Thursday, November 30, 2006
Nvidia Corp. is moving towards lower-margin integrated chipset for PCs and graphics chip for use in Apple Computer Inc.'s next-generation video iPod line, according to an analyst.
''We have talked about Nvidia replacing Broadcom for the next-generation Apple video iPod socket in July 2006,'' said Satya Chillara, an analyst with Pacific Growth Equities LLC.
Besides the iPod, Nvidia faces another hurdle. ''Based on our checks, we believe that Nvidia now has chipsets to attack the low end integrated Intel-based chipsets,'' Chillara said in a report.
''There are three reasons why we believe it might be premature for Nvidia to attack the low-end Intel-based chipsets,'' he said. ''"First, we believe Nvidia cost structure for these low end IC's is not as efficient as their AMD-based chipsets. Moreover, we estimate that Nvidia's high cost structure could persist for the next two quarters. Second, in our opinion, the gross margins in this space will be challenging and pose a risk to performance.''
The low-end, integrated Intel-based chipsets produced by ATI Technologies had gross margins of around 15 percent, he said.
By: DocMemory
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