Gigabyte warns investors of graphics card price drops

[Saracen]

..... And when a mate was the accountant for the company who makes them told me how much they cost I was livid

Well, context is king.

There's an old, and very true, saying ..... if you have to ask how much, you can't afford it. Aston rather fall into that category .... which was my point. Market forces rule.

[3dcandy]

Yeah we're about 10 miles from Gaydon, I now know quite a few who work there. Wasn't saying they aren't a poor company in any way but like you said it's not the same as it was. They had to change, and personally I feel the new cars are much much better fo it.
Back to the gfx cards... it's rather like Intel. They could innovate, they don't need to (for many reasons) but they annoy people greatly because they don't. To keep prices high for as long as they have, for whatever reason, is why the majority are annoyed. The analogy of the car is a bit different, anyone can see you've bought an Aston, most people can't really see you've bought a high end gfx card. Nobody can really see if you've overclocked your gfx card - same as modding the Aston (!) but people want what they see as value for their money.

Saracen - what did you think of the Aston range? I still like the V8 noise - probably more when pushed hard than the V12

[peterb]

All the rational people, parents and government bodies that have labelled them as predatory and as gambling?

All gamers with a moral compass that see those things for what they are, which is a quick cash grab.

The very same publishers and devs that are now listing the absence of these things being a positive feature ergo insinuating that they are a bad thing. I'd imagine there's a lot of people out there that think they should never have been a thing in the first place.

If people don’t like the price, they won’t buy the product and that will either force prices down, or stop production altogether. A fair price is one where the product sells in sufficient numbers, with a sufficient return on investment for the company and its owners (shareholders) who invest in the company.

TL:dr if if you don’t like the price, don’t buy it.

[Percy1983]

I would say its bigger than the selling for the most money.

I run my own business, I have a good amount of regular customers paying decent rates for my services. If somebody was to offer 3x the money but I could only work for them for the next 3 months on a one off basis I would have to decline, yes the short term gains would be great but the damage it would do to my existing customers and long term relationships wouldn't be worth it if I look past my nose.

Right now the GPU and RAM prices are endangering the high end/gaming PC market, which is effecting other components sales (ie I am still waiting for RAM to come down to something reasonable, so far I haven't bought an R7 1700 and now I am not buying an R7 2700, this of course means I am also not buying a new board and anything else I may decided to change/upgrade at the time.

The further knock on effect is when I do eventually upgrade it will be later/better kit which will then last longer which will push the next upgrade further away.

[mcnaugha]

If there's reduced demand and a supposed glut of stock, why am I finding the current gen cards I'm interested in are all out of stock. Their price has also jumped up around 15%, although this may be something the retailers do when a product is out of stock.

[mcnaugha]

Just had a thought about this... if there's a supposed 20% price drop coming... are the retailers doing a "Currys" and falsely inflating the price right before the 20% drop is due to kick-in?

[Saracen]

.... They had to change, and personally I feel the new cars are much much better for it.

....

Saracen - what did you think of the Aston range? I still like the V8 noise - probably more when pushed hard than the V12

On the first point, absolutely agreed, they did neec to change, and emphatically are better for it.

Re: the (unquoted) bit about the Aston being seen, personally, I don't give a hoot about that. I buy a car to, first, meet functional ewquirements, and second, be as much fun and comfort as I can manage.

What did I think? Longer answer.

TLTR version .... bleeping awesome.

Longer version - luxury, but in a driver's car. That said, not a boy racer car. Not cheap, eithrr to buy, run, service of insure but nothing in that class is. Much less hassle than Ferrari and, for me, more practical than Porsche.

V12 v V8?

Tricky. The V12 is very nice (VERY nice) but .... just now much power do you want? Just how much accekeration do you need?

At that level, posing at traffic lights is futile. You can blow away anything bar another supercar-class car, and getting into a "off the lights quickest" contest against anything might might match it is stupidly dangerous.

So, not only is it not a racer-wannabe car, but that's WHY I like them. Regardless of engine, they are very quick and have huge grunt where you (or me, anyway) which is that, when I overtake, I want to be out, paste and back in as quick as possible.

So V12 or V8? V8, I think. It's, well, quite enough. I think 500-ish bhp out to do, don't you? But either would do nicely. I'm just not terribly excited about the difference.

Ultimately, it's probably academic because, while in a whimsical moment I considered it, I just can't see me spending that, or anything near it, on a car these days. I wouldn't use it enough to justify it.

[3dcandy]

I didn't mean for you - but what I meant was that anybody can see the Aston. Nobody is really likely to see the card in your computer. It's not about bragging et al but you can admire that a person has worked for or achieved enough to get an Aston. You can't really see that money in the card

[chj]

I wish RAM manufacturers were as susceptible to public demand but I guess businesses can't afford to wait until prices are more reasonable so they can charge what they like.

[CAT-THE-FIFTH]

I wish RAM manufacturers were as susceptible to public demand but I guess businesses can't afford to wait until prices are more reasonable so they can charge what they like.

Well China is investigating them as the RAM price increases have been so massive its also affecting OEMs now.

[Saracen]

I didn't mean for you - but what I meant was that anybody can see the Aston. Nobody is really likely to see the card in your computer. It's not about bragging et al but you can admire that a person has worked for or achieved enough to get an Aston. You can't really see that money in the card

Yes, but whether anybody else can see it isn't part of my buying decision so, for me at least, doesn't sffect supply or demand. It might be a motivation for others, though to be honest, if someone is prepared to spend £170k on a car to be seen in it they either have far too much money, or no srlf-respect.

[Wolfclaw]

Good, buyers have been milked enough thanks to inflating prices to cash in on miners !

[Syphadeus]

If people don’t like the price, they won’t buy the product and that will either force prices down, or stop production altogether. A fair price is one where the product sells in sufficient numbers, with a sufficient return on investment for the company and its owners (shareholders) who invest in the company.

TL:dr if if you don’t like the price, don’t buy it.

I can't say I agree with your definition of a fair price if you're contextualising it against the recent GPU situation. Let's examine that.

Prices of GPUs soared in response to demand soaring and, subsequently, outstripping supply. Supply and demand. Makes sense. Part of the reason for the increased prices then is due to material costs increasing for the same reason, supply and demand. But we know also that part of the supply constraint was not caused by demand, it was caused by Nvidia artificially limiting production of chips to further constrain supply, increasing the per unit price. So are you saying that, given there were customers willing to pay that higher price (crypto miners being customers; their money being the same colour as anyone else's) that those prices were fair?

Now, there is backlog of stock which is not shifting at the rate these companies want it to and it certainly wasn't planned to have a backlog. Demand, therefore, has dropped. The prices have also dropped, but they have not dropped below what they were when these products first came to market over 2 years ago. Even though they've got loads they want to sell (so the demand is not there) the prices are not reliably dropping below MSRP. How is that fair if everything is market and demand driven? Even with higher component prices of today, it is costing Nvidia less per unit manufactured to make these 2 year old parts. 2 years is a very very long product life for this market. Normally by 2 years old we're at another generation and even if the chips are rebranded they'd be slotted into lower parts of a product portfolio and would therefore be cheaper.

Let's compare GPUs to another tech product that people upgrade regularly and is subject to an annual market cycle: mobile phones. I have a Galaxy S7 which was released in March 2016. If Apple had decided not to release a new iPhone the next year or the year after and Samsung then felt there was no need to bring a new product to market, would it be fair that the consumer pay the same or more for a Galaxy S7 today, over 2 years later, than at launch? Would you say that was fair price as a consumer or would you instead expect that since the tech is 2 years old it does not have the same value?

You see, what you're arguing makes financial sense if you're purely looking at it from a market perspective. But I'm only harping my point on because someone has tried to say that these practices aren't greedy. Reducing the argument to "well it's capitalism" doesn't make it not greedy and doesn't make this situation any fairer. What has happened has been very bad for PC hardware enthusiasts and gamers and it's a result of profiteering and greed, not good business.

[peterb]

I can't say I agree with your definition of a fair price if you're contextualising it against the recent GPU situation. Let's examine that.

Prices of GPUs soared in response to demand soaring and, subsequently, outstripping supply. Supply and demand. Makes sense. Part of the reason for the increased prices then is due to material costs increasing for the same reason, supply and demand. But we know also that part of the supply constraint was not caused by demand, it was caused by Nvidia artificially limiting production of chips to further constrain supply, increasing the per unit price. So are you saying that, given there were customers willing to pay that higher price (crypto miners being customers; their money being the same colour as anyone else's) that those prices were fair?

Now, there is backlog of stock which is not shifting at the rate these companies want it to and it certainly wasn't planned to have a backlog. Demand, therefore, has dropped. The prices have also dropped, but they have not dropped below what they were when these products first came to market over 2 years ago. Even though they've got loads they want to sell (so the demand is not there) the prices are not reliably dropping below MSRP. How is that fair if everything is market and demand driven? Even with higher component prices of today, it is costing Nvidia less per unit manufactured to make these 2 year old parts. 2 years is a very very long product life for this market. Normally by 2 years old we're at another generation and even if the chips are rebranded they'd be slotted into lower parts of a product portfolio and would therefore be cheaper.

Let's compare GPUs to another tech product that people upgrade regularly and is subject to an annual market cycle: mobile phones. I have a Galaxy S7 which was released in March 2016. If Apple had decided not to release a new iPhone the next year or the year after and Samsung then felt there was no need to bring a new product to market, would it be fair that the consumer pay the same or more for a Galaxy S7 today, over 2 years later, than at launch? Would you say that was fair price as a consumer or would you instead expect that since the tech is 2 years old it does not have the same value?

You see, what you're arguing makes financial sense if you're purely looking at it from a market perspective. But I'm only harping my point on because someone has tried to say that these practices aren't greedy. Reducing the argument to "well it's capitalism" doesn't make it not greedy and doesn't make this situation any fairer. What has happened has been very bad for PC hardware enthusiasts and gamers and it's a result of profiteering and greed, not good business.

I am saying that a fair price is one at which sales of the product are continuing to the manufacturers satisfaction. What that rate needs to be is a business decision, given that the company has a duty to its shareholders to maximise the return on there investment. If the backlog is reducing at a rate that is in keeping with the business plan, then the pricing is about right. If that rate it is too low, then prices may drop further.

Then there is the question of competition - either from another product line (it makes little sense to undercut another product so sales of that suffer) or another manufacturer - when it may be necessary to reduce prices to maintain market share.

The application for the card - whether it is by crypto miners, video editors, gamers or scientific modelling - is irrelevant - all compete pretty much on the same basis, although those buying many cards may get a quantity or trade discount - but that is the same for most commodities.

And your idea of a fair price may be different from mine. I have absolutely no need at all for a high end graphic card - so even if the price dropped to £50, or even lower, I still wouldn't buy one as I have no requirement. It has no value for me. but a fair price for an individual is one that you are prepared to pay for the features it gives you - and that depends on the urgency of need, and financial circumstances as these cards are - for most individuals - discretionary purchases.

With regard to the Phone analogy, the same considerations apply. Basically value of a product is what people are prepared to pay for it. If the rechnology is two years old, does the same job as it did when it was released and there is nothing 'better' (which is also subjective) then its 'value' is the same as it was when it was released. At least it is if people still buy it at that price.

[Spreadie]

So Nvidia are screaming at the board partners, "don't send them back, we'll give you a rebate".

[3dcandy]

Peterb - whilst your sentiment is correct it rarely works like that in practice. A 2 year old product, when in this day and age products *usually* have a yearly refresh would never be seen as being of a good value. Apple and most tech companies have admitted that they have to do yearly refreshes else sales drop considerably. So your argument doesn't really stack up at all. Also NV have tons of cards because they overstocked, they have admitted to 300,000 cards being returned and I hazard that is the low end of the figure ie. a creative low figure. As they also have had the highest margins for some time that is what annoys people. I'm sure they won't be burned as up at the high end AMD have no real direct competitor due to them banking on HBM2 and the problems and costs that entails. However...if the 10% cut doesn't stimulate the market, and it gets to 20% or even more - then the pressure on the price of the next generation increases so that the next product has to be both a lot faster (which is difficult to achieve these days) or a lot cheaper (which is not what NV want to do).

You say that if a phone does the same job when it's 2 years old.... can't remember that happening in a long time because phones are also driven by design not just tech. You've admitted you have no interest in high end graphics or even a £50 graphics card. Sir that's bottom end with these current high prices...I feel you're a tad out of touch