Professional graphics market stays hot, reports Jon Peddie Research
Story by Rys - Thursday 05th April 2007, 11:11:00 AM
Professional graphics market stays hot, reports Jon Peddie Research
TIBURON, Calif—March XX, 2007—Who would have guessed the professional graphics market would be the growth story it is today? Jon Peddie Research (JPR) has completed market analyses of both the workstation and professional graphics markets for the fourth quarter and full year ’06 and finds that the professional graphics hardware market remains surprisingly strong.
JPR reports that Q4’06 saw approximately 802 thousand graphics hardware units sold, with add-in boards accounting for nearly $285 million in revenue (street value). For the year, units were up 18.3% to 3.3 million and revenue up 17.9% to just over $1 billion. The burgeoning mobile workstation market is responsible for driving a good chunk of units, but add-in board sales remain robust as well. And most notably, it’s the pricy upper end of the market that’s bringing in more and more of the dollars.
No ASP appears to high ... Nvidia mining the upper end of the market with great success
Long gone are the heady days of SGI, Sun, DEC and IBM workstation graphics, expensive add-in boards with custom silicon that made ordinary consumer graphics look like child’s play. Today, it’s PC gaming – not workstation computing – that drives most graphics hardware innovation. But that hasn’t stopped vendors Nvidia and AMD (via its ATI acquisition) from harnessing all that innovation and redirecting it to a professional market still hungry for as much 3D horsepower as it can find.
Akin to hard-core gamers that must have the latest and greatest 3D cards with little regard for price, professional users have an insatiable appetite for every incremental bit of performance they can find, and they’re willing to pay dearly to get it. So much so, it seems suppliers have yet to set a price too high for the market to bear. Witness the $2,999 price tag of Nvidia’s recently announced Quadro FX 5600, already picked up by OEMs like HP.
Just 2 short years ago, JPR’s High (>$950) and Ultra-high (>$1500) market segments commanded about one quarter of all dollars spent on professional graphics hardware. By Q4’06, that share had grown to half. More buyers are forking out more dollars to get the latest from both of the big vendors, but Nvidia in particular.
Nvidia not only profits most from the surge in sales of higher price cards, but with its aggressive strategy of pushing more upscale product, it’s been largely responsible for creating that surge. Ironically, 3DLabs left the same market in early ’06 citing poor business conditions, but all that meant was more business for Nvidia to take. Impressively, JPR finds that just one of Nvidia’s high-end Quadro FX add-in board models took in about $93 million (street value) in Q4’06, about one third of the entire professional graphics add-in card market, and roughly four times the total revenue for #2 AMD’s entire professional business.
Workstations post strong gains as well
The workstation market continues to deliver surprisingly strong results to the market’s big players. Overall, the workstation market showed continued strength in Q4’06, with vendors shipping roughly 706 thousand workstations, accounting for almost $1.8 billion in revenue. For the year, units were up 22% to 2.5 million and revenue up 17.3% to $6.2 billion.
Dell still outships #2 workstation supplier HP, but the gap has narrowed. At 40% Dell’s share appears to be stabilizing, but HP is steadily gaining ground, now up to 30%. What was nearly 20 points of market lead over HP two years back is now down to just 10.
About the JPR Workstation Report
Now in its third year, JPR’s Workstation Report - Professional Computing Markets and Technologies has established itself as the essential reference guide for hardware and software vendors and suppliers serving the workstation and professional graphics markets.
Subscribers to the JPR Workstation Report receive two in-depth reports per year providing a comprehensive analysis of the vendors and technologies driving the workstation platform. Clients also receive four quarterly reports detailing and analyzing market results for each calendar quarter. For information about purchasing the JPR Workstation Report, please call 415/435-9368 or visit Jon Peddie Research at http://www.jonpeddie.com.
Based in Tiburon, California, JPR provides consulting, research, and other specialized services to technology companies, including graphics development, multimedia for professional applications and consumer electronics, high-end computing, and Internet-access product development
Company Contact:
Jon Peddie, Jon Peddie Research
415/435-9368
jon@jonpeddie.com
Agency Contact:
Pat Meier-Johnson, Pat Meier Associates PR
415/389-1700
EDITOR’S NOTE: Excerpts from the JPR Workstation Report and expert interviews are available on request
