cM :: MORLEY|DIGITAL

Nearly a year and a half ago I wrote about the unique triple-core processor from AMD.  I felt, and still do, that it’s a great play by AMD to flank Intel’s dual-core and quad-core processors.  My focus in that article was the retail mentality of your average consumer.  Three is better than two.  That’s what a brick-and-mortar buyer will see.

And now that AMD has released its new 45nm Phenom II line-up, the press has responded much more favorably this round to AMD.  But what has received the most attention and acclaim have been the value X4 810 and the X3 parts.  Because of their low cost, overclockability, and excellent performance against Intel’s Core 2 lineup, AMD has once again found a way to position itself against its larger, cash-laden competitor.  And what may be considered AMD’s finest processor is the surprising Phenom II X3 720 Black Edition.

Recently I wrote about Intel’s Core i7.  It simply rocks.  But it simply doesn’t sell.  According to Q1 reports, the X58 chipset - the only chipset that can run the i7, will be 1.8% of its chipset sales.  Let’s give Intel some benefit of the doubt and assume that in the range of 50% of those chipset are mobile, where there is no i7, and the X58 would make up less than 4% of desktop chipset sales.  That’s well within the 5% enthusiast market I continue to talk about. (read these two posts, they’re important to understand my mindset here)

AMD knows this, and so does Intel.  The fight’s between Phenom II and Core 2 until Intel decides to drop an anvil and make Core i7 mainstream.  By all accounts that won’t be until Q4 of this year or Q1 of next year.  Intel’s best selling chipsets are those used by Core 2 processors.

Till then AMD has a very, very competitive product that combines high frequency, performance out-flanking dual-core processors, a great price, and even a bone thrown to the enthusiast with its overclockability.

Combined with AMD’s strong 780G and 790GX chipsets and fantastic Radeon HD 4000 series lineup, AMD finally has the right mix of product to make a stand in this market.  

One company I haven’t mentioned in this mix but should - NVIDIA.  Remember they make chipsets that are readily available, have design wins, and are extremly powerful for both AMD Phenom and Intel Core 2 processors.  They may be having a spat with Intel over Core i7 licensing, but for now it’s not going to hurt them in the pocket book.

[Disclosure:  I run a Core 2 Quad Q9550 in my main rig.  I currently have a GeForce GTX 280 and a Radeon HD 4870 X2 I play with.  I have two laptops with Intel chips and chipsets and one with an AMD processor with NVIDIA chipset.  My media center has an AMD processor with an AMD chipset.  I am a technologist that just loves tech and am brand-agnostic.  I think all these companies make great products that sometimes you just have to use in an manner fitting to their price and performance.  My opinions are my own and do not necessarily represent those of SolidWavePC or Fluid Digital.]

When chip developers, be it Intel, AMD, or NVIDIA, design new technology, they tend to stratify the product in a way that will appeal to various markets.

They do this several ways.  They can speed-bin the parts and cull the fastest performers and market them under a premium label, or they can go the other way and take lesser performing parts and market them to the mainstream.  Everyone, in fact, does both.  Either way they are able to get the most out of their research and development dollars pumped into the product while delivering value to the consumer.

Focusing on the graphics card market for a moment, take a look at AMD/ATI and NVIDIA’s products.  They feature various amounts of stream processors operating at varying frequencies.  These processors are paired up with different types of memory configured in varying capacities and bandwidth.

Now, there seems to be accusations (mostly by fanboys in forums - but also by snide remarks from tech press) levied against NVIDIA right now that they are somehow being dishonest in what is being called a “rebranding” of their G92 chip.  This chip formed the basis of the 8800GT and the 9800 series solutions.  It’s a powerful chip that delivers great performance.  It was derived from the G80 chip, the original 8800 GTX, which was the reigning speed king for 18 months.  Since then NVIDIA has been able to shrink the chip, increase clock speeds, reconfigure the types of memory it works with, and even remove stream processors to create products that are priced to meet market needs and compete with AMD/ATI.  The whole time making more peformance available to more people at better price points.

Now that NVIDIA has had a whole new architecture available to them for several months now, the GT200, NVIDIA needs to be able to do the same thing - stratify.  The 65nm GT200 is used in the GTX 260 and 280.  The 55nm GT200b are utilized in the GTX 285 and 295.  These are high end components that serve a small market niche and are large, power hungry, and expensive.  They’re also silly fast.  

One thing to keep in mind at this point is that the GT200 does not introduce any new feature sets.  Compared to the GeForce 9-series, it “merely” features more stream processors and memory bandwidth.  It’s not a DirectX 11 part.  It’s just pure muscle based on the same architecture dating back to the G80.  And that’s not a bad thing in the least.  AMD does the same thing.  The very successful Radeon HD 4800 series are built upon the same basic philosophy as the not-so-successful Radeon HD 2900.  They just tweaked it, shrunk it, dded stream processors, and repositioned it.

So NVIDIA has to make the choice on how to “fill down” their product stack.  Given their GTX 200 naming convention, the obvious choices would be something like the GTS 250 or the GTS 240, which is what the tech press is reporting.  Given that the current GTX 260 has 216 stream processors and the GTX 285 has 240, how would you design the value parts that NVIDIA needs to compete in the mainstream if you were in their product group?

Well, let’s start by subtracting stream processors and some memory bandwidth.  128 stream processors is pretty hefty, wouldn’t you think?  I mean, that’s as many as the recently released HP Firebird has.  And that machine is getting a lot of attention!  And let’s chop that memory bandwidth up - boy those 512-bit traces make for an expensive PCB.  Let’s go 256-bit.  OK…next step.  Do we take our large, expensive GT 200 chip and disable stream processors or…wait a moment, don’t we have a chip that already meets this feature set?

Yeah, it’s the G92.  Which, btw, will get a nice performance boost as well.

It’s good for the consumers.  They now have a product lineup that will make sense from top to bottom, both pricing and performance.  There is nothing nefarious about what NVIDIA is doing.  They are pricing and positioning these new products against their GT200-based bretheren.  And the G92 nips at the heals of the GTX 260, so it’s a smart chip to start with.  Consumers win.

It’s good for the channel.  This economy sucks.  But we still need to move new product.  These parts are new.  They make it easier for us to talk to the customer about value vs performance.  Boutiques, system builders, retailers, e-tailers, and distys win.

It’s good for NVIDIA and their shareholders.  NVIDIA is able to continue to make money on a product that they originally designed over 2 years ago.  Their architecture has legs and as long as they can continue to deliver value to the customer and bring in profits, it will only help them be a stronger company.  And that’s a good thing for everyone because:

It’s good for competition.  Do you think that AMD stands idly by and lets NVIDIA make these movements in a vacuum?  No, they change their pricing and products accordingly.  Who knows, maybe it’ll spark a new mid-range GPU throwdown.  

And who doesn’t like a good cage fight?

One of these systems from an acclaimed boutique builder claims to be “expertly engineered” and features “meticulous hand assembly” with every cable “thoughtfully secured out of the way” - can you tell the difference from the cheaper Tier 1s?  Boutiques should stick to what they know best - high dollar niche gaming PCs that truly deliver on their promises.

The greatest press release “days of glory” in the PC biz were when Brian Burke and Derek Perez of 3DFX and NVIDIA used to duke it out, in the mud, like a couple of drunk fools (I say that with great admiration, guys, please don’t take offense.)  It was seriously like attending a UFC match when those two turned up the heat.  I learned a lot just from reading their press releases and how they responded to the gaming community.

Stuff’s calmed down a bit since then.  We’ve all grown a little older as the industry has indeed grown older, and regrettably, more serious.  I’ve come to realize over the past year that we all do take ourselves way too seriously.  For some people, it’s the economy, for others, it’s the fact that this business now has billion dollar behemoths like HP and Dell in the fray and they are getting scared.

But dammit, the boutique PC biz is still a no-holds-barred market segment where you live on your wits and your last review.

So when Overdrive PC states that “No one else in the industry–and I mean no one–can match [us],” I have to call bullshit.  A quick look at their configurator for their high end machine, the all-new BigBlock.GTR reveals a very normal configuration of an Intel quad-core processor on an NVIDIA 790i motherboard. 

OK, nothing earth-shattering there.  Their “HyperClocking” technology allows for 3.8GHz+ on a QX9650 or 3.9GHz+ with the more expensive QX9770.

Newsflash, guys, MAINGEAR’s been building and shipping 4GHz quad-core Intel rigs since November of last year.  And we’ll do it on a QX9650, which saves you money.  Oh, btw, the Ephex also comes in three completely different flavors: a 790i platform, Intel X48, or even Skulltrail.  That’s right, two, four, or eight cores at 4GHz.

Now, why doesn’t MAINGEAR offer CrossFire on the 790i like Overdrive or HP?  It’s not an engineering feat - it’s merely a driver.  That’s right - AMD only needs to supply you with a custom driver to make CrossFire work.  We’ve got it.

But there’s a problem, or at least a problem that we see.  To us, it’s just a gimmicky configuration and we’d rather sell the best, not just what makes our supply chain happy.  First off, it’s slower than running CrossFire on an Intel chipset with native support vs the 790i with software support.  Secondly, the custom OEM driver updates are much slower than what AMD officially supports for the consumer at large (official AMD drivers don’t have this support, so don’t try to update your drivers yourself!)  And thirdly, and this is the kicker - at any time, NVIDIA can decide with a driver update to kill support for CrossFire at the chipset level.  Ouch.  We just don’t need the headache, and neither do our customers.

So there you have it.  Press releases aren’t written in a vacuum, they get read, and when there’s BS, someone’s going to call you on it.

I’ve witnessed a very comical phenomena in the system building business in the past several months.  Two companies have come up with the ultimate spin as to why they have not joined the rest of us in the year 2008 when it came to their system configurations.  One spoke very eloquently as to why they were not introducing a new chipset that would allow compatibility with the latest and greatest processor (or was it why they weren’t releasing the latest and greatest processor period?), and the other, well, just randomly talked in a circle about how not innovating was actually innovating.

What was interesting to me and those in the know was the motives behind these public announcements and the real problems they were trying to cover up.  Normally I’d just chuckle and move on, but what bugged me was the subtle and not so subtle inference that those of us who in fact were able to bring these new products to market were somehow doing a disservice to our customers, as if we did not properly qualify the components.  Without offering any specific assertion that new components had critical issues that would have delivered an unacceptable customer experience, these companies rather insinuated that sitting on their hands was actually doing their customers a favor.

Of course, I had to wait until today when they, like all of us, were falling all over themselves to launch the latest NVIDIA graphics solutions before I decided to post this.  Because I knew it would underscore my point. 

You see, our business thrives on being first to market.  Typically a boutique is given very early access to bleeding edge hardware.  We are quick to react, and are great brand holders for companies like NVIDIA, AMD, and Intel.  We are able to qualify, tweak, and productize a component faster than your typical Tier 1 for various reasons.

Some of the delays large companies face in being first to market have nothing at all to do with their postured position regarding “careful R&D,” etc, but rather the normal bureaucracy that the entire industry faces. 

Since one of my companies is direct with Microsoft, I am very intimate with what all it takes to do business with Microsoft on a direct level.  There’s WHQL certification of systems, making sure your models are on your DTOS (Desktop Operating System agreement), creating new images and recovery media for deployment of systems, and registering said images with an Authorized Replicator.  Sheesh, it’s time consuming!  And not one part of that has to do with stability testing, thermals, etc!

Then there’s the creative team that has to create marketing collateral around a product launch.  Pictures, press releases, and web development.  That takes time too!

Then, and here’s the key:  SUPPLY CHAIN.  This is key because it can really stick a company in more ways than one.  First, if you’re deploying your systems into retail, you need a lot of parts quick, and that can be a hassle for a hot new video card or CPU.  Secondly, since you’re playing a price game on margin - you’re ordering quantity to get the best price and that can be a gamble when it comes to an unknown product’s performance and market acceptance.  The larger the company, the more complex this step is.  For smaller boutiques, it’s easy to get 10, 20, or even 30 hot-off-the-press parts for launch, and sometimes that’s all you need if they’re an Extreme Edition CPU or $649 video card.  And believe me, companies HATE missing launch dates, because you’re sure to get a call from your IHV as to why you’re not selling their product but you still expect that quarterly MDF check!

So what happens if supply chain screws up, and you bought too many of the previous generation’s video cards or motherboards…yuck.  And that hot new 45nm CPU?  Yeah, it doesn’t work on that motherboard you bought a metric ton of.  Or those video cards?  Eek, they shrunk ‘em, tweaked ‘em, chopped the price, and released a new model.  And those mobos you bought for retail?  Yeah, underpowered and boring, and the model didn’t sell well, ACK! 

So what do you do?  Well, it seems like the only logical thing is to tell the public that you’re protecting their interests by continuing to sell the old and busted, and all those guys selling the new hotness are really just mavericks preying on your ignorance!

Well, in the words of Al Pacino in Glengarry Glen Ross, “Your excuses are your own!”