Average Selling Prices on Graphics Cards Continue to Drop

From X-bit Labs: Sales of discrete graphics cards for desktop personal computers grew slightly sequentially in the second quarter of 2009, a recent study from Jon Peddie Research (JPR) has found. However, average selling prices (ASPs) dropped, as a consequence, market value declined both sequentially and annually. One positive thing about the market behavior is that unit sales stabilized and further drops are unlikely.

Jon Peddie Research reports that the market for graphics add-in boards (AIBs) demonstrated some much-needed firmness in Q2 2009 in terms of unit sales, adding more evidence that demand has bottomed and a recovery is in the offing. The quarter saw 16.81 million graphics cards shipped, up 3.0% sequentially and down 15% year-over-year (YoY), the latter figure presenting a substantially more moderate drop than the previous two quarters. Unfortunately, the market value dropped 4% to $2.598 billion sequentially and 28% annually.

The reason for the decline of graphics cards makers’ revenues is rather sharp drop of demand towards performance-class products and the increase in popularity of mainstream-class and value-class graphics boards. In Q2 both ATI, graphics business unit of Advanced Micro Devices, and Nvidia Corp. reduced pricing of their ATI Radeon HD 4870 and GeForce GTX 260 while introducing replacement products. The demand, however, followed the discounted products, which caused drops in revenues. Moreover, the segment of mainstream graphics boards got further boost with Radeon HD 4770/4850/4830 and a lot of customers decided to actually spend on those graphics boards, a very good sign.

View: Article @ Source Site