NVIDIA’s reported results for its 2nd quarter, 2015 fiscal period exceeded management and analyst expectations. Based on NVIDIA’s results, the consumer market for PC Gaming hardware looks strong. The results also include a report of substantially larger sales of NVIDIA’s Tegra SoC platform into the automotive market.
The company also guided higher for likely sales for the 3rd quarter of 2015 and pointed to consumer GPUs as its most popular product line. There was no indication of any margin erosion in the near future. Jen-Hsung Huang spoke to very deep strength and health in the global PC Gaming market and likely increases in average sales prices (ASPs).
If one can extrapolate from these results to broader markets, perhaps the global consumer PC market has more depth than would otherwise appear to be the case. These game consumers are an entirely separate segment from business users who, one might argue, have been driving up sales to renovate older sets of Windows XP desktop computers. The NVIDIA results also included mention of the Chromebook PC as one platform likely to experience substantial growth. So-called “Wintel” OEMs (HP, Dell, Lenovo) all have entries to the global Chromebook market. It may make sense to increase expectations for sales volumes for these companies.
A hot PC gaming market may indicate increased consumer appetite for XBOX One and Playstation 4. This assumption looks reasonable given remarks by Jen-Hsun Huang during the earnings conference. He pointed to the release of a number of games, scheduled for later this year, which carry very high levels of consumer anticipation. It is likely these games will be offered not only to PC gaming hardware consumers, but to console owners as well.
Worth Noting: When Matt Ramsey, an analyst from Cannacord Genuity asked Jen-Hsun Huang to speak to the promise of the data center, cloud market for NVIDIA GPUs built on ARM architecture, Huang responded by identifying this market as the most promising emerging market for NVIDIA, going forward, and, further, the market with the best promise of increased ASPs for the business. If they can win here they will achieve an objective AMD has failed to reach.
As we have written earlier to this blog, in our opinion Intel has fortified its position in the Data Center through its support of Hadoop and OpenStack, to the detriment of ARM OEMs.
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