Here’s Why AMD Can’t Harm NVIDIA

When it comes to the GPU market, NVIDIA (NVDA) and AMD (AMD) are the two foremost players in the industry. AMD was in the red in the previous year, but the company has performed very well this year. This is mainly due to the launch of its new Polaris architecture and its pricing strategy. Although NVIDIA holds a major portion in the segment, AMD’s pricing strategy may help it gain back some market share.

While many investors may see this as a negative for NVIDIA, the company can still continue outperforming the market as it is a diversified company.
Apart from the GPU segment, the company is aggressively focusing on the automotive segment, and AR & VR market. The company’s powerful GPUs allow it to deliver some of the best gaming graphics in the business, but its chips are used in infotainment as well as navigation systems.

As a matter of fact, BMW has been using infotainment systems powered by NVIDIA for years, and presently uses its chips for all of its vehicles that roll off its assembly line inside variations of its iDrive infotainment system. Not only this, but NVIDIA has also partnered with Tesla. Tesla comprises of the biggest touchscreen displays that are also powered by NVIDIA. Furthermore, Tesla’s all-digital 12.3 inch instrument cluster display also uses NVIDIA’s GPUs. Hence, the company’s presence in other segments will help it offset any potential loss of market share it faces in the GPU business.

Fighting the competition

It is well known to everyone that NVIDIA has already launched its three new graphics cards based on Pascal architecture. But now, the company is on its way to introduce GTX 1060, GTX 1070, and GTX 1080 for notebooks at the Gamescom event soon. Surprisingly, these mobile-oriented Pascal grounded graphics cards will essentially have equal performance to their desktop oriented versions.

At present stage, the virtual reality segment accounts for one of the segments that has huge growth prospect. VR-ready computers require high-end cards such as NVIDIA’s latest GeForce GTX 1080. And it is highly likely that these new cards could increase the average selling price of the company’s GeForce cards and could generate more revenue. The growth of VR and AR market should see NVIDIA benefit from it considerably.

Conclusion

After years of struggling, AMD has finally managed to improve at the cost of NVIDIA. Although NVIDIA may lose some market share to AMD, the company is still on the right track. Its diversified business model will help it offset any losses and perform better in the long run.
Published on Aug 5, 2016
By Yaggyaseni Mittra

Copyrighted 2016. Content published with author's permission.

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