Nvidia saw shipments increase sequentially. Nvidia grew discrete mobile segment share from 37% in Q1’06 to 53% in Q3’06. ATI’s segment share fell from 63% in Q2’06 to 47% in Q3’06.

 

JPR estimates that approximately 53 million desktop graphics devices shipped in Q3’06, 31.7 million or 59.5% of which were integrated parts. Overall, Intel held at 35% of the desktop graphics market, ATI dropped to 22%, and Nvidia grew to 25% market share. Nvidia also grew to 57% share and ATI claimed 43% share during the period in the discrete desktop segment.

 

Intel saw a flat quarter in graphics shipments in Q3’06, but was still the largest supplier of PC graphics devices worldwide. ATI remained the second largest supplier in Q3’06 but with a 5% sequential decline in shipments and decreased market share. Nvidia, the third largest supplier in Q3’06, closed the gap with ATI with a 2.0% sequential increase in shipments and increased market share.

 

In case all those numbers have your head spinning, the table below summarizes ranking and relative market share.

 

Rank

Graphics Supplier

Q2'06 Market Share

Q3'06 Market Share

1

Intel

40%

40%

2

ATI Technologies

28%

23%

3

NVIDIA

20%

22%

4

VIA Technologies

8%

10%

5

Silicon Integrated Systems (SiS)

4%

5%

6

Others

>1%

>1%



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Consoles and HDTVs
By Iridium130m on 12/7/2006 11:50:13 AM , Rating: 3
What about the console market? I would think that with the Wii and the 360, that is the one market that they have vastly expanded their coverage.

Also need to consider the tv market as well. Many hdtv's utilize ATI graphics chips as well. I don't think this paint a full picture of how large ATI truely is.




RE: Consoles and HDTVs
By Le Québécois on 12/7/2006 11:59:41 AM , Rating: 3
I don't think those numbers are included. But they (the Xbox360 and the Wii) couldn't affect them anyways because:

1- ATI only designed the GPU of the Xbox360 but Microsoft is the one producing it and it's out of ATI's hands now.

2- The Wii just was released so it wouldn't be include into Q2-Q3 numbers anyways.


RE: Consoles and HDTVs
By decapitator666 on 12/7/2006 12:09:20 PM , Rating: 3
ad 1 but they will still get a licence fee for each chip microsoft will make and use in the xbox360. That they get no money for tht seems highly unlikely


RE: Consoles and HDTVs
By Le Québécois on 12/7/2006 12:17:45 PM , Rating: 3
I don't think they make any money from it anymore because if I remember correctly that's license and production fees that got Microsoft and Nvidia in court and the reason why after that Microsoft decided to go with ATI and produce the GPU themself.

I could be wrong. But that's how I understand the whole situation.


RE: Consoles and HDTVs
By Ralph The Magician on 12/7/2006 12:27:52 PM , Rating: 2
No, they don't. Microsoft bought out all the rights to the chip design. ATI gets nothing.


RE: Consoles and HDTVs
By bloc on 12/7/2006 4:19:55 PM , Rating: 2
Financial terms of the new deal were not disclosed, but Rick Bergman, senior vice president of marketing for ATI, confirmed that the contract includes a royalty arrangement that will protect ATI from the type of inventory problems that hampered Nvidia.

http://news.com.com/ATI+wins+bid+for+next+Xbox/210...

So yes ATi will get royalties for each xbox sale.


RE: Consoles and HDTVs
By radzer0 on 12/7/2006 12:13:12 PM , Rating: 1
Its still a ATI chip that is out there. Even is AMD doesnt make any money (which i doubt) its still market share.


RE: Consoles and HDTVs
By Le Québécois on 12/7/2006 12:30:13 PM , Rating: 2
If you're talking about the GPU of the Xbox360, you're wrong. At least if what I read in the Anandtech article that was made one year ago. Here's a quote from it:

quote:
Designed by ATI, Microsoft controls the IP of the GPU; meaning, Microsoft can manufacture and do what it wishes with Xenos (although we're assuming that they can't stick it on graphics cards and start selling it to the public).


And the link the page itself:

http://www.anandtech.com/showdoc.aspx?i=2610&p=8


RE: Consoles and HDTVs
By Crusader on 12/7/2006 2:10:30 PM , Rating: 2
quote:
Its still a ATI chip that is out there. Even is AMD doesnt make any money (which i doubt) its still market share.


You are right.

The sale to Microsoft counts as one sale. Not 7 million... Microsoft actually sold those.

Dell with ATI GPUs are sourced through ATI. MS sources the Xenos to their consoles.
Xenos IP was a 1-time sale, MS owns it now.


Like you said.
By Le Québécois on 12/7/2006 11:52:14 AM , Rating: 2
It's probably a result of AMD's acquisition of ATI. People may be scared by the fact that AMD may stop support or lower performance on an Intel based system with an ATI video card.

That fact alone could be the reason because the Q2 and Q3 of 2006 didn't see any major new products or news(talking about the video market here) other than the AMD aquisition of ATI.





RE: Like you said.
By retrospooty on 12/7/2006 12:01:14 PM , Rating: 2
"It's probably a result of AMD's acquisition of ATI"

I dont think so, I think it was just product mix and price point. I didnt buy ATI that quarter, While the highest end ATI cards were faster, they were rediculously priced. At the mid range, I think Nvidia's cards were just better bang for the buck.


RE: Like you said.
By Le Québécois on 12/7/2006 12:21:08 PM , Rating: 2
That's why I said could. It was just speculation.


RE: Like you said.
By klingon on 12/7/06, Rating: -1
Natural flux
By yacoub on 12/7/2006 12:04:55 PM , Rating: 2
Part of this is what happens when your product runs hotter and louder than the competition and your bloated software updates tend to be despised universally by fans and haters alike. =

That said, it's the natural ebb and flow of the product cycle, much as with Intel and AMD - AMD is characteristically behind by 6-12 months, but when they come out with their next gen product, it tends to outperform the competitor's product significantly enough that they regain strong marketshare - and at least with the past two product releases (A64 and X2) even more marketshare than they lose when the next Intel product comes out that's superior.

Again, natural flux of the market and product lifecycles. Lose some now, gain some later, lose, gain, etc. What matters is if the gain or loss is greater than the usual flux.

Currently Intel and NVidia have the products to own. Not too long ago it was AMD and ATi. Eventually, barring any unforeseen problems, the cycle will come back around.




hrm...
By radzer0 on 12/7/2006 12:11:42 PM , Rating: 2
ATI and AMD are both changing stuff around. Theres a few things that down the road will give a real big boost.

The fact amd is working on a integrated GFX cpu. Also the wii is going make a big diffrence for total devices. Specialy if the numbers keep going the way they are, which i could see happening as more people get wii's and tell there friends and people play it.

A big advantage the wii has on selling more is lower income people can afford it.

With AMD and ATI merging there changing stuff. Combining operations, etc. AMD has shown major growth in the past year and it will carry over to ati once amd talks to dell and a few other companys about doing combined deals with discounting.




mmm
By TimberJon on 12/7/2006 1:35:40 PM , Rating: 2
I want pie..




Basic operations?
By iNGEN on 12/7/2006 2:12:50 PM , Rating: 2
Has anyone considered that the small but measurable gains and losses quanitified above may simply be the result of good or bad performance on the part of the marketing and sales divisions of these respective companies?

I do not question the competitiveness of the products themselves. Just remember, that people sell products.




Bad products are to blame....
By defter on 12/7/2006 5:18:20 PM , Rating: 2
Most dramatic change happened in discrete mobile market and it was fully expected. Just look at performance/Watt of NVidia's G7x and ATI's R5xx. For example R580 is slightly faster than G71, but consumes almost 50% more power: http://www.xbitlabs.com/articles/video/display/pow...
Thus NVidia gained market share in discrete mobile market simply by having superior products, I don't think that AMD's acquisition has anything to do with it.

Thos who started talking about console sales should look at the article:
"Jon Peddie Research, a consulting firm for graphics and multimedia has shared its findings for graphics shipments and supplier market share for the third calendar quarter of 2006. The firm estimates that approximately 76 million PC graphics devices "

Consoles aren't "PC graphics devices", thus their sales are irrelevant here.




typo
By lplatypus on 12/7/2006 5:56:43 PM , Rating: 2
quote:
>1%
should be <1%.




lol...
By ChugokuOtaku on 12/7/06, Rating: -1
Oh yeah
By hubajube on 12/7/06, Rating: -1
RE: Oh yeah
By darkpaw on 12/7/2006 12:02:08 PM , Rating: 2
ATI's losses do likely have everything to do with being bought by AMD, but there isn't anything bad about AMD.

Companies tend to like buying items they know will have a long term support path, and they doubt that will continue to be the case with ATI products for Intel.

The whole reason AMD bought ATI was so they could offer packaged solutions. ATI could continue to offer just as many products for Intel, but with that support in question integrators/mfgs will buy from another source for Intel products.

The gain from this purchase will come when some of those AMD/ATI combined products actually hit the market, but that is going to take a while.


RE: Oh yeah
By decapitator666 on 12/7/2006 12:11:26 PM , Rating: 2
My memory might be bad but isn't John Peddie research doning a lot of contract reserch for intel?


"If you look at the last five years, if you look at what major innovations have occurred in computing technology, every single one of them came from AMD. Not a single innovation came from Intel." -- AMD CEO Hector Ruiz in 2007











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